No Penalty u/s 53(1) of Tripura VAT Act in Absence of Prescribed Format of Audit Report: Tripura High Court [Read Order]

The Tripura High Court in its recent judgement held that no penalty under section 53(1) of the Tripura Value Added Tax Act, 2004 in the absence of the prescribed format of the audit report.

M/S Gemini Distilleries (Tripura) Pvt. Ltd, the petitioner challenged the order which imposed the penalty of Rs. 2,73,800.30 imposed under Section 53 of the TVAT Act, 2004. The proceedings were initiated under Section 31(1) of the TVAT Act, 2004, for the assessment year 2016-17.

The petitioner’s turnover was above Rs. 40 lakhs, and the accounts were to be audited in terms of Section 53 of the TVAT Act, 2004. Petitioner contended that in the absence of a prescribed format as per Section 53(1) of the Act, 2004, the petitioner could not be made liable for penalty on failure to submit the audited report within the prescribed time.

It was urged absence of notice before the imposition of penalty which is in the teeth of the provisions of Section 53(3) of the Act, 2004, and violation of principles of natural justice as well. 

On the other hand, the respondent stated that the petitioner did not take any plea of absence of prescribed format under the Rules for delayed submission of the audited reports for the relevant assessment years 2015-16 to 2018-19, which includes the present assessment year in question 2016-17. 

It was submitted that the Assessing Officer has recorded that the company had filed all returns under Section 24 of the TVAT Act, 2004 every month but the return for the month of April 2016 was submitted after a delay of 1 day for the A.Y. 2016-17 (detail in return statement).

It was evident that the penalty imposed upon the petitioner for violation of Section 53(1) of the TVAT Act, 2004 suffers from a lack of proper notice and absence of reasonable opportunity of being heard, as is required under Section 53(3) of the Act, 2004.

A two-judge bench comprising Chief Justice Aparesh Kumar Singh and Justice Arindam Lodh observed that the proceedings were initiated under Section 31(1) of the TVAT Act, 2004, but no separate notice was issued under Section 53(1) of the Act, 2004 before the imposition of penalty. 

The Court quashed the impugned penalty in the absence of a prescribed format for the submission of audited returns in terms of Section 53(1) of the Act, 2004. Further held that “except the penalty part, the rest of the assessment order remains intact.”

To Read the full text of the Order CLICK HERE

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