Gujarat High Court
State Of Gujarat vs Jay Steel And Tubes ... on 25 November, 2014
Bench: Akil Kureshi, Vipul M. Pancholi
O/TAXAP/1284/2014 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 1284 of 2014
With
CIVIL APPLICATION (OJ) NO. 650 of 2014
In
TAX APPEAL NO. 1284 of 2014
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STATE OF GUJARAT....Appellant(s)
Versus
JAY STEEL AND TUBES TRADERS....Opponent(s)
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Appearance:
MR JAIMIN GANDHI, AGP for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI
Date : 25/11/2014
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. State is in appeal against the judgment of the Gujarat Value Added Tax Tribunal ('the Tribunal' for short) proposing following questions for our consideration:
"(1) Whether Tribunal erred in deleting levy of interest and penalty merely because assessee had excess input credit adjustable against tax demand?
(2) Any other substantial question sof law as may be deemed fit by the Hon'ble High Court may kindly be framed."
2. From the record, it emerges that the Revenue contests the deletion of interest and penalty by the Tribunal in case of the respondent - assessee. The Tribunal in the impugned judgment also held as under:
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O/TAXAP/1284/2014 ORDER
"The appellant has paid the amount of tax fully therefore, we are not disturbing the amount of carried forward ITC. The appellant is entitled to claim said ITC for next tax period. As stated above, the appellant is not liable to pay interest on tax demand as the ITC was first required to adjust against the current year liability as per the provision of rule 18 of the Rule. The appellant had sufficient balance of ITC to adjust against the additional tax liability, which aroused due to disallowance of ITC. We therefore, remove entire interest and penalty. We pass following order."
3. From the observation of the Tribunal, it appears that though the assessing officer had raised additional tax demand of Rs.76,010/ and imposed interest and penalty on such basis, the Tribunal was of the opinion that the assessee had sufficient Input Tax Credit and those tax credits could have been adjusted against the assessee's additional assessed tax liability. That being the position, the Tribunal correctly held that the interest could not be charged. Further, we notice Section 34(7) of the Gujarat Value Added Tax Act, which pertains to the power of the Commissioner to impose penalty, begins with the expression "if a Commissioner is satisfied that the dealer, in order to evade or avoid payment of tax........" Under the circumstances, the basic intention of attempting to evade or avoid payment of taxes would be necessary for imposing penalty.
4. When the Tribunal found on facts that in view of availability of input tax credit as against the assessed additional tax, there was no intention on part of the assessee to avoid payment of taxes, no question of law arises. Tax appeal is dismissed. Civil Application also dismissed.
(AKIL KURESHI, J.)
(VIPUL M. PANCHOLI, J.)
Jani
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