TMI Blog2021 (3) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... of manufacture of finished product viz. aluminum, aluminum ingots and sheets etc. taxable under the OVAT Act are input as defined under Section 2(25) of the OVAT Act and the tax which has been paid on such purchases can be claimed as input tax credit under Section 2(27) of the OVAT Act against the tax payable on sale of finished products i.e. aluminum, aluminum ingots and sheets etc. - demand raised in the assessment orders disallowing the input tax credit in respect of tax paid on coal, alum, soda, and other consumables used for generation of electrical energy is quashed. Whether imposition of penalty under Section 43(2) of the Orissa Value Added Tax Act, 2004 (OVAT Act) can only be levied if the escapement is without any reasonable c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commercial Tax Department. 2. Since the issue involved in all the aforementioned review petitions is similar, they are taken up together and disposed of by this common order. 3. These petitions have been filed by the original Petitioner i.e. National Aluminum Company Limited (NALCO) seeking review of a judgment dated 9th October 2012, passed by this Court in W.P.(C) Nos.1597 and 1686 of 2012 to a limited extent as will be explained hereafter. 4. Two questions, which arose for consideration in the aforementioned writ petitions before this Court and have been formulated in paragraph 15 of the judgment, read thus: (i) Whether coal, alum, caustic soda, and other consumables used for generation of electricity is to be treated as an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position of penalty under Section 43(2) of the Orissa Value Added Tax Act, 2004 (OVAT Act) can only be levied if the escapement is without any reasonable cause , an observation was made in paragraph 36 of the judgment that penalty is not independent of the tax assessed. If the tax is assessed, imposition of penalty under Section 42(5) is warranted . 7. On this aspect, in the further discussion in the judgment, in paragraph-38, it is stated that in appeal, if the amount of tax assessment under Section 43 of the OVAT Act is reduced, the quantum of penalty will also be reduced automatically. 8. Again in paragraph 39 of the judgment, it is observed as under: .once the Assessing Officer comes to the conclusion that the dealer is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far as question No.1 is concerned, the Department is in appeal before the Supreme Court. He does not dispute the fact that Section 43(2) of the OVAT Act is worded differently from Section 42(5) of the OVAT Act and further that in the context of the present case what was relevant was Section 43(2) of the OVAT Act. 11. The Court notes that under Section 42 (5) of the OVAT Act the penalty levied is equal to twice the amount of tax assessed under Section 42(3) or 42(4) pursuant to an audit assessment. There is no discretion with the Assessment Officer (AO) to reduce this amount of penalty. On the other hand, Section 43(2) of the OVAT Act is under the heading Turnover escaping assessment , and is differently worded. It reads thus: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the matter, the judgment dated 9th October 2012, passed by this Court in W.P.(C) Nos.1597 and 1686 of 2012 is reviewed to the extent of recalling the observation, that the imposition of penalty would be automatic under Section 42 (5) of the OVAT Act, when in fact the provision that is relevant to the context, is Section 43 (2) of the OVAT Act. The Court clarifies that even this question would relevant only if the Department succeeds in the appeal in the Supreme Court, and it is held that the NALCO is liable to pay tax. As a corollary, if the judgment of this Court on question No.1 is affirmed, the question of any penalty being levied on NALCO would not arise. 15. The review petitions are allowed to the above extent. 16. An urgent ce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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