Essar Project (India) Ltd. vs The State of Madhya Pradesh

Calling in question tenability of orders dated 25.3.2014 Annexure P/1 and 27.9.2013 Annexure P/2 passed by respondents No. 3 and 2 respectively, proposing to recover the penalty imposed pending finalization of an appeal u/s 46 of the M.P. Value Added Tax Act and contending that pending finalization of the appeal, the penalty amount cannot be recovered, this writ petition has been filed.

It is the case of the petitioner that against the original assessment order passed and the order of the assessing officer imposing the penalty, an appeal is already pending before appropriate Appellate Board and during the pendency of the appeal, as penalty is being imposed and recovery is being done, this writ petition has been filed and in support of the contention that pending finalization of the appeal before the appellate authority, the penalty cannot be imposed or recovered learned counsel for the petitioner has drawn our attention to an order dated 25.3.2014 passed by a Coordinate Bench of this Court in W.P. No. 4336/2012 (M/s. Laxhman Das Gunamal Vs. State of M.P. & others), wherein it has been held by the learned Coordinate Bench that so long as the second appeals is pending and the assessment order has not attained finality, the penalty proceedings is not permissible and the matter was remanded back to the second appellate authority to proceed and decide the second appeal expeditiously.

Keeping in view the aforesaid observations made by a Coordinate Bench, we see no reason to take a different view in the present case also. Once an appeal is pending before the second appellate authority, it was not proper for the assessing officer to initiate proceedings for imposition of penalty u/s 52 of the MP VAT Act, once the appeal is pending consideration in second appeal and the assessment order has not attained finality.

Keeping in view the aforesaid, the impugned orders dated 25.3.2014 and 27.9.2013 Annexures P/1 and P/2 are hereby quashed and the second appellate authority is directed to decide the appeal in accordance with law after hearing all concerned within a period of two months from the date of receipt of certified copy of the order and liberty is granted to respondent Assessing Officer to proceed with the matter for imposition of penalty thereafter, if permission under law.

With the aforesaid, the petition is allowed and disposed of. No order as to costs.

C.c. as per rules.