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TMI Blog2023 (4) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... d before assessment. (ii) For the issuance of an appropriate writ/order/direction including a writ in the nature of certiorari, quashing and setting aside the order dated 24.07.2019 (Annexure-4) passed by the Learned Commissioner of Commercial Taxes in Revision Case No. CC(S) 460 of 2016 by which the revision petition has been dismissed in a summary manner. (iii) For the issuance of an appropriate writ/order/direction including a writ in the nature of certiorari, quashing and setting aside the order dated 29.04.2016 (Annexure-3) passed by the Joint Commissioner of Commercial Taxes (Appeals), Jamshedpur Division, in JU-VAT-A-37/2015-16 by which the appeal filed by the petitioner has been dismissed on a misinterpretation of section 40 (2) of the JVAT Act. (iv) For the issuance of an appropriate writ/order/direction including a writ in the nature of certiorari, quashing and setting aside the order dated 28.08.2015 (Annexure-2) passed by the Assistant Commissioner of Commercial Taxes, Urban Circle, Jamshedpur, and the consequential demand notice (Annexure-2/1), wherein penalty of Rs.1,97,930/- under section 40(2) of the JVAT Act has been levied on the petitioner. 3. Brief facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he month of March 2015 was accepted. (ii) A specific finding has been given that no tax evasion has been committed by the Petitioner. On 24.7.2019, order was passed by the Ld. Commissioner of Commercial Taxes, dismissing the revision filed by the Petitioner. Petitioner approached the Ld. Commercial Taxes Tribunal in revision. The revision petition was numbered as JR 47 of 2020. Written notes were filed before the Ld. Tribunal wherein the factum of passing of the regular assessment order was brought before the Tribunal. On 7.6.2022, order was passed by the Ld. Tribunal dismissing the revision filed by the Petitioner. 4. Mr. Salona Mittal, learned counsel for the petitioner in crux had made following submission: - (a) Violation of Rule 14(7), if any, does not lead to any concealment With regards to the above contention, learned counsel submits that mere violation of Rule 14(7) does not lead to an inference of suppression / concealment as required under Section 40(2) of the JVAT Act. In order to bring the Petitioner within the purview of Section 40(2), the Department ought to have established the mens rea of the Petitioner to defraud the revenue by concealing / suppress ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce this arose subsequent to the passing of the penalty order). The Ld. Tribunal, being the last fact-finding authority ought to have appreciated the fact that the very basis for levying the penalty order has since subsequently ceased to exist. However, the Ld. Tribunal refused to go into the regular assessment order. (d) Section 40(2) is only provisional in nature and needs a concluded assessment order to rectify it. Learned counsel lastly submits that Section 40 of the JVAT Act deals with matters of 'Turnover escaping assessment'. This includes both Section 40(1) and 40(2). While Section 40(1) deals with matters after assessment proceedings are concluded, Section 40(2) deals with cases before assessment. However, since Section 40(2) of the Act also comes under the heading of 'turnover escaping assessment', it is necessary that a penalty order must depend upon a final order of assessment. Thus, the computation of penalty under Section 40(2) of the Act is only on a notional basis. Unless and until, the regular assessment proceeding concludes, and it is held that the turnover has escaped assessment, it cannot be said that the case of the Petitioner would come under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SUGAM-G and, thus, no occasion arose for suppression of any turnover with intent to evade payment of tax. In the entire Counter Affidavit no mens-rea has been alleged by Respondent-authorities. Thus, it appears that the contention of the petitioner that at best penalty under Section 30(4)(d) of the JVAT Act could have been imposed upon petitioner is correct. This specific plea of Petitioner is uncontroverted by Respondent-authorities. For brevity both Section 40(2) and section 30(4) of the JVAT Act is extracted herein below for proper appreciation of the lis:- '40. Turnover escaping Assessment - ............. (2) If the prescribed authority in the course of any proceeding or upon any information, which has come into his possession before assessment or otherwise, under this Act, and is satisfied that any registered dealer or a dealer to whom the registration certificate has been suspended under sub-section (7) of Section 25 - (a) has concealed any sales or purchases or any particulars thereof, with a view to reduce the amount of tax payable by him under this Act, or (b) has furnished incorrect statement of his turnover or incorrect particulars of his sales or purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the alleged revised return has duly been accepted by the Respondent-authorities in the original assessment proceeding of the Petitioner. Thus, on one hand, by accepting return and turnover of Petitioner, the Respondents have determined tax liability in the original assessment proceeding and on the other hand Respondents have disputed the revised quarterly return and levied penalty under Section 40(2) of the JVAT Act. Further, revision of return can be allowed even after expiry of time period prescribed and time period prescribed for revision of returns is directory and not mandatory. In this regard, reference may be made to the section 30 (4) (d) of the JVAT Act itself where the legislature has specifically mentioned that if a registered dealer or any other dealer required to furnish return under sub-section (1) and sub-section (2) of Section 29; without any sufficient cause; the prescribed authority shall, after giving such a dealer an opportunity of being heard in the manner prescribed, impose a penalty of the rate not exceeding rupees fifty for every day of such default for any month or any tax period, subject to a maximum of rupees twenty five-thousand in a year. 12. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a penal provision has to be strictly construed on its own language. 30. To put it succinctly, in examining whether mens rea is an essential element of an offence created under a taxing statute, regard must be had to the following factors: (i) the object and scheme of the statute; (ii) the language of the section; and (iii) the nature of penalty. 13 Having regards to the discussion made hereinabove, this court holds that the penalty imposed by the revenue u/s 40(2) of the JVAT Act is not sustainable in the facts and circumstances of this case rather; penalty under Section 30(4)(d) of the JVAT Act could have been imposed upon Petitioner." Relying upon the aforesaid submission learned counsel prays for setting aside the order impugned. 6. Per-contra Mrs. Darshana Poddar Mishra, learned AAG-I opposed the contention of the petitioner and submits that the instant case is not of filing of revised returns but it is a case of concealment which would transpire from the facts of the case. She further submits that it is a settled principle that the petitioner cannot revise its return under the provisions of Section 29(3) of JVAT Act 2005 after the expiry of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to 30.07.2015. If the same would have been revised on any day prior to 30.07.2015; then the proceeding under Section 40(2) of the Act would not have been initiated; rather the conduct of petitioner in not revising the returns despite admittedly having received the TDS certificate from the government on 01.07.2015, appears to be indicative of the mens- rea of the petitioner The proceeding u/s 40(2) was initiated on 30.07.2015 and notice was issued to the petitioner. Thereafter, the returns were revised only after initiation of the proceeding and issuance of notice to the petitioner and therefore, any attempt to revise the returns after the initiation of proceeding will be hit by the mischief of rule 14(7) of JVAT Rules, 2006. By going through the impugned judgment, it appears that the learned Tribunal which is the final fact-finding authority had dealt this issue in detail. The relevant part of the order dated 7.6.2022 (Annexure-8) is quoted hereinbelow for ready reference: - ' 5........... Claim of the Department was that on the basis of some information received from the department it transpired that the petitioner had suppressed certain turnovers amounting to Rs.6,73,233/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw. Section 40(2) of the Act that is meant for the turnover escaping assessment, before assessment. Therefore, for quantification of the penalty, the tax has to be assessed provisionally. The word 'provisionally' used in the said section has to be read for calculation of tax to quantify the amount of penalty and is NOT subject to final assessment. 9. We further observe that if the intent of the legislature been to assess the tax provisionally under the said section which would be 'subject to the final assessment', the said intent would have been reflected through the said section. However, on plain reading of the said section, no such intent can be inferred and the said section is clear and unambiguous. It further transpires that the penalty proceedings under section 40(2) is an independent proceeding which is carried out before assessment of the assessee and has no bearing with the regular assessment u/s 35 etc. Further, Section 40(2) states that if the prescribed authority in the course of any proceeding or upon any information, which has come into his possession before assessment is satisfied that any registered dealer has concealed any sales or purchases or any particulars th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .04.2015 in-spite of the fact that the petitioner had raised bill for the amount of Rs.6,73,233 on 30.3.2015 itself. Further though TDS certificate was received by the petitioner on 1.7.2015 but Returns were not revised till 30.7.2015 when proceedings u/s 40(2) was initiated. Thus, the intent to evade tax or conceal/suppress turnover appears to be clear indicative of mens rea on his part. As a matter of fact, after the proceeding under section 40(2) of the JVAT Act was initiated and the notice was served to the petitioner he filed the return on 05.08.2015 i.e., after the period of three months for filing revised return. There is no document on record to suggest or any averments giving reason for non-filing of revised return within time. As such, the element of mens rea on the part of the petitioner is also made out. All these facts of the instant case make it distinguishable from the case of Shiv Jyoti (supra) and other relied upon judgments by the petitioner. 12. We are also inclined to agree with contention of the learned AAG-I relying on Rule 14(7) of the JVAT Rules which says that revised return can be filed by the assesse if he finds that there is any omission or in co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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