Case Law Details
Mahindra & Mahindra Ltd. Vs Joint Commissioner (Madras High Court)
Conclusion: Proposal to levy penalty on the ground that assessee- dealer purchased SAP software at concessional rate of tax against C Form Declarations without having included the same in the registration certificate issued under the CST Act was made by an officer, who was not the officer, who passed the order dated 30.1.2014, as there had been a transfer of the officer and the new officer took over charge thus, the defect, which had occurred by levying penalty without affording an opportunity of personal hearing would go to the root of the very levy itself, therefore, the assessment orders was remanded to AO for a fresh consideration.
Held: AO had issued the notices proposing to levy penalty on the ground that assessee- dealer purchased SAP software at concessional rate of tax against C Form Declarations without having included the same in the registration certificate issued under the CST Act. Hence, AO was of the prima facie view that the software was not capable of being used in manufacturing and therefore, had proposed to levy penalty under Section 10A(1) of the CST Act. It was noted that AO did not afford any opportunity of personal hearing to assessee though more than one year had lapsed. This, was a serious issue because the dealer had taken a specific stand that the software was being used in the manufacture. Furthermore, the dealer’s case was that in their registration certificate issued under the CST Act, as mentioned in Clause 9 in the annexure, computer software was also one of the items mentioned in their certificate of registration. Had an opportunity of hearing been granted to the dealer, especially when AO took more than one year to complete the assessment, the dealer would have explained the same. That apart, the proposal to levy penalty was made by an officer, who was not the officer, who passed the order dated 30.1.2014, as there had been a transfer of the officer and the new officer took over charge. This was also one more aspect, which should have weighed in the mind of AO to afford an opportunity of personal hearing because the officer, who completed the assessment, was not the officer, who made the proposal to levy penalty. Thus, the case of hand having fallen under one of the exceptional circumstances as mentioned warranting exercise of jurisdiction under Article 226 of The Constitution of India and as the defect, which had occurred by levying penalty without affording an opportunity of personal hearing would go to the root of the very levy itself, therefore, the assessment orders was remanded to AO for a fresh consideration.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
We have heard Mr.Joseph Prabhakar, learned counsel for the appellant and Mr.Mohammed Shaffiq, learned Special Government Pleader assisted by Mrs.G.Dhanamadhri, learned Government Advocate accepting notice for the respondents
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