Remand of penalty orders in appeal whether justified?

Meaning of Remand:When an appellate court sends an appealed case back to the trial court for further action, the case is said to be remanded. This usually happens if the trial judge has made an error which requires a new trial or hearing.

Under Tax laws, in cases where penalty is imposed by the penalizing officer, the appellate authority may quash the penalty if its found to be imposed on illegal grounds

It has been seen in some cases where the penalty orders that have been appealed against, are remanded back to the penalizing officer for deciding a fresh on such proceedings. The question arises where penalty orders suffers from procedural infirmities or where penalty has been imposed on a tax payer arbitrarily without following rules of natural justice, should these orders be quashed for want of legality or should they be remanded for fresh hearing to the penalizing officer and subjecting a tax payer to penal proceedings again?   

For example, in a recent case namely Snoline/Snowline Air Conditioner Vs State of Punjab decided on 17-12-2010 by PVAT Tribunal(2011) 16 STM 332 where the penalty was imposed u/s 14-B(6)(i) of Punjab General Sales Tax Act 1948 and the case was remanded for denovo orders to the designated officer on the ground that “As per records, the goods were detained on 07-05-2003 and the penalizing officer imposed a penalty on 07.05.2003. It appears that no inquiry was made by penalizing officer before imposition of penalty. The case is remanded to the penalizing officer to afford proper opportunity of being heard to the appellant and pass de-novo orders.”

Now in the above case according to the tribunal inquiry was not conducted properly so as to come to conclusion whether the penalty was rightly imposed or not. If an order of penalty is suffering from procedural infirmities due to fault of the penalizing authority leving penalty, then such order of penalty should be quashed instead of being remanded, more so in tax laws which are welfare laws made for the welfare of general public. Tax payer should not suffer for the fault of the penalizing authorities, committed in initiating and concluding penal proceedings.

Subjecting a tax payer to penal proceedings twice in a welfare law would be prejudicial to his interest and also would amount to double jeopardy and causes unnecessary hardship and harassment to such tax payer. In the instant case the striking question is that why taxpayer should be asked to suffer the penal proceedings more than once and give justification to the penalizing officer again when the original penalty order in itself is suffering from arbitrariness and where no opportunity of being heard was provided to the tax payer.

Where a person effected by an arbitrary penalty order comes to appellate authority for justice then justice should be given by quashing such arbitrary order instead of remanding the case to the same person who has earlier subjected appellate party to arbitrariness.The ultimate aim of remanding is to provide justice and relief to the party adversely effected by the original order, by remanding the penalty proceedings back to the penalizing officer no relief is granted to the suffering party but he is instead subjected thereby to harassment by forcing him to plead his innocence again before the penalizing officer who earlier had passed an arbitrary order.  

Conclusion: In  cases where penalty is imposed arbitrarily without giving an opportunity of being heard to the taxpayer and more so without conducting inquiry, there should be quashing of such orders instead of remanding the case back to the penalizing officer for de-novo consideration. Rationale behind remanding back of  penalty orders for de-novo consideration should be considered by the higher judiciary.

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