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2017 (12) TMI 635

Penalty - whether in the facts and circumstances of the case, the revisional authority was justified in levying penalty under section 34(7) of the GVAT Act? - Held that: - The revisional authority in the order passed under section 75 of the GVAT Act has imposed penalty under section 34(7) of the said Act. Sub-section (7) of section 34 of the GVAT Act provides for imposing penalty after affording the dealer an opportunity of being heard - Evidently, therefore, the statute contemplates issuance of notice indicating the default and the penalty proposed to be levied prior to passing any order under sub-section (7) of section 34 of the Act. - In the facts of the present case, it is an admitted position that no notice in Form 309 as prescribe .....

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nal authority ), in exercise of powers under section 75 of the GVAT Act, took the assessment order in revision. The revisional authority noticed that during the year under consideration the respondent had entered into purchase transactions with one M/s. Om Incorporation whose registration number was cancelled with effect from 1.1.2007 by an order dated 1.7.2010 for nonsubmission of returns. The revisional authority further noticed that the respondent had purchased goods worth ₹ 43,71,952/- from the said M/s. Om Incorporation and was of the view that the input tax credit claimed on such purchases was required to be disallowed. After hearing the respondent dealer, the revisional authority passed an order dated 12.5.2014 whereby, it disa .....

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2) of the GVAT Act. The Tribunal has accepted the submissions advanced on behalf of the respondent dealer while deleting the penalty. 7. Sub-section (7) of section 34 of the GVAT Act reads as under: (7) If the Commissioner is satisfied that the dealer, in order to evade or avoid payment of tax:- (a) has failed to furnish, without reasonable cause, returns in respect of any period or the self-assessment by the prescribed date; (b) has furnished incomplete or incorrect returns for any period; (c) has availed tax credit for which he is not eligible; (d) has employed such method of accounting which does not enable the Commissioner to assess the tax due from him, or (e) has knowingly furnished false or incorrect self assessment,- he shall, after .....

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ing the default and the penalty proposed to be levied prior to passing any order under sub-section (7) of section 34 of the Act. 10. In the facts of the present case, it is an admitted position that no notice in Form 309 as prescribed under sub-rule (1) of rule 46 of the rules has been issued to the respondent dealer. Consequently, it cannot be said that the respondent was afforded any opportunity of being heard as contemplated under sub-section (7) of section 34 of the GVAT Act. Under the circumstances, the entire exercise of levy of penalty was in breach of the provisions of sub-section (7) of section 34 of the GVAT Act and unsustainable in law. The Tribunal, therefore, did not commit any error in deleting such penalty. 11. For the forego .....

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