M/S.S.B.Enterprieses vs. State Of Orissa

Held

The Court answered Question No. I by setting aside the impugned order of the Tribunal. The matter was remanded to the Assessing Officer, specifically the State Tax Officer, CT & GST, Bhubaneswar-I Circle, Bhubaneswar, for a fresh determination of the issue in accordance with the law. In light of the decision on Question No. I, the Court held that Question No. II did not require an answer. The ratio decidendi for Question I is that the applicability of Rule 12(3)(g) for penalty on short payment of admitted tax, when separate mechanisms for interest and penalty exist, requires fresh determination by the Assessing Officer. The operative direction was the remand of the case for fresh adjudication.

Facts

The petitioner, M/s. S.B. Enterprises, is challenging an order passed by the Division Bench-III of the Odisha Sales Tax Tribunal. The dispute pertains to the imposition of penalty under Rule 12(3)(g) of the CST (O) Rules for a short payment of admitted tax amounting to Rs. 63,224.00. The petitioner contends that separate mechanisms exist under Rules 8 and 8A of the CST (O) Rules for levying interest and penalty, making the imposition under Rule 12(3)(g) improper. The Tribunal had held the petitioner to be fraudulent for making false declarations and not paying due tax, leading to the penalty.

Key Issues

1. Whether, on the facts and circumstances of the case, the Division Bench-III, Odisha Sales Tax Tribunal is right in law to order for imposition of penalty under Rule 12(3)(g) of CST (O) Rules, on short payment of admitted tax of Rs.63,224.00 as being assessed is just and proper, more so when separate mechanism has been provided under Rule 8 and 8A of the CST (O) Rules for levy of interest and penalty respectively? 2. Whether, on the facts and circumstances the Division Bench-III, Odisha Sales Tax Tribunal is right in law to hold, the petitioner is a fraudulent one for making false declaration and also not paying due tax to the State Exchequer and accordingly imposed penalty under Rule 12(3)(g) of CST (O) Rules? Petitioner's Argument: The petitioner argued that the imposition of penalty under Rule 12(3)(g) of the CST (O) Rules for short payment of admitted tax was not justified, as distinct provisions (Rules 8 and 8A of CST (O) Rules) exist for the levy of interest and penalty. Revenue's Argument: The judgment does not record any specific arguments made by the revenue or State.