Mere Non-Filing of C Form or Defects in its declaration would not Attract Penalty

Sri Balaji Valves Pvt. Ltd. Vs. The Deputy Commercial Tax Officer (Madras High Court)

The petitioner has filed this writ petition challenging the impugned proceedings levying penalty under Section 9(2A) of the Central Sales Tax Act, 1956. Initially, the Assessing Officer, while completing the assessment under the provisions of the Central Sales Tax Act 2002-2003, proposed to levy penalty under Section 9(2A) of the CST Act read with 12(3)(b) of the TNGST Act. On receipt of the objections filed by the petitioner, the penalty was dropped and the Assessing Officer recorded that there is no concealment in the turnover. After a new Officer took charge, he issued a notice dated 28.05.2007 proposing to revise the assessment. In the notice, there was no proposal to levy penalty. However, while completing the revised assessment, penalty has been imposed in the order dated 28.09.2007. This has been challenged in the writ petition.

2. The respondent has given written instructions to the learned Special Government Pleader (Taxes) vide letter dated 13.07.2009. A reading of the said letter clearly shows that there was no proposal to levy penalty. In fact, the Assessing Officer wants the matter to be remitted back to him for issuing show cause notice to levy penalty. The contention raised by the respondent is to be out rightly rejected. That apart, there is no allegation of any suppression of turnover. It is only with regard to non filing of Form C declaration or certain defects in Form C declaration. Thus, it is not a case where any penalty can be levied more so when there was no proposal in the revision notice dated 28.05.2007.

3. For the above reasons, the Writ Petition is allowed and the impugned proceedings are quashed. No costs. Consequently, connected miscellaneous petition is closed.