Shiv Jyoti Enterprises Vs State of Jharkhand (Jharkhand High Court)
Jharkhand High Court held that as there is no act to deliberately file incorrect returns, hence penalty under section 40(2) of the Jharkhand Value Added Tax Act, 2005.
Facts- The petitioner is engaged in the business of works contract on behalf of various entities including Government Entities. For the period in dispute, Petitioner purchased pipes from outside the State of Jharkhand for an amount of Rs.1 ,55,69,332/- towards execution of works contract. The said interstate purchases were made through valid road permits duly generated from the official website of State of Jharkhand. Petitioner filed its original quarterly return and, inadvertently, reflected interstate purchases as ‘Nil’.
On 09.01.2016 “Before assessment” proceeding u/s. 40(2) of the JVAT Act was initiated against the Petitioner by Respondents on the sole ground that for the period in dispute, it filed quarterly returns by reflecting therein inter-state purchases as ‘Nil’, but, as per data available in the Department’s software, it was evident that petitioner utilized SUGAM-G for an amount of Rs.1 ,55,69,332/- for inter-state movement of goods. Accordingly, Petitioner was directed to file its reply by 01.02.2016.
On 01 .02.2016, the petitioner filed its reply by stating, interalia, that inadvertently, the amount of inter-state purchases made during the period in dispute could not be reflected in its original quarterly return. Accordingly, to rectify the mistake, it prayed for one month’s time to file the revised quarterly return and on 21.02.2016, petitioner revised its quarterly return and disclosed the inter-state purchases of Rs.1,55,69,332/- which could not be reflected in original quarterly return.
Interestingly, on the very next date i.e., on 02.02.2016, the Respondent No. 4 passed an order u/s. 40(2) of the JVAT Act and imposed penalty of Rs.25,68,940/-.
Appellate court dismissed the appeal of the petitioner.
It is pertinent to mention that during the pendency of the remand appellate proceeding, original assessment order under Section 35(6) of the JVAT Act was passed against the petitioner.
The petitioner challenged the said assessment order before the Commissioner of Commercial Taxes in the Revision Case and was remanded to the assessing officer. Under the remand order passed by the Commissioner Court, a revised assessment order was passed and a revised GTO of Rs.6,17,61,159/- was duly accepted by the assessing officer. Tax liability of Rs.24,70,658/- was determined against the petitioner.
On 20.12.2019, during the course of revisional proceeding, an amount of Rs.17,35,000/- has also been realized by the Revenue and balance amount of Rs.8,33,940/- has been put on hold by initiating recovering proceeding under Section 46(1) of the JVAT Act by the Respondent-authorities.
Conclusion- In the given facts and circumstances and in view of specific provision enshrined u/s 30(4) (d) of the Act, it is apparent that there is no deliberate act of evasion of tax which would be warranting imposition of penalty on the petitioner given the language used in Section 40(2) containing the penal provision. In fact it cannot be said to be an act of deliberately filing incorrect returns as the revised return has been duly accepted by the Assessing Officer.
We 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.
FULL TEXT OF THE JUDGMENT/ORDER OF JHARKHAND HIGH COURT
The instant writ application has been preferred for the following relief:-
(i) For quashing and setting aside the order dated 31st January, 2022 passed by Commercial Taxes Tribunal, Jharkhand in Review Case No. DN 7 of 2022 pertaining to the period 2015-16 (Annexure-13) whereby the review petition filed by the petitioner against the judgment and order dated 22nd November, 2021 passed in Revision Case No. DN 48 of 2021 has been dismissed.
(ii) For quashing and setting aside the judgment and order dated 22nd November, 2021 passed in Revision Case No. DN 48 of 2021 (Annexure-11) wherein imposition of penalty under Section 40(2) of the Jharkhand Value Added Tax Act, 2005 (for short JVAT Act, 2005) by the Assessing Officer has been upheld.
(iii) For issuance of an appropriate writ, order or direction to the respondent-authorities to refund an amount of Rs. 17,35,000/- which has been realized by initiating recovery proceeding under Section 46(1) of the JVAT Act from the banker of the Petitioner-company.
2. Brief fact of the case is that the petitioner is engaged in the business of works contract on behalf of various entities including Government Entities. For the period in dispute, Petitioner purchased pipes from outside the State of Jharkhand for an amount of Rs.1 ,55,69,332/- towards execution of works contract. The said interstate purchases were made through valid road permits duly generated from the official website of State of Jharkhand. Petitioner filed its original quarterly return and, inadvertently, reflected interstate purchases as ‘Nil’.
On 09.01.2016 “Before assessment” proceeding under Section 40(2) of the JVAT Act was initiated against the Petitioner by Respondents on the sole ground that for the period in dispute, it filed quarterly returns by reflecting therein inter-state purchases as ‘Nil’, but, as per data available in the Department’s software, it was evident that petitioner utilized SUGAM-G for an amount of Rs.1 ,55,69,332/- for inter-state movement of goods. Accordingly, Petitioner was directed to file its reply by 01.02.2016.
On 01 .02.2016, the petitioner filed its reply by stating, interalia, that inadvertently, the amount of inter-state purchases made during the period in dispute could not be reflected in its original quarterly return. Accordingly, to rectify the mistake, it prayed for one month’s time to file the revised quarterly return and on 21.02.2016, petitioner revised its quarterly return and disclosed the inter-state purchases of Rs.1,55,69,332/- which could not be reflected in original quarterly return.
3. Interestingly, on the very next date i.e., on 02.02.2016, the Respondent No. 4 passed an order under Section 40(2) of the JVAT Act and imposed penalty of Rs.25,68,940/- The calculation of penalty by the assessing officer is as under.
