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2007 DIGILAW 1258 (PAT)

Indian Oil Corporation Ltd v. State Of Bihar

2007-08-01

KISHORE K.MANDAL, NARAYAN ROY

body2007
Judgment Narayan Roy, J. 1. Heard counsel for the parties. 2. This writ application is directed against order dated 18.5.2004 passed by the Commercial Taxes Tribunal, Bihar, Patna, in Revision Case No. PT-257/1997, whereby and whereunder imposition of penalty against the petitioner under section 16(9) of the Bihar Finance Act, 1981 (hereinafter to be referred to as "Act") for the period 1994-1995 was affirmed. 3. Dr. Debi Pal, learned counsel for the petitioner, submitted that the petitioner, who is engaged in distribution and sale of petroleum products through its sale depots and sale point throughout the country including the State of Bihar. The petitioner had deposited the admitted tax of Rs. 4,84,14,513/- for quarter ending on 31.12.1994 on 28.2.1995 though a prayer was made to condone the delay and extend the time for submitting the quarterly return till the end of February 1995. However, the assessing officer initiated a proceeding under section 69 of the Act for delay of payment of admitted tax. Pursuant to the notice, show-cause was filed showing its inability to compile the statement, which was necessary for ascertaining the admitted tax for the relevant quarter. However, a penalty was imposed under sec. 16(9) of the Act and a demand notice was served for Rs. 48,41,451.30 paise. 4. Dr. Debi Pal, learned counsel for the petitioner, submitted that pursuant to notice dated 13.3.1995, as contained in annexures 5 and 5/A the petitioner in all bona fide deposited advance tax of Rs. 13,50,00,000/-. Learned counsel therefore, submitted that the assessing officer has committed an error of law against the settled principles of law, wherein it was held that the order imposing penalty is quasi judicial in nature and it involves exercise of judicial discretion and further held that it is equally well settled that unless the party under obligation to pay tax has acted dishonestly, intentionally and in defiance of law or in conscious with regard to obligation and is guilty of contumacious conduct the penalty ordinarily will not be imposed even in case, where minimum penalty is prescribed. Learned counsel, in this view of the matter, submitted that the conduct of the petitioner cannot be said to be intentional or mala fide in view of the judgment of this Court in case of Indian Oil Corporation vs. The State of Bihar and Others [2003(3) Patna Law Journal Reports 561]. 5. Learned counsel, in this view of the matter, submitted that the conduct of the petitioner cannot be said to be intentional or mala fide in view of the judgment of this Court in case of Indian Oil Corporation vs. The State of Bihar and Others [2003(3) Patna Law Journal Reports 561]. 5. Learned Advocate General, appearing on behalf of the State, on the contrary, submitted that from the materials on record, it appears to be a case of wilful evasion of tax, and, therefore, imposition of penalty is wholly justified. 6. In view of the submission of learned counsel for the parties and materials available on record, it appears thai imposition of penalty would not be justified, as no ingredient of mens rea was found on the part of the petitioner and the delay in payment of tax cannot be said to be deliberate. 7. In the facts and circumstances of the case, and in view of the legal proposition, as referred to above, the order imposing penalty appears to be wholly unjustified and not sustainable in law. 8. In the result this application is allowed and the order imposing penalty upon the petitioner is hereby set aside. 9. No order as to costs.