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2011 DIGILAW 216 (GUJ)

HIREN MAHENDRABHAI VAYA v. STATE OF GUJARAT

2011-03-16

H.B.ANTANI, HARSHA DEVANI

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JUDGMENT H. B. ANTANI :- The petitioner, by way of filing the present petition under article 226 of the Constitution of India, challenges the order passed by respondent No. 2 dated August 23, 1996, whereby the penalty has been reduced to Rs. 50,000 though according to the petitioner he had not committed any irregularity under the provisions of the Act and the Rules and the authority could not have charged the interest at the rate of 24 per cent per annum. The petitioner has installed "dish antenna" at bhuj and registered himself with the competent authority of the area during October, 1993. The petitioner also registered with respondent No. 4 and paid taxes as required under the provisions of the Gujarat Entertainment Tax (Amendment) Act, 1993 as well as the Gujarat Entertainment Tax (Exhibition By Means of Cable Television and Antenna) Rules, 1993, framed thereunder. It is submitted that the petitioner had merged the "dish antenna" centre with the capital network and Hari-Om cable network and retained the name of Hari-Om cable network on January 1, 1995. Respondent No. 4 carried out inspection in the premises of the petitioner on June 26, 1995 and the petitioner agreed to pay the entertainment tax of Rs. 77,990 for connections of capital network as well as Hari-Om cable network. Respondent No. 4 had issued notice to the petitioner on July 19, 1995 and fixed the hearing on August 21, 1995. The petitioner gave reply to the notice on September 4, 1995 and also made statement before the concerned authority which was recorded on June 26, 1995. It is submitted that respondent No. 4 vide order dated September 26, 1995 directed the petitioner to make payment of tax of Rs. 82,500 and imposed penalty of Rs. 1,44,675 and the total amount which the petitioner was required to pay was Rs. 2,27,175. The petitioner being aggrieved by the aforesaid order, preferred an appeal before respondent No. 3 - District Collector, under section 12 of the Gujarat Entertainment Tax (Amendment) Act, 1993. The petitioner was heard on December 11, 1995 and the Collector vide order dated January 9, 1996 dismissed the appeal and confirmed the order passed by respondent No. 4. 2,27,175. The petitioner being aggrieved by the aforesaid order, preferred an appeal before respondent No. 3 - District Collector, under section 12 of the Gujarat Entertainment Tax (Amendment) Act, 1993. The petitioner was heard on December 11, 1995 and the Collector vide order dated January 9, 1996 dismissed the appeal and confirmed the order passed by respondent No. 4. The petitioner thereafter preferred a revision application before respondent No. 2 on September 9, 1996 and respondent No. 2 vide order dated August 23, 1996 partly allowed the revision application and reduced the penalty from Rs. 1,44,675 to Rs. 50,000. The petitioner filed a review application before respondent No. 1 on December 3, 1996 and also on November 28, 1996 and further reminders on January 1, 1997 and July 15, 1997. Respondent No. 1 had alleged to have replied on November 7, 1996 but the petitioner had not received the communication from respondent No. 1. It is submitted that respondent No. 1 by letter dated September 3, 1999 informed the petitioner that the review application dated November 20, 1996 could not be entertained. The petitioner being aggrieved by the aforesaid order, has preferred the present petition assailing the order passed by the revisional authority. Mr. Dipen Desai, learned advocate for the petitioner, submitted that the revisional authority while confirming the order passed by the Collector has not appreciated the entire material on record of the case in its proper perspective. The penalty imposed by the authorities cannot be sustained as no finding or the evidence in that regard has been recorded and it was also not established that the petitioner had tried to evade the tax. The revisional authority has acted contrary to the provisions contained under section 93 of the Gujarat Entertainment Tax (Amendment) Act, 1993 and, therefore, the order deserves to be quashed and set aside. Ms. Maithili Mehta, learned AGP, has supported the reasoning given by the revisional authority and submitted that considering the fact that in spite of the provisions contained in the Act as well as Rules, the petitioner had not paid the tax for a period of 15 months and on the inspection being carried out by the Department, the tax was paid on June 26, 1995 as there was a clear case of tax evasion. The revisional authority, while exercising the power under section 13 of the Gujarat Entertainment Tax (Amendment) Act, 1977, has rightly imposed the penalty of Rs. 50,000 which has been reduced from Rs. 1,44,675 and, therefore, no interference is called for in the writ petition preferred by the petitioner. The learned AGP has also placed reliance on the affidavit-in-reply filed by the Deputy Collector, Bhuj Sub-Division and submitted that even as per section 6(b) of the Gujarat Entertainment Tax (Amendment) Act, 1993 the entertainment tax was to be paid in advance in quarterly instalment. It is further submitted that section 9 of the Act provides for assessments in the case of escapement of the payment of tax. If it is found by the prescribed officer that the payment of tax is not paid or wilfully evaded, then the prescribed officer can direct the proprietor to pay in addition to the tax assessed, the penalty in exceeding one and half times the tax so assessed. Thus, it is submitted that the contention raised by the petitioner has no merit and the petition in view of the reasoning given by the revisional authority and the affidavit-in-reply filed by the State Government, deserves to be dismissed with costs. We have heard Mr. Dipen Desai, learned advocate for the petitioner and Ms. Maithili Mehta, learned AGP, for the respondents at length and in great detail. We have also perused the averments made in the petition as well as the affidavit-in-reply filed by the Deputy Collector, Sub-Division, Bhuj. The petitioner has challenged the order passed by the revisional authority at annexure A to the petition by which the revisional authority has reduced the amount of penalty from Rs. 1,44,675 to the extent of Rs. 50,000 while exercising power under section 13 of the Gujarat Entertainment Tax (Amendment) Act, 1977. On a perusal of the reasoning given by the revisional authority, the petitioner was required to pay the entertainment tax in advance in quarterly instalment. The revisional authority held that the petitioner had not paid the tax for a period of 15 months. When the inquiry was made, the tax which was not paid for a period from April 1, 1994 to June 30, 1995, was paid after the inquiry. Even the connection which was started by the petitioner by its dish antenna was done without the prior intimation to the concerned authority. When the inquiry was made, the tax which was not paid for a period from April 1, 1994 to June 30, 1995, was paid after the inquiry. Even the connection which was started by the petitioner by its dish antenna was done without the prior intimation to the concerned authority. Thus, the petitioner had committed irregularity in starting the connection of dish antenna and had also evaded the payment of tax. The revisional authority has after considering the entire gamut and the evidence on record of the case held that the petitioner is liable to pay the fine of Rs. 50,000 instead of Rs. 1,44,675 which in our considered view is a maximum amount of penalty inflicted on the petitioner by the revisional authority for dodging/evading tax liability. We are, therefore, in complete agreement with the order passed by the revisional authority while exercising the power under section 13 of the Gujarat Entertainment Tax (Amendment) Act, 1977 and, therefore, no interference is called for in the order passed by the revisional authority as the petition is bereft of merits. In view of the aforesaid facts, the petition lacks merit and is dismissed accordingly. Rule is discharged with no order as to costs. Interim relief granted earlier stands vacated forthwith.