INDIRECT TAX

1. Assessee can be prosecuted anytime when exonerated in penalty proceedings on ground of limitation and not on merits.
Excise & Customs : Where exoneration in adjudication/penalty proceedings was not on merits but on ground of limitation, assessee-accused cannot take shelter thereof to avoid prosecution proceedings; since there is no time-limit for launching prosecution, same can be launched despite recovery/penalty becoming time-barred.

2. Tax paid on violation of certain condition was to be refunded if that condition was withdrawn with retro-effect.
CST & VAT: Rajasthan VAT - Where Assessing Officer passed assessment order on 22-9-2006 and imposed tax upon assessee on plea that it had violated a condition of Sales Tax Incentive Scheme and against assessment order assessee filed appeal and deposited certain amount as precondition and subsequently State Government by notification dated 11-4-2007 deleted impugned condition with retrospective effect from 23-5-1987, since in terms of notification dated 11-4-2007 no tax was payable by assessee on date of assessment, it was entitled to refund of aforesaid amount deposited.

3. No penalty on short payment of tax when it wasn’t attributable to negligence of assessee.
CST & VAT : Maharashtra VAT - Where Assessing Authority levied penalty upon assessee under section 36(2)(c) read with Explanation 1 on plea that it had made lesser payment of tax along with returns, since lesser payment of tax was not attributable to a neglect by assessee, levy of penalty was not justified.

4. Admission of assessee regarding violation of orders restricting use of credit would lead to imposition of penalty.
Cenvat Credit : Assessee having admitted his default of violation of debarment orders restricting use of credit, penalty must necessarily follow and there is no need for appellate authority to go into notification, clarifications in budget or other provisions.

5. Normal tax rate would be applicable when assessee had opted for compounded facility after closure of year.
CST & VAT: Kerala VAT - Where assessee in earlier years had opted for payment of tax at compounded rates and during year in question he had not opted for payment of tax at compounded rates and he had opted compounding facility after close of year, rate of tax applicable under compounding scheme would not be attracted in instant case and regular rate of tax would be applicable.

6. Assessee is entitled to interest on refund granted through appellate order.
VAT/CST : Gujarat Sales Tax/VAT : Refund allowed on modification of assessment order in appeal, can be said to be granted as per 'modified assessment order' and therefore, assessee is entitled to interest on delayed grant of such refund.

7. Burden of proof to take credit lies on assessee; failure to prove receipt of inputs would lead to denial of credit.
Cenvat Credit : Burden of proof to take credit lies on assessee; hence, where department found that input supplier did not have manufacturing facilities and was passing on credit without supply of goods and even assessee failed to prove receipt and consumption of goods in his factory, credit could not be allowed to assessee.