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CHAPTER VI

PENALTY AND INTEREST

29.  Imposition of penalty in certain instances:-

         1[(1) ***]

          1[(2) ***]

        1a[ (2A)  While or after passing any order in respect of any dealer under any provisions of this Act, it appears to the Commissioner that, the dealer has failed to apply for registration as required under this Act or has carried on business  as a dealer without being registered in contravention of the provisions of this Act,  then the Commissioner may, after giving the dealer a reasonable opportunity of being heard, impose upon him, by way of penalty,  a sum equal to the amount of tax payable by the dealer for the period during which he has carried on business as a dealer without being registered in contravention of the provisions of this Act.]

            (3)  2[While or after passing any order] under this Act, in respect of any person or dealer, the Commissioner, on noticing or being brought to his notice, that such person or dealer has concealed the particulars or has knowingly furnished inaccurate particulars of any transaction liable to tax or has concealed or has knowingly mis-classified any transaction liable to tax or has knowingly claimed set-off in excess of what is due to him, the Commissioner may, after giving the person or dealer a reasonable opportunity of being heard, by order in writing, impose upon him, in addition to any tax due from him, a penalty equal to not exceeding the amount of tax due but not less than 25 percent of the amount of tax found due as a result of any of the aforesaid acts of commission or omission.

          (4)  Where any person or dealer has knowingly issued or produced any document including a false bill, cash memorandum, voucher, declaration or certificate by reason of which any transaction of sale or purchase effected by him or any other person or dealer is not liable to be taxed or is liable to be taxed at a reduced rate or incorrect set-off is liable to be claimed on such transaction, the Commissioner may, after giving, the person or dealer a reasonable opportunity of being heard, by order in writing, impose on him in addition to any tax payable by him, a penalty equal to the amount of tax found due as a result of any of the aforesaid acts of commission or omission.

       3[(5) Where a dealer has sold any goods and the sale is exempt, fully or partly, from payment of tax by virtue of any provision contained in sub-section (3), (3A), (3B) or (5) of section 8, and the purchaser fails to comply with the conditions or restrictions subject to which the exemption is granted, then the Commissioner may, after giving the said purchaser a reasonable opportunity of being heard, impose penalty on him equal to one and a half times the tax which would have become payable on the sale if the said exemption was not available on the said sale.]

         (6)  Where, any person or dealer contravenes the provision of section 86, so as to have the quantum of tax payable by him to be under-assessed, the Commissioner may, after giving the person or dealer a reasonable opportunity of being heard, by order in writing, impose on him, in addition to any tax payable by him a penalty equal to half the amount of tax which would have been under-assessed or 4[one thousand rupees], whichever is more.

          (7)  Where, any person or dealer has failed without reasonable cause to comply with any notice in respect of any proceedings, the Commissioner may, after giving the person or dealer a reasonable opportunity of being heard, by order in writing, impose on him, in addition to any tax payable by him, a penalty equal to 5[five thousand rupees].

(7A) In case of a dealer who has filed late return on or after the 1st August 2012 and has also paid the late fee under sub-section (6) of section 20 the penalty in respect of such return if any imposed under sub-section (8) of this section as it existed shall not be recovered.

       6[(8) * * * ]

         (9)  7[(a) * * *]

               7[(b) * * *]

                 (c)  Where a dealer has filed a return 8[***] and such return is found to be not 9[complete and self-consistent], then the Commissioner may, after giving the dealer a reasonable opportunity of being heard, impose on him, by order in writing, a penalty of rupees one thousand.  The levy of penalty shall be without prejudice to any other penalty which may be imposed under this Act.

     10[(10) Where a person or dealer has collected any sum by way of tax in contravention of the provisions of section 60,—  

(a)  he shall be liable to pay a penalty not exceeding two thousand rupees, and

(b)   in addition, any sum collected by the person or dealer in contravention of section 60 shall be forfeited to the State Government.

                           If the Commissioner, in the course of any proceeding under this Act or otherwise, has reasons to believe that any person has become liable to a penalty or forfeiture or both penalty and forfeiture of any sum under this sub-section, he may serve on such person a notice in the prescribed form requiring him on a date and at a place specified in the notice to attend and show cause why a penalty or forfeiture or both penalty and forfeiture of any sum as provided in this sub-section should not be imposed on him. The Commissioner shall thereupon hold an inquiry and shall make such order as he thinks fit. When any order of forfeiture is made, the Commissioner shall publish or cause to be published a notice thereof for the information of the persons concerned giving such details and in such manner as may be prescribed.]

     11[(11) No order levying penalty under the foregoing provisions of this section shall be passed in respect of any period after 12[eight years] from the end of the year containing the said period.]

(11A) Notwithstanding anything contained in sub-section (11) penalty under this section may be imposed while passing an order under this act.

       (12)  deleted

      (13)  For the purposes of this section, Commissioner includes any appellate authority appointed or constituted under this Act.

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1.    Sub-sections (1) & (2) were deleted  by Mah. Act No. XIV of 2005, dated the 31st March, 2005 w.e.f. 1.4.2005

1a.  This sub-section was inserted by Mah. Act No. VIII of 2012 dated 25.4.2012 w.e.f.1.5.2012.

 2.   These words were substituted by Mah. Act No. XIV of 2005, dated the 31st March, 2005 w.e.f. 1.4.2005.

3.    Sub-section (5) deleted  by Mah. Act No. XIV of 2005, dated the 31st March, 2005 w.e.f. 1.4.2005 and again the Sub-section (5)” was inserted by Mah. Act No. XXXII of 2006, dt. 5.8.2006 w.e.f. 20.6.2006

4.   Substituted for the words ”one hundred rupees” w.e.f. 1.5.2010 by Mah. Act No.XII of 2010 dt. 29th April 2010

5.    Substituted for the words ”one thousand rupees” w.e.f. 1.5.2010 by Mah. Act No.XII of 2010 dt. 29th April 2010

6.    Sub-section (8) was substituted by Mah. Act No. XVII of 2009, dt. 27.6.2009  w.e.f. 1st July, 2009. Prior to substituted the Sub-section (8)” was read as under :-

            (8) Where, any person or dealer has failed without reasonable cause to file within the prescribed time, a return for any period as provided under section 20, *[X X X] the Commissioner may, after giving the person or dealer a reasonable opportunity of being heard, by order in writing, impose on him, in addition to any tax payable by him, a sum of **[rupees ten thousand] by way of penalty.  Such penalty shall be without prejudice to any other penalty, which may be imposed under this Act :

            Provided that, if the return is filed before the initiation of the proceeding for levy of penalty, the penalty shall be levied at ***[rupees five thousand] and in any other case, the penalty shall be levied at **[rupees ten thousand].”

*      These words were deleted by Mah. Act No. XIV of 2005, dated the 31st March, 2005 w.e.f. 1.4.2005.

**    These words were substituted for the words rupees two thousand” by Mah. Act No. VIII of 2008, dt. 31.3.2008, s.2(a) w.e.f. 1st May 2008 as per Notification No. VAT.1508/C.R.-8/Taxation-1, dt. 11th April, 2008.

***   These words were substituted for the words rupees one thousand” by Mah. Act No. VIII of 2008, dt. 31.3.2008, s.2(b) w.e.f. 1st May 2008 as per Notification No. VAT.1508/C.R.-8/Taxation-1, dt. 11th April, 2008. (for Clarification refer Commissioner Tr. Cir. No. 13T of 2008, dt. 8.4.2008).

       And again this sub-section was deleted by Mah. Act No. VIII of 2012 dated 25.4.2012 w.e.f.1.8.2012.  Prior to deletion this sub-section read as:

        (8)  Where, any person or dealer has failed to file within the prescribed time, a return for any period as provided in section 20, the Commissioner shall impose on him, a sum of rupees five thousand by way of penalty. Such penalty shall be without prejudice to any other penalty which may be imposed under this Act.”

 7.  These Paragraphs (a) & (b) were deleted by Mah. Act No. XIV of 2005, dated the 31st March, 2005 w.e.f. 1.4.2005.

8.    These words were deleted by Mah. Act No. XIV of 2005, dated the 31st March, 2005 w.e.f. 1.4.2005.

9.    These words were substituted by Mah. Act No. XIV of 2005, dt. 31-3-2005 w.e.f. 1.4.2005.

10.      Sub-section (10) was substituted by Mah. Act No. XIV of 2005, dated the 31st March, 2005 w.e.f. 1.4.2005.

11.  Sub-section (11) was substituted by Mah. Act No. XIV of 2005, dt. 31.3.2005 w.e.f. 1.4.2005.

12.  These words were substituted for the five years” by Mah. Act No. XII of 2010 dt.29.04.10 w.e.f. 1st May, 2010

13.  These words were substituted by Mah. Act No. XIV of 2005, dt. 31.3.2005 w.e.f. 1.4.2005.

14.  These words were inserted by Mah. Act No. XIV of 2005, dt. 31.3.2005 w.e.f. 1.4.2005.

15.  These words were substituted by Mah. Act No. XIV of 2005, dt. 31.3.2005 w.e.f. 1.4.2005.