M/s Punj Lloyd Limited, Amalapuram v. The Commercial Tax Officer, Amalapuram, East Godavari Dist & Ors.

Aggrieved by the penalty order dated 16.03.2009 of the 1st respondent the petitioner preferred an appeal to the 2nd respondent along with an application for stay of collection of the disputed penalty. The 2nd respondent declined to grant stay by the order dt. 01.06.2009. Aggrieved thereby the petitioner preferred a revision before the 3rd respondent, which was rejected by the impugned proceedings dated

22.09.2009. Sri S.R.Ashok, the learned Senior Counsel representing the petitioner contends that the order of penalty imposed by the 1st respondent is patently without jurisdiction. We are not inclined to consider this contention on the merits of the penalty order or review the said order as the substantive appeal preferred by the petitioner thereagainst is pending before the 2nd respondent. The 1st respondent had determined the penalty exercising power u/Sec. 14(4) which enables imposition of a penalty as spelt out in Sec.14(8) of the 1957 Act. Sec. 14(8) enjoins that the penalty shall not be less than three times but may extend to five times of the tax due in case where the assessing authority is satisfied that the failure of the dealer to disclose the whole or a part of the turnover or other particulars correctly, or to submit the return before the prescribed date, was wilful. Where such failure is not wilful Clause (b) of Section 14(8) stipulates that the penalty should not exceed one half of the tax due. Whether the suppression of the purchase turnover by the petitioner was wilful or otherwise is a matter that ought to be and would be considered by the 2nd respondent in the appeal preferred by the petitioner. As the appeal is pending and against an order of penalty, we consider it inequitable that the respondents should collect the penalty which is determined at five times the tax liability, particularly in the context of the fact that the substantive tax liability determined has already been paid by the petitioner. We are of the considered view, in the circumstances, that ends of justice would be met by granting stay of all further proceedings including collection of the penalty as determined by the order of the 1st respondent dated 16.03.2009, on condition that the petitioner deposits 50 per cent of penalty as determined by the order of the 1st respondent dated 16.03.2009, within a period of four weeks from the date of receipt of a copy of this order. The order of the 3rd respondent dated 22.09.2009 is modified accordingly. The writ petition is accordingly disposed of as above, after hearing the learned counsel for the petitioner and the learned Special Government Pleader for Commercial Taxes Sri Balaji Varma. No costs. ______________________ GODA RAGHURAM, J ________________________ RAMESH RANGANATHAN, J 30th October 2009 GRR/PVSN