TMI Blog2011 (2) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the learned single judge striking down section 72(1) of the Act is hereby set aside.It is declared that section 72(1) of the Act is constitutionally valid. It does not suffer from the vice of arbitrariness, irrationality and is not confiscatory in nature and is not hit by articles 14 and 19(1)(g) of the Constitution of India. The order passed by the learned single judge insofar as quashing of the demand notices and assessment orders stands, but the entire matter is now remitted back. - Writ Appeal No. 3751 of 2009 - - - Dated:- 10-2-2011 - KUMAR N. AND RAVI MALIMATH, JJ. For the Appellant : Smt. S. Sujatha, Additional Government Advocate For the Respondents : A. Sathyanarayana, G. Rabinathan, B.P. Gandhi, Smt. H. Vani, Smt. A. Rama, R.V. Prasad, B. Rabinathan, M.N. Shankare Gowda, T.N. Keshava Murthy, Aful K. Alur, E. I. Sanmalai, K.S. Ramabharan, Ravi Prasad and B.N. Shetty The judgment of the court was delivered by N. KUMAR J. All these appeals are preferred by the State, challenging the order passed by the learned single judge in Writ Petition No. 9689 of 2006 (Philips Electronics India Ltd. v. State of Karnataka [2009] 21 VST 321 (Karn)) and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 and 19 of the Constitution of India. The test under article 14 is not passed as the levy of penalty under sub-section (1) of section 72 of the Act is arbitrary and irrational. The levy depending upon the quantum of tax liability, being huge and a fixed penalty of 10 per cent of the tax liability, also being a huge penalty in the case of smaller dealers and in the case of small tax liability, the extent to delay being large, i.e., to say three to five years, the penalty based on the extent of delay assumes gigantic proportions to make it an irrational levy depending upon the quantum of tax of penalty. An arbitrary penalty, which is also an irrational levy, automatically loses the nexus of achieving the object of correcting the mischief sought to be prevented by the Legislature and therefore renders itself unconstitutional. The provision also becomes disproportionate, as the extent of penalty reaches 100 times or more of the actual tax liability, which is grossly disproportionate to the act of failure in not complying with the requirement of filing a return within such a stipulated time and paying the tax within the stipulated time. The extent of levy of penalty in fact goes much ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 72 of the Act, as it stood during different periods in respect of which the validity is challenged in these writ petitions, were declared unconstitutional and proceeded to pass consequential orders. Aggrieved by the said order of the learned single judge the State is in appeal. The learned Government Advocate Smt. Sujatha, assailing the impugned order of the learned single judge contended as under: Entry 54 of List II of the Seventh Schedule to the Constitution empowers the State Legislature to impose a tax on the sale or purchase of goods other than newspaper. As per the accepted norms of taxation an ancillary or a subsidiary power which is necessary for achieving the object of a taxing statute, is covered by the said entry or entries in the legislative List. It has a very wide meaning and scope and therefore should be given a broad interpretation so as to make the provisions in the Act workable. Therefore it is incorrect to state that the State Legislature has no competence to enact a provision providing for imposition of penalty for non-compliance of the statutory requirements under the Act. While considering the scope of an economic legislation as well as a tax l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after reduction, the penalty levied is exorbitant, irrational, arbitrary and therefore is liable to be struck down. Thirdly he contended that the amendment would demonstrate that probably the Legislature did not apply its mind properly. It shows lack of a clear and cogent policy. They did not even allow sufficient time for the provision to work. All these things inevitably demonstrate that the provision is irrational and on that ground alone the provision is liable to be struck down. Lastly, he contended that the imposition of penalty is in the nature of a penal action. In the section there is no provision for hearing the person before the penalty is levied. Therefore, it violates the principles of natural justice and therefore the said provision cannot be sustained. Further even as it stands, it would act oppressive insofar as credit sales are concerned when the dealer has not even received the value of the goods let alone the tax payable thereto. Sri E.S. Indra Kumar, the learned senior counsel appearing for the petitioners in another batch of matters, contended that in all fiscal legislation wherein penalty is provided for, a provision is also provided for, to find out whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii) Compels issue of tax invoices by dealers indicating the tax charged separately; (iv) Provides for set off of all tax paid at the earlier points in respect of goods sold (that would include tax paid, defined as input tax on capital goods, raw materials, components and other inputs including consumables with some restrictions and packing materials that are used in the resale or manufacture or processing of goods being sold) against tax payable, defined as output tax, at any point, the set off scheme being called as input rebating; (v) Tax paid on inputs purchased within the State is provided to be rebated against goods sold within the State, in the course of interState trade; (vi) Provides limited rebating of tax paid in excess of four per cent to input used in the goods sent out of the State on stock or consignment; (vii) Promotes voluntary compliance by providing for acceptance of returns filed by dealers on self-assessment basis and for scrutiny of books of account only in selected cases; (viii) Enhances compliance by providing for non-discretionary automatic penalty for offences of non-compliance and contravention of the various provisions of law; and (ix) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , with the latter, the tax is collected and remitted to the Government only once, at the point of purchase by the end consumer. With the VAT, collections, remittances to the Government and credits for taxes already paid, occur each time a business in the supply chain purchases products from another business. VAT is nothing but sales tax at source. Instead of collecting it after five months or so the State Governments would collect the same in advance and then allow set-offs to the businessmen. All tax paid on inputs, subject to rules made, shall be allowed to be set-off against the tax on output. There would be exceptions like CST not allowed to be set off if sales are made locally in some other State; octroi not to be set off against output tax, etc. Under the Value Added Tax Act, issue of invoice would be mandatory. No set off/input credit would be allowed unless the original tax invoice is produced, wherein tax is clearly charged separately in the invoice. The basic account books required for the purpose of VAT Act are purchase and sale register. Both the registers would be the basis on which the calculation of payment of tax would be made. The normal practice of entering the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st tax evasion and to put a stop to a practice which the Legislature considers to be against the public interest. It has been further observed that while article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation. The Supreme Court has permitted a very wide latitude in classification for taxation. The object of the Legislature in enacting the impugned provision is not to provide for confiscation but to provide a penalty for concealment of income and that too by providing a deterrent penalty. The apex court in the case of Khazan Chand v. State of Jammu and Kashmir reported in [1984] 56 STC 214 (SC); [1984] 2 SCC 456, dealing with the question as to who is liable to pay sales tax, it held as under (pages 222, 225-227 in 56 STC): 12. It would follow from the above decisions that the power to make a law with respect to a tax comprehends within it the power to levy that tax and to determine the persons who are liable to pay such tax, the rates at which such tax is to be paid and the event which will attract liability in respect of such tax. This is done by the charging sections of the particular tax law. The taxing power of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay to his vendor the amount of sales tax payable by the vendor, he is not bound to pay it to the vendor. Where, however, the purchaser agrees to pay such amount, it forms part of the sale price on which sales tax would be payable to the State. Under the sales tax laws of some States, a dealer is permitted to recover or collect from the purchaser the amount of sales tax payable by him. Even then the dealer can recover or collect such amount only if the purchaser agrees to pay it. In such cases, under those sales tax laws the amount so recovered or collected is not treated, either in whole or in part, as part of the sale price and not taxed, provided the amount not taxed is paid over to the State or tax on the full amount, that is, including the amount of tax so recovered or collected, is required to be paid along with the quarterly or monthly return, as the case may be, and then at the time of assessment refund of the whole or part of the tax on the amount so collected is given to the dealer. . . . 18. Under section 8B of the Act, where a registered dealer realises any amount by way of tax from the purchaser, he is required to deposit it in the Government Treasury or in the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 78(2) imposes strict liability under section 78(5) because as stated above goods in movement cannot be carried without form No. 18A/18C. We are not concerned with nonfiling of statements before the A.O. We are concerned with the goods in movement being carried without supporting declaration forms. The object behind the enactment of section 78(5) which gives no discretion to the competent authority in the matter of quantum of penalty fixed at 30 per cent of the estimated value is to provide to the State a remedy for the loss of revenue. The object behind enactment of section 78(5) is to emphasise loss of revenue and to provide a remedy for such loss. It is not the object of the said section to punish the offender for having committed an economic offence and to deter him from committing such offences. The penalty imposed under the said section 78(5) is a civil liability. Wilful consignment is not an essential ingredient for attracting the civil liability as in the case of prosecution. Section 78(2) is a mandatory provision. If the declaration form 18A/ 18C does not support the goods in movement because it is left blank then in that event section 78(5) provides for imposition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cope and should have a broad interpretation so as to make the provisions of the Act workable and in the interest of the Revenue. The legislative Lists were not powers but are fields of legislation and that the widest possible import and significance should be attached to them. As per the accepted norms of taxation, the jurisdiction whether ancillary or subsidiary, the provision necessary for achieving the object of a taxing statute is covered by entry 54 of List II of the Seventh Schedule to the Constitution of India. Everything which is incidental to the main purpose is contained within the power itself so that it extends to matters which are necessary for the reasonable fulfilment of the legislative power over the subject-matter. Therefore, the power to impose penalty is for the purpose of vindicating the main power which is conferred by the Act. The Legislature enjoys a greater latitude for classification in the field of taxation. The courts, in view of the inherent complexity of fiscal adjustment of diverse elements, permit a larger discretion to the Legislature in the matter of classification, so long as it adheres to the fundamental principles underlying the said doctrine. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lature under the aforesaid entry has the legislative competence to enact a provision for penalty. Point No. 2 Is it arbitrary or confiscatory The main ground of attack is that the penalty specified in the section is arbitrary and confiscatory in nature and thus violates articles 14 and 19(1)(g) of the Constitution of India. In this context they relied on a judgment of the apex court in the case of Khandige Sham Bhat v. Agricultural Income-tax Officer reported in [1963] 48 ITR 21 (SC), wherein it was held as under (pages 30-32 in 48 ITR): . . . It is true taxation law cannot claim immunity from the equality clause of the Constitution. The taxation statute shall not also be arbitrary and oppressive, but at the same time the court cannot, for obvious reasons, meticulously scrutinise the impact of its burden on different persons or interests. Where there is more than one method of assessing tax and the Legislature selects one out of them, the court will not be justified to strike down the law on the ground that the Legislature should have adopted another method which, in the opinion of the court, is more reasonable, unless it is convinced that the method adopted is capricious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e system of checks and balances has to be utilised in a balanced manner with the primary objective of accelerating economic growth rather than suspending its growth by doubting its constitutional efficacy at the threshold itself. In the case of R.K. Garg v. Union of India reported in [1982] 133 ITR 239 (SC); [1981] 4 SCC 675, the Supreme Court held as under: Every legislation, particularly in economic matters, is essentially empiric and it is based on experimentation. There may be possibilities of abuse but on that account alone it cannot be struck down as invalid. These can be set right by the Legislature by passing amendments. The court must, therefore, adjudge the constitutionality of such legislation by the generality of its provisions. Laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion, etc. Moreover, there is a presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. The Legislature understands and correctly appreciates the needs of its own people, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affected but it cannot have the potential of taking over the public interest having an impact in the socio-economic drive of the country. The two aspects are intertwined which are difficult to be separated. There have been many instances where existing rights of the individuals have been affected by legislative measures taken in public interest. . . At para 67, it held as under (page 412 in 120 Comp Cas): 67. . . . Therefore it is clear that it has always been held to be lawful, whenever it was necessary in the public interest to legislate irrespective of the fact that it may affect some individuals enjoying certain rights. In the present case we find that the unrealised dues of banking companies and financial institutions utilising public money, for advances were mounting and it was considered imperative in view of the recommendations of experts committees to have such law which may provide speedier remedy before any major fiscal set-back occurs and for improvement of general financial flow of money necessary for the economy of the country that the impugned Act was enacted. Undoubtedly such a legislation would be in the public interest and the individual interest shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an individual may, to some extent, be affected but it cannot have the potential of taking over the public interest having an impact on the socio-economic drive of the country. The two aspects are intertwined which are difficult to separate. There have been many instances where existing rights of the individuals have been affected by legislative measures taken in public interest. Even if a few dealers are affected here and there, that would not impinge upon the validity of the Act which otherwise serves the larger interest. Dealing with the object with which the provision of penalty is provided in a fiscal legislation, the Supreme Court in the case of State of U.P. v. Sukhpal Singh Bal reported in [2005] 7 SCC 615, held as under: 'Penalty' is a slippery word and it has to be understood in the context in which it is used in a given statute. A penalty may be the subject-matter of a breach of statutory duty or it may be the subjectmatter of a complaint. In ordinary parlance, the proceedings may cover penalties for avoidance of civil liabilities which do not constitute offences against the State. This distinction is responsible for any enactment intended to protect pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Industries v. Commercial Taxes Officer reported in [2007] 9 VST 1 (SC); [2007] 293 ITR 584 (SC), dealing with the question whether contravention of the mandatory provisions for proof of mens rea, penalty could be imposed, held as under (pages 30 and 31 in 9 VST): There is dichotomy between contravention of section 78(2) of the said Act which invites strict civil liability on the assessee and the evasion of tax. When a statement of import/export is not filed before the A.O. it results in evasion of tax, however, when the goods in movement are carried without the declaration form No. 18A/18C then strict liability comes in, in the form of section 78(5) of the said Act. Breach of section 78(2) imposes strict liability under section 78(5) because as stated above goods in movement cannot be carried without form No. 18A/18C. We are not concerned with non-filing of statements before the A. O. We are concerned with the goods in movement being carried without supporting declaration forms. The object behind the enactment of section 78(5) which gives no discretion to the competent authority in the matter of quantum of penalty fixed at 30 per cent of the estimated value is to provide to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the buyer of the goods. He knows the descriptions of the goods which he is supposed to buy. There is no reason for leaving that column blank. Therefore, there are no special circumstances in any case for waiver of penalty for contravention of section 78(2). The assessees were fully aware that the goods in movement had to be supported by form ST 18A/18C. Therefore, they made the goods travelled with the forms. However, the said forms are left blank in all material respects. Therefore, A.O, was right in drawing inference of mens rea against the assessees. . . From the aforesaid judgments it is clear that penalty is a slippery word which has to be understood in the context in which it is used. Under a given situation, a penalty may be the subject-matter of a statutory duty or a deemed subject-matter of a complaint. In ordinary parlance, the proceedings may cover penalties for avoidance of civil liabilities which do not constitute offences against the State. This distinction is necessary for any enactment intended to protect public revenue. It is enacted as a deterrent for tax evasion. If the statutory dues of the State are paid there is no question of imposition of heavy penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act which finds a place in Chapter V dealing with the collection of tax mandates that every registered dealer shall furnish a return in such form and manner including electronic methods and shall pay the tax due on such return within twenty days or fifteen days after the end of the preceding month or any other tax period as may be prescribed. Sub-section (2) of section 35 of the Act provides that the tax on any sale or products of goods declared on any return furnished shall become payable on the expiry of the period specified in sub-section (1) without requiring issue of a notice for payment of such tax. The other requirement is the issue of a notice for payment of such tax. Section 38 deals with the assessment of tax which provides that every dealer shall be deemed to have been assessed to tax based on the return filed by him under section 35. Sub-section (2) of section 38 provides that where a registered dealer fails to furnish his monthly or final return on or before the date provided in this Act or the Rules made thereunder, the prescribed authority shall issue an assessment to the registered dealer to the best of its judgment and the tax assessed shall be paid within ten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 penalties for offences against the officers. Section 79 is the general provision prescribing penalty for fraudulent evasion of tax. Therefore the Legislature comprehensively provided for imposition of penalties for proper implementation of the Act. In fact, in section 72 itself, penalties imposed for non-furnishing of return and non-payment of tax under different circumstances are apart from what is provided under sub-section (1) of section 72. However, the challenge to the Constitutional validity is confined only to section 72(1) and the rest of the provisions dealing with penalties are not under challenge. It is in this context we have to find out as to whether the penalties prescribed under section 72(1) is so arbitrary, oppressive and confiscatory in nature, so as to strike down the said provision as being violative of articles 14 and 19(1)(g) of the Constitution. Section 72(1) reads as under: 72. Penalties relating to returns and assessment. (1) A dealer who fails to furnish a return or who fails to pay the tax due on any return furnished as required under the Act shall be liable to pay together with any tax or interest due, (a) a penalty of fifty rupees for each day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson who is paying the tax on 11th day and a person who is paying the tax on 365th day would not be paying the very same tax. Though the basic penalty payable in respect of both of them is one and the same, but the person who is paying tax on 11th day would pay 10 per cent of the tax due plus ₹ 50, whereas the person who will be paying the penalty on the 365th day would be paying 10 per cent of the tax due and ₹ 50 per day and that such penalty under no circumstances can exceed the total tax payable. Therefore, we do not find any merit in the second contention also. Thirdly, it was argued that when once clause (a) imposes penalty at a particular rate, a further penalty cannot be imposed under clause (b) and if imposed, will be a case of double penalty. Therefore it was contended that on the face of it, it is arbitrary. It is not a case of double penalty. Insofar as clause (a) is concerned, the penalty is calculated on daily basis. It depends on the number of days delayed. That amount is payable in addition to the basic penalty as prescribed under clause (b). The Legislature in its wisdom has used a particular language to express itself. Merely because after prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial. The Act imposes a liability to pay sales tax on dealers. This liability is irrespective of the fact whether he has made a profit or a loss in his business or whether he has received the sale price or not. When the liability to pay sales tax is cast on the dealer by statute, he may pass on the burden to his customer, the amount of tax payable by him. Where a registered dealer realises any amount by way of tax from the purchaser, he is required to deposit the same with the Government. Where a dealer so deposits the tax, he would get credit for it against the amount of tax payable by him. From this it does not follow that when he has not been able to recover the amount of tax or the sale price from his customers, he is not bound to comply with the statutory requirements, under which he has to pay tax according to the monthly returns furnished by him before the date prescribed for filing such return. In fact in the instant case, the Legislature reduced the penalty the very next year after the passing of the amendment. Not being satisfied with the same in the succeeding year, again they have reduced the quantum of penalty payable under the very same section. Therefore, after seei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is enactment was passed and this provision was given effect to, by a stroke of a pen, the attitude of the people cannot be changed overnight. It takes sometime for these registered dealers to adapt themselves to the changed circumstances. Whatever may be the advantages of this VAT, if these dealers are used to a particular way of doing things for decades, certainly they need sufficient time to bring in their activities strictly in conformity with the provisions of VAT and it is in this process if there are some omissions, defaults, non-compliance of the statutory provisions, as the object of the provision is not to strictly impose any penalty on these dealers but in reality to bring them into the main stream to see that these statutory provisions are complied with, so that in the long run the State and the dealers could be benefited. In deciding the case of penalty in the formative years of VAT, the authority shall keep these aspects in mind and as a one time measure would be well-within their jurisdiction to show such concessions as is permissible in the facts of that particular case, in the matter of imposition of penalty. That would meet the ends of justice. The material furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... violative of the principles of natural justice and is hit by article 14 of the Constitution. In the absence of hearing the person affected, if an order is passed imposing a penalty it would cause great injustice. In fact in section 72 itself, except sub-section (1), in respect of all other sub-sections the statute provides for giving an opportunity of showing cause in writing against the imposition of a penalty. Similar provisions are incorporated in respect of other penalty provisions and, therefore, it was contended that this subsection (1) of section 72 is clearly violative of the principles of natural justice and liable to be struck down. It is true that a reading of sub-section (1) of section 72 makes it clear that there is no provision for giving the assessee an opportunity of being heard before passing an order imposing the penalty as prescribed under section 72(1). The Supreme Court dealing with such a situation in the case of Union of India v. Col. J.N. Sinha [1970] 2 SCC 458 has held as under: 8. . . . Rules of natural justice are not embodied rules nor can they be elevated to the position of fundamental rights. As observed by this court in A.K. Kraipak v. Union of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verse factors like time, place, the apprehended danger and so on. The ordinary rule which regulates all procedure is that persons who are likely to be affected by the proposed action must be afforded an opportunity of being heard as to why that action should not be taken. The hearing may be given individually or collectively, depending upon the facts of each situation. A departure from this fundamental rule of natural justice may be presumed to have been intended by the Legislature only in circumstances which warrant it. Such circumstances must be shown to exist, when so required, the burden being upon those who affirm their existence. Yet another Constitution Bench of the apex court in the case of C.B. Gautam v. Union of India [1993] 199 ITR 530 (SC); [1993] 1 SCC 78 has held as under (pages 553 and 554 in 199 ITR): 28. It must, however, be borne in mind that courts have generally read into the provisions of the relevant sections a requirement of giving a reasonable opportunity of being heard before an order is made which would have adverse civil consequences for the parties affected. This would be particularly so in a case were the validity of the section would be open to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ground of non-compliance with the principles of natural justice. . . In the instant case as the provision stands, penalty could be imposed for non-furnishing of returns or failing to pay the tax due on any returns furnished. It is penal in nature. Such an order imposing penalty will have serious civil consequences. Though in the other sub-sections of section 72, an express provision is made for the issue of a show-cause notice and hearing the assessee before imposing the penalty, such a provision is conspicuously missing in section 72(1). That by itself would not lead to the conclusion that the Legislature has by implication excluded the principles of natural justice. No express words are used in the said provision excluding the application of principles of natural justice. When the aforesaid statutory provision either specifically or by necessary implication does not exclude the application of any or all the principles of natural justice, then the court cannot ignore the mandate of the Legislature or the statutory authority and exclude the application of principles of natural justice. A departure from this fundamental rule of natural justice may be presumed to have been int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condition prescribed for imposing penalty is satisfied, it would not render the said provision unconstitutional. But, at the same time if the rule of audi alteram partem has to be meaningful and in a genuine case where the non-compliance of the statutory requirement is beyond the control of the assessee and is not intentional, the authority who is vested with the power to impose penalty should have the power and the discretion not to impose penalty. In fact the reason why such a discretion is not left with the authority is, that the experience shows, that such a power and discretion is not properly exercised and in many cases abused, rendering the provision imposing the penalty otiose. When the object of introducing this provision for penalty in the Act is to enforce strict compliance of the statutory provisions, the Legislature in its wisdom has not conferred any discretion on the authority concerned. That would not by itself denude the power of the authority to reduce or waive penalty in a genuine deserving case. In our considered view, the circumstances under which such a benefit can be given to the assessee should be as under: (1) Death of the proprietor/proprietrix. (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 72(1) of the Act is constitutionally valid. It does not suffer from the vice of arbitrariness, irrationality and is not confiscatory in nature and is not hit by articles 14 and 19(1)(g) of the Constitution of India. (d) The order passed by the learned single judge insofar as quashing of the demand notices and assessment orders stands, but the entire matter is now remitted back to the assessing officer with a direction, (i) to issue a show-cause notice calling upon the petitioners to show cause as to why the penalty contemplated should not be imposed. (ii) after the appearance of the petitioners to give them a personal hearing. (iii) after considering the cause shown, to find out whether their case falls under any of those circumstances set out in para 58 above and if it falls under any of those circumstances to drop the penalty proceedings. (iv) if it does not fall under these categories, let him keep in mind the observations made by this court as a one time measure and also give the benefit of the amended section retrospective effect from April 1, 2005 and pass appropriate orders in accordance with law. Parties to bear their own costs. - - TaxTMI - TMIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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