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246 Goods & Services Tax Cases - Reports [Vol. 1
payable at the rate of 3 per cent only, then the penalty imposed on the
ground that the tax return was wrong would fall to ground. It is submitted
by him that tax return was held to be false, bad or wrong by the Assessing
Officer, because he was of the opinion that the tax was payable at the rate
of 12 per cent.
5. Learned counsel for the State on the other hand submitted that nongrant
of application under section 71 is based on justifiable grounds.
6. We have heard the parties and have perused the record. From the
assessment order dated 7-12-1991 it would clearly appear that the Assessing
Officer was of the opinion that the sales tax return was bad as the tax
was paid at the rate of 3 per cent only, while in fact the starter would attract
the rate of 12 per cent. After holding so, the Assessing Officer imposed the
penalty. Once the tax rate is held to be 3 per cent and it is further held that
imposition of the tax at the rate of 12 per cent is bad, then the return filed
by the present petitioner cannot be held to be false, wrong or bad.
7. Once the return is held to be properly filed and that the tax was paid in
accordance with law, then the Assessing Officer could not assume jurisdiction
to impose the penalty.
8. In the present matter in view of the findings recorded by the Appellate
Board, we have no hesitation in holding that penalty should also stand
nullified.
9. We, accordingly, quash the order pertaining to penalty. The petition is
allowed.
10. No costs.
GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 122
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