2025-VIL-1215-TRI
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VAT High Court Cases

Tripura VAT Act, 2004 - Challenge to show cause notices imposing penalty under repealed Act, Refund of security deposit made by transporter – Petitioner was registered as a taxable transport agent under the Tripura VAT Act, 2004 and had deposited security deposit under the Act - After the TVAT Act was repealed and replaced by the Tripura GST Act, 2017, the petitioner applied for refund of the security deposit - Dept issued show cause notices proposing to impose penalty under the repealed TVAT Act for the periods from September 2013 to March 2014 and 2014-15 to 2017-18 - Whether the tax authorities can impose penalty under the repealed TVAT Act long after the alleged violations – HELD - The action of the tax authorities in issuing show cause notices in 2023 for alleged violations between 2013-2018 and passing orders imposing tax and penalty is arbitrary, illegal, without jurisdiction, and mala fide. The penalty provision under Section 77 of the TVAT Act should be interpreted strictly, and penalty can only be imposed if the transporter had acted deliberately in defiance of law or was guilty of contumacious or dishonest conduct. The tax authorities had mechanically imposed the 150% penalty without any such determination. Further, since the TVAT Rules required a dealer to preserve records only for 5 years, a transporter cannot be put in a worse position and subjected to penalty notices long after this period. The actions of the tax authorities were contrary to the intention of the legislature - Since no security deposit is required for a transporter to be registered under the TSGST Act, 2017 the tax authorities are bound to refund the security deposit to the petitioner. The tax authorities are directed to refund the security deposit with 7% interest from the date of the petitioner's application – The writ petitions are allowed
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