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Challenging
Penalty After Tax Payment is Lawful: Court Rules Appeal Rejection Improper
Case Summary: M/s. Aatral Associates vs. State Tax Officer &
Another
Case No.: W.P.No.21208
of 2024
Date of Order: 12.08.2024
Court:
High Court of Judicature at Madras
Judge:
Honourable Mr. Justice Krishnan Ramasamy
Facts of the Case:
The petitioner, M/s.
Aatral Associates, challenged the order dated 21.03.2023 issued by the 1st
respondent, where both tax and penalty were imposed. The petitioner paid the
tax amount but appealed against the penalty. The 2nd respondent rejected the
appeal, stating that the penalty alone could not be contested. Consequently,
the petitioner filed this writ petition challenging the 1st respondent’s order
on the grounds of violation of the principles of natural justice and being
contrary to the provisions of the CGST Act, 2017 and TNGST Act, 2017.
Submissions by the
Petitioner:
The petitioner argued
that the order dated 21.03.2023 was passed without following the principles of
natural justice. The petitioner had already paid the tax and challenged only
the penalty, which was unjustly rejected by the 2nd respondent on the basis that
the penalty alone cannot be appealed.
Submissions by the
Respondent:
The respondents contended
that the notice was issued as required and the order was passed imposing both
tax and penalty. They acknowledged that the petitioner had paid the tax and
only appealed against the penalty. The respondents requested the court to issue
appropriate directions regarding the appeal.
Findings and Judgement of
the Court:
The court observed that
the petitioner had indeed paid the tax amount and had only challenged the
penalty. It held that the 2nd respondent’s rejection of the appeal was
improper, as there is no prohibition in law against challenging only the
penalty. The court directed the 2nd respondent to take the appeal on record and
pass orders on its merits after providing sufficient opportunity to the
petitioner.
Conclusion:
The court set aside the
intimation issued by the 2nd respondent and directed them to consider the
appeal filed by the petitioner on the penalty alone.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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