S.SYED ABDUL KADAR, V. THE DEPUTY COMMISSIONER,

WP(MD)/5887/2014

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The case involves S. Syed Abdul Kadar, who filed writ petitions against the Deputy Commissioner and the Additional Commercial Tax Officer, challenging the imposition of additional tax liabilities and penalties following a tax inspection of his business, S.J.H. Traders, in 2009. The petitioner argued that he was not given a reasonable opportunity to contest the additional tax liabilities as required under Section 22(6) of the Tamil Nadu Value Added Tax, 2007, which mandates a 30-day period for objections, whereas only 15 days were provided. The respondents contended that the petitioner did not follow up on his request for additional time, and thus the penalties were justified. The court dismissed the petitions, citing a lack of evidence that the petitioner's requests were considered or that he had made sufficient efforts to contest the imposition of penalties.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 727804 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 29-04-2014
• Assessment Year: misc
• Other Referred Cases: Hindustan Steel Limited Vs. State of Orissa, Joint Commissioner of Income Tax Vs. Saheli Leasing and Industries Limited
• Laws Referred To: Article 226 of the Constitution of India, Tamil Nadu Value Added Tax, 2007
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: RAJA KARTHIKEYAN
• Assessee Lawyers: A VELAN
• Keywords: Penalty; Reasonable opportunity; Writ of Certiorarified Mandamus; Additional tax liability; Pre-assessment
• Section: 22(6); 27(3); 64(4)

Judgement Text

"1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 29.04.2014 CORAM THE HONOURABLE MR.JUSTICE R.SUBBIAH W.P.(MD)Nos.5887 & 5888 of 2014 and M.P.(MD).Nos.1, 1, 2 & 2 of 2014 S.Syed Abdul Kadar ... Petitioner in both the writ petitions Vs. 1.The Deputy Commissioner, Commercial Tax Ramanathapuram, Ramanathapuram District. 2.The Additional Commercial Tax Officer, Ramanathapuram, Ramanathapuram District. ... Respondents in both the writ petitions Writ Petitions filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Certiorarified Mandamus, to call for the records relating to the impugned order passed by the 2nd respondent in Tin 33405442784/2007-2008, dated 31.12.2013 and Tin 33405442784/2008-2009, dated 31.12.2013 respectively and quash the same as illegal and to consequently direct the 2nd respondent to provide an opportunity to the petitioner to submit his objections and consider the same, in accordance with law, within a stipulated period. For Petitioners in both the W.Ps. : Mr.A.Velan for M/s.Ajmal Associates For respondents in both the W.Ps. : Mr.Raja Karthikeyan, Addl. Government Pleader COMMON ORDER These writ petitions have been filed by the petitioner, challenging the impugned orders issued by the second respondent in Tin 33405442784/2007-2008, dated 31.12.2013 and Tin 33405442784/2008-2009, dated 31.12.2013 respectively and for a consequential direction to the second respondent to provide an opportunity to the petitioner to submit his explanation and to consider the same, in accordance with law. https://hcservices.ecourts.gov.in/hcservices/ 2 2.Since the issue involved in both the writ petitions are one and the same, these writ petitions are disposed of by way of this common order. 3.In the affidavit, it has been averred that the petitioner has been engaging in the business of selling cement from the year 2007 to till date, in the name and style of S.J.H. Traders. The petitioner has been paying all the necessary taxes in accordance with law. While so, the first respondent has inspected the premises of the petitioner on 30.12.2009 and also inspected the books of accounts of the SJH Traders under Section 64(4) of the Tamil Nadu Value Added Tax, 2007. Thereafter, there was no communication from the competent authority with regard to the outcome of the abovesaid surprise inspection. After a period of four years, an objection/reply was sought for from the petitioner with regard to the additional tax liability on the basis of the inspection conducted on 30.12.2009, within 15 days. According to the said notices, the additional liability of the petitioner for the financial year 2007-2008 is Rs.18,097/- and for the financial year 2008-2009 is Rs.43,879/-. 4.It is further averred in the writ petition that as the objection / reply sought for by the second respondent was relating to the records more than five years old and as the petitioner’s daughter marriage was scheduled in that period, the petitioner has sent his representation, dated 18.02.2013, seeking further 30 days time to file his reply, over and above the 15 days time, to the second respondent. However, the above said reasonable request was not considered by the second respondent and the same was not decided upon. The second respondent, by the impugned orders, dated 31.12.2013, has not only demanded a sum of Rs.18.097/- and Rs.43,879/- as additional tax liability, but also levied penalty to the tune of Rs.7,409/- and Rs.21,940/- for the financial years 2007-2008 and 2008-2009 respectively. Since the impugned orders were passed without giving reasonable opportunity to the petitioner to submit his explanation/objection to the pre-assessment done by the competent authority, the petitioner has come forward with these writ petitions for the relief stated supra. 5.The main submission of the learned counsel for the petitioner is that Section 22(6) of the Tamil Nadu Value Added Tax, 2007, provides 30 days time to the assessee to place his objection/explanation to a pre-assessment order. But, in the instant cases, as against the statutory requirement of providing 30 days time, only 15 days time was provided to place his objection. Though the petitioner has sought for time by his representation, dated 18.02.2013, without considering the same, the impugned orders have been passed. https://hcservices.ecourts.gov.in/hcservices/ 3 6.Further the learned counsel for the petitioner has, by relying upon a judgment reported in AIR 1970 SC 253 (Hindustan Steel Limited Vs. State of Orissa) submitted that it has been held that an order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Thus, the counsel for the petitioner submitted that imposing a penalty is a serious issue. Under such circumstances, in the instant case, the respondents ought to have offered an opportunity to the petitioner before imposing penalty. 7.For the same legal proposition, the learned counsel for the petitioner has also relied upon a judgment reported in 2010 (6) SCC 384 (Joint Commissioner of Income Tax Vs. Saheli Leasing and Industries Limited) wherein it is held as follows; \"The object of imposing penalty is different than that of determining the assessee's liability to pay tax or additional tax under any charging section. The interpretation applied to penalty provision, thus, cannot be applied while interpreting any charging section for payment of income tax or additional tax. In other words, both the provisions i.e., penalty and charging have different objects and consequences. They operate in different fields qua the assessee\". But, in the instant cases, the second respondent, without affording sufficient opportunity to the petitioner, has imposed penalty and therefore, on that ground also, the impugned orders are liable to be set aside. 8.The learned counsel appearing for the respondents submitted that the pre-revision notices were issued under Section 27(3) to the petitioner on 24.01.2013. The impugned orders were passed only on 31.12.2013, that is after eleven months from the date of pre-revision notices. Though the petitioner claims that he had sent requisition letter, dated 18.02.2013, seeking 30 days time, no such requisition was received by the department. Thus, the learned counsel for the respondents submitted that considering the facts and circumstances of the case, the judgment relied upon by the learned counsel for the petitioner cannot be made applicable to the facts of this case. Thus, he sought for dismissal of both the writ petitions. 9.Keeping the submissions made on either side, I have carefully gone through the materials available on record. https://hcservices.ecourts.gov.in/hcservices/ 4 10.The main submission of the learned counsel for the petitioner is that when the second respondent has chosen to impose penalty, he ought to have considered the representation made by the petitioner and ought to have given an opportunity to the petitioner to produce all the documents and also personal hearing to him. In this regard, the learned counsel for the petitioner has relied upon number of judgments. Absolutely there cannot be any quarrel in accepting the said legal principles. But, in the instant cases, the materials placed on record would show that the petitioner was given pre-assessment notices as early as on 24.01.2013. The impugned orders were issued on 31.12.2013. In between the pre-assessment notices and the impugned orders, there is a long gap of ten months. Though the petitioner has stated that he has sought for 30 days time by making a representation dated 18.02.2013, to the second respondent, he has not produced any evidence before this Court to show that the said representation was received by the second respondent. More over, from the materials placed on record, it can be seen that the petitioner has not made any efforts to follow up the matter. Only after passing the impugned order, he has come forward with the case that inspite of his representation, no sufficient opportunity was given. 11.Considering the facts and circumstances of both the cases, I am of the opinion that the relief sought for by the petitioner cannot be granted, by applying the principles laid down in the judgments relied upon by the learned counsel for the petitioner. It is well settled legal principle that each case has to be decided only based on the facts of the circumstances of that case. Therefore, the judgments relied upon by the learned counsel for the petitioner cannot be made applicable to the facts and circumstances of these cases. I do not find any merit in both the writ petitions. Hence, both the writ petitions are dismissed. No costs. Consequently, connected miscellaneous petitions are also dismissed. Sd/- Assistant Registrar /True Copy/ Sub Assistant Registrar To 1.The Deputy Commissioner, Commercial Tax Ramanathapuram,Ramanathapuram District. 2.The Additional Commercial Tax Officer, Ramanathapuram,Ramanathapuram District. +1cc to Spl.Government Pleader Sr.No. 23955 gcg AA/20.05.2014/4p- 4c/ common order in W.P.(MD)Nos.5887 & 5888 of 2014 29.04.2014 https://hcservices.ecourts.gov.in/hcservices/ "