A two judge bench of the Supreme Court put a stay on the imposition of fine under section 42(5) of the OVAT Act on Anant Automobiles. The Court is due to hear a Special Leave Petition on the matter. A Special Leave Petition on this matter is scheduled for a hearing, during which the bench will determine the appropriateness of imposing fines.
The appellant, Ananta automobiles, a private limited company, as registered dealer engaged in purchase and sale of vehicle- “RIHNO‟ with its parts and accessories. A duly constituted audit team u/s.41(1) of the OVAT Act on visit to the dealer‟s unit submitted Audit Visit Report (in short, the AVR) suggesting audit assessment about the discrepancies like (i) wrong claim of ITC of Rs.1,46,538.00 against purchase of paper and paints, (ii) non-payment of VAT against sale of two cars value of Rs.7,68,192.00, (iii) non-inclusion of an amount of Rs.20,99,356.00 received against warranty replacement scheme in the GTO and TTO and (iv) stock discrepancy of the spare parts worth of Rs.61,63,973.00.
The appellant had contended before CESTAT that and additional grounds are:- the first appellate authority has committed error in confirming the order of assessing authority by disallowing the income tax credit claim on paper and paints used as consumable under the definition of input as per the OVAT Act. The dealer is eligible for income tax credit on purchase of paper and paints amounting Rs.1,46,538.00.
The appellant had further contended that under the wrong notion the dealer has admitted a finding which is otherwise unsustainable in law. It never can be said that the door of the Tribunal in second appeal is shut for him because the question of estoppel can be raised at any stage. The petitioner argued there is no estoppel on the point of law.
Revenue had contended that denial/reversal of income tax credit as per sec.20 of the OVAT Act relating to purchase of “paper‟ and “paints‟ by both the for below is in accordance to law since these goods were not included in the R.C. of the dealer as input or consumable. The appellant-dealer has sold two nos. of cars of Rs.7,68,192.00 without collecting or paying VAT on it. Revenue argues that the Penalty as imposed as per sec.42(5) of the OVAT Act is just and proper.
The Orissa High Court had upheld the Revenue’s imposition of penalty under Section 42(5) of the OVAT Act. The two judge bench of the Supreme Court comprising Abhay S Okha and Ujjal Bhuyan imposed a stay on implementing the order of the Orissa High Court.
The appellant was represented by Lenin Raj K ,Ronak Karanpuria, Parteek Kumar and Akarsh Jain. Revenue was represented by Dhananjaya Misra and Navneet Dogra.
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