M/S Siddhartha Bronze Products (P) LTD., Gurgaon vs. State Of Haryana And Others

Held

The Court held that the penalty for suppression of turnover could be sustained even if the turnover was reflected in the books of account. The primary issue was the suppression of turnover in the returns filed and during assessment proceedings. Section 38 of the Act applies to maintaining false or incorrect accounts, concealing particulars, or furnishing false/incorrect returns. The appellant suppressed turnover not only in returns but also during Section 15(3) proceedings, and illegally retained tax charged from purchasers. The Court found the appellant's argument that an authorized representative committed mischief unconvincing, stating that a public limited company's returns would typically be verified, and any mistake should have been highlighted during assessment. The authorities relied upon by the appellant were distinguished. Sree Krishna Electricals was distinguished as the sales were shown, unlike the present case where returns were nil. M/s Anantharam Veerasinghaiah & Co. was deemed unhelpful as the appellant's conduct (retaining tax, filing nil returns, suppressing turnover until a complaint) demonstrated conscious concealment. M/s Hindustan Steel Ltd. was distinguished as the present case involved deliberate defiance of law and dishonest conduct, not merely failure to carry out a statutory obligation. The Tribunal's sustaining of the penalty was upheld. The appeals were dismissed.

Facts

The appellant, M/s Siddhartha Bronze Products (P) Ltd., filed two appeals against orders of the Haryana Tax Tribunal concerning assessment years 2004-05 and 2006-07. The initial assessment for 2004-05 was finalised on 18.3.2008 based on declared nil turnover. Following a remand by the 1st Appellate Authority, the department received information about significant sales in the 2nd and 3rd quarters of that year, amounting to `5,37,68,173/- and `5,10,70,645/- respectively, for which nil returns were filed. A reassessment demand of `38,47,005/- was raised. Subsequently, a penalty of `1,29,45,225/- was imposed under Section 38 of the Haryana Value Added Tax Act, 2003, for suppression of turnover. Appeals against the penalty order were dismissed by the 1st Appellate Authority and the Tribunal, leading to the present appeal.

Key Issues

1. Whether the statutory notice in Form N-2 issued in the name of Gujarat is illegal and makes the assessment bad ab initio, given the assessing authority's jurisdiction is confined to the State boundaries? (Question of law) 2. Whether the reassessment and consequential penal proceedings are barred by limitation? (Question of law) 3. Whether proceedings for penalty levy without statutory notice in Form are legal? (Question of law) 4. Whether penalty can be imposed for suppressed turnover when the record was seized by Central Excise Authorities, no document was available to the appellant to disclose sales, but the turnover was part of the Balance Sheet? (Question of mixed law and fact) 5. Whether penalty can be imposed for suppression of turnover when the turnover was part of books of account but could not be reflected in returns due to records being with Central Excise Authorities, and proceedings were through bankers and buyers who availed input tax credit in the State? (Question of mixed law and fact) Petitioner's arguments: The appellant contended that the goods were received via stock transfer from Gujarat, statutory forms were issued, and sales were made to M/s Jindal Stainless Steels Ltd., with ST-38 forms and C-4 certificates provided for input tax credit. They argued that sales could not be kept out of books of account, thus no suppression occurred. They attributed the non-disclosure to mischief by an authorized representative and argued there was no malafide intention. The appellant relied on Sree Krishna Electricals v. State of Tamil Nadu, M/s Anantharam Veerasinghaiah & Co. v. C.I.T., and M/s Hindustan Steel Ltd. v. State of Orissa. Revenue's arguments: The judgment does not explicitly record separate arguments for the revenue beyond what is implied in the court's reasoning and the dismissal of the appeal.