Madhya Pradesh High Court
M/S Chauradiya Edible Oil Private Lmd. vs The Commissioner Of Commercial Tax on 4 September, 2019
1
The High Court Of Madhya Pradesh
VATA No.48/2019
Jabalpur, Dated : 04-09-2019
Shri G. N. Purohit, learned Senior Counsel with Shri Uma
Parashar for the appellant.
Shri H. S,. Chhabra, learned Govt. Advocate for the
respondent/State.
Heard.
This appeal has been filed by the appellant being aggrieved by order passed by the Commercial Tax Appellate Board dated 16.4.2019, order dated 17.4.2013 passed by the appellate authority and the re-assessment order dated 22.11.2012 passed by the Divisional Dy. Commissioner, Commercial Tax, Chhindwara imposing penalty of Rs.4,89,177/- upon the appellant.
The brief facts of the case are that the appellant is involved in the process of manufacturing oil from rice bran. In the said process the appellant uses Hexane gas. Just prior to the relevant period of assessment i.e. 1.4.2008 to 31.3.2009, the rate of entry tax on Hexane was increased from 1% to 10% by notification dated 1.4.2007 and, therefore, for the relevant year the rate of Entry tax on Hexane was 10%.
The appellant filed a return, audit report and other documents before the assessing authority showing purchase of chemicals and not Hexane. It is stated that at the time of assessment, the relevant vouchers relating to purchase of Hexane were produced before the assessing authority inspite of which the authority, instead of assessing the entry tax of Hexane @ 1% has done so @ 10%. It is submitted that subsequently the order of assessment was taken up in reassessment and by the impugned order dated 22.11.2012 passed by the Divisional Dy. Commissioner, Commercial Tax, Chhindwara, while increasing the rate of tax on entry of Hexane from 1% to 10% a penalty 2 equal to three times the tax has been imposed upon the appellant under section 21(2) of the VAT Act. The orders imposing penalty have been affirmed and confirmed by the appellate authority as well as by the Appellate Board.
The learned Senior Counsel for the appellant submits that though in the return, the audit report and the initial documents filed by the appellant, the appellant did not show the purchase of Hexane but has only mentioned it as purchase of chemicals which was taxed @ 1%, however, at the time of assessment, the appellant produced the relevant vouchers relating to purchase of Hexane before the assessing authority as is evident from a bare perusal of the initial order of assessment dated 27.12.2010, Annexure A-1, wherein the assessing authority has specifically mentioned Hexane as one of the items for which entry tax was assessed. It is submitted that the aforesaid factual aspect clearly indicates that tax @ 1% instead of 10% was actually imposed by the assessing authority by mistake for which the appellant cannot be penalized, moreso when the appellant had produced the relevant vouchers before the assessing authority. It is submitted that in such circumstances, the penalty @ 300% i.e. 3 times the rate of tax that has been imposed upon the assessee by the authorities, is liable to be set aside.
We have heard the learned Senior Counsel for the appellant at length.
The provisions of Section 21(2) of the M.P. VAT Act, reads as under:-
"21(2) The commissioner shall, where the omission leading to assessment or re-assessment made under sub-section (1) is attributable to the dealer, impose upon him a penalty not exceeding 3.5 times the amount of tax so assessed or re-assessed but shall not be less than three times the amount of tax assessed."3
A bare perusal of this section makes it clear that the statutory provision casts a duty on the Commissioner to impose penalty not exceeding 3.5 times but not less than three times the amount of tax assessed on an assessee in cases where reassessment has been undertaken on account of an omission which is attributable to the dealer.
In the instant case, it is an undisputed fact that the appellant had filed a return as well as audit report and statement of accounts in which purchase of Hexane was not shown or mentioned and the appellant had simply stated that he had purchased chemicals. Apparently and admittedly, Hexane has been specifically mentioned under a separate entry in the schedule of the Entry Tax Act and a separate rate of tax @ 10% has been mentioned in respect of entry of Hexane in the local area.
In such circumstances and in view of the aforesaid admitted and undisputed facts, it cannot be said that the omission leading to re-assessment is not attributable to the appellant dealer. As the re-assessment on account of omission is attributable to the appellant, therefore, in view of the provisions of Section 21(2) of the Act, we do not find any illegality or perversity in the impugned orders passed by the authorities. We also do not find any substantial question of law arising for adjudication in the present appeal in the facts and circumstances of the present case as well as the provision of Section 21(2) of the Act.
In view of the aforesaid, the appeal filed by the appellant, being meritless is, accordingly dismissed.
(RAVI SHANKAR JHA) (VISHAL DHAGAT)
ACTING CHIEF JUSTICE JUDGE
mms/-
Digitally signed by MONSI M SIMON
Date: 2019.09.16 10:34:53 +05'30'