Lakhani Foot Care Ltd. vs State of Madhya Pradesh

Heard on IA No. 1425 of 2014, an application filed by the petitioner for placing subsequent events on record. Along with the aforesaid application, the petitioner has filed an order dated January 6, 2012 passed by the Madhya Pradesh Commercial Tax Appellate Board (for short, "the Board"), Bhopal in Appeal No. 629/CTAB/08 (Entry Tax) in relation to the period April 1, 2003 to March 31, 2004.

On due consideration, the application is allowed.

With consent heard finally.

According to the petitioner, the said Second Appeal No. 629/2008 has been allowed by the Board and the original assessment order has been set aside, with direction to the assessing officer to pass fresh order, in accordance with law.

The learned counsel for the petitioner, placing reliance on the judgment passed by a Division Bench of this court in the case of Laxhman Das Gunamal v. State of MP [2014] 24 STJ 324 (MP), has submitted that in the similar circumstances, when the second appeal filed by the petitioner against the assessment order was pending despite that, the assessing authority levied penalty; the Division Bench held that the penalty could be levied only after the assessment order has attained finality and so long as the second appeal is pending, the assessment order has not attained finality.

The learned counsel for the petitioner submits that the petitioner''s case is on better footings, as the second appeal, which was filed by the petitioner against the assessment order, has now been decided in favour of the petitioner-assessee and the order of assessment has been set aside and the matter has been remanded back to the assessing officer for fresh decision. In the circumstances, he submits that this petition may be disposed of by setting aside the impugned revisional order dated November 22, 2008 (annexure P/11) as also the original penalty order dated June 28, 2008 (annexure P/8).

Ms. Mini Ravindran, learned Deputy Government Advocate, on the other hand, submits that if the aforesaid orders are being quashed, a liberty may be granted to the respondent/State to initiate fresh proceedings for penalty, in case need so arises.

Having considered the aforesaid submissions of the learned counsel for the parties and the law laid down by this court in the case of Laxhman Das Gunamal [2014] 24 STJ 324 (MP), we are of the view that this petition deserves to be allowed, as we find that the penalty was levied during the pendency of the second appeal against the assessment order and moreover now the said second appeal has been allowed and the matter has been remitted to the assessing officer to pass fresh order.

Accordingly, we quash the impugned order dated November 22, 2008 (annexure P/11) as also the original penalty order dated June 28, 2008 (annexure P/8); however, with liberty to the respondent/State to initiate fresh penalty proceedings, if need so arises. The petition stands allowed to the extent indicated hereinabove.