Chapter X of Punjab VAT Act 2005 deals with offences and penalties. Here below the penalty provisions under PVAT Act have been provided.
Penalty for failure to register: Section 52 of the Act provides for penalty for a dealer who is required to get registered under Punjab VAT Act but he fails to make an application for registration as required u/s 21(2) of the Act (I.e within 30 days from the date he becomes liable to pay tax).
Quantum of Penalty: Penalty is equal to the amount of tax due and interest from the date, the person becomes liable for registration till the date the application for registration is made.
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Penalty for Faliure to pay tax when due: Section 53.of PVAT Act provides penalty for failure to pay tax in accordance with the provisions of the PVAT Act.. For example if the tax is not paid within the due date of retun then penalty u/s 53 may be levied.
Quantum of Penalty: Penalty under this section may be levied at the rate of two per cent per month on the tax due and payable from the date, it had become due to the date of its payment, or to the date of the order of the assessment, whichever is earlier.the penalty under this section may be levied in addition to the tax due and simple interest payable u/s 32 of PVAT Act. The amount of penalty payable under this section, is calculated by considering a part of the month as one month.
Competent authority to levy the penalty: Assistant excise and Taxation Commissioner and Excise and Taxation officer within th jurisdiction of the District to which they are posted.
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Penalty for faliure to file return or Annual Statement: Section 54 of PVAT Act provides for penalty where a person required to furnish return or annual statement without sufficient cause .
(a)Fails to furnish any return or annual statement by the prescribed date; or
(b)fails to furnish along-with the return or annual statement, the proof of payment of tax in accordance with the provisions of this Act; or
(c)fails to rectify any error or omission in any return or annual statement in accordance with the provisions of this Act; or
(d)fails to comply with the requirements of any notice issued under this Act,
Quantum of penalty: In addition to tax, interest and penalty under any other provisions of this Act, a further penalty of a sum of rupees one hundred, per day of default, subject to the maximum of rupees ten thousand.
Competent authority to levy the penalty: Assistant excise and Taxation Commissioner, AETC working as senior auditors and Excise and Taxation officer within the jurisdiction of the District to which they are posted.
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Quantum of penalty: Penalty under this section is a sum equal to one and half times of the tax so collected.
Competent authority to levy the penalty: Assistant excise and Taxation Commissioner, AETC working as senior auditors and Excise and Taxation officer within the jurisdiction of the District to which they are posted.
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Penalty for evasion of tax: Under section 56 the penalty can be levied If the Commissioner or the designated officer is satisfied that the person, in order to evade or avoid payment of tax -
(a) has concealed any particulars from any return furnished by him; or
(b) has deliberately furnished incorrect particulars therein; or
(c) has concealed any transactions of sale or purchase from his account books; or
(d) has not maintained intelligible accounts, which prevent the Commissioner or the designated officer to assess the tax due from him; or
(e) has availed input tax credit to which he is not entitled to; or
(f) has claimed refund which was not due to him; or
(g) has claimed credit in respect of tax, which was not actually paid,
Quantum of penalty: In addition to the tax and interest payable, a sum equal to twice the amount of tax, assessed on account of the aforesaid reasons.
Competent authority to levy the penalty: Assistant excise and Taxation Commissioner, AETC working as senior auditors and Excise and Taxation officer within the jurisdiction of the District to which they are posted.
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Penalty for failure to issue invoice and use of false invoice
Section 57. provides penalty in two cases:(1) Penalty on a person, who fails to issue invoice for any sale transaction as required under section 45.
(2) A person, who issues a false invoice or receives and uses an invoice knowing such invoice to be false.
Quantum of penalty: In First case a penalty of rupees two thousand or double the amount of tax involved in the transaction, which-ever is higher.
In second case a penalty of rupees five thousand or double the amount of tax involved in the false invoice, whichever is higher.
Competent authority to levy the penalty: Assistant excise and Taxation Commissioner, Excise and Taxation officer within the jurisdiction of the District to which they are posted and the Excise and Taxation officer (Mobile Wing as specified by the Commissioner).
Penalty for misuse of registration number:
Section 58 of PVAT Act provides penalty on a person, who knowingly uses a false VAT registration number or TOT registration number, or uses a registration number of another person with a view to evade payment of due tax.
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Quantum of penalty: In addition to the due tax, penalty equal to the amount of tax evaded on the above account.
Competent authority to levy the penalty: Assistant excise and Taxation Commissioner, Excise and Taxation officer within the jurisdiction of the District to which they are posted.
Penalty for non-payment of assessed demand
: Section 59. provides penalty where a person fails to make payment of the tax assessed or interest levied or penalty imposed on him or any other amount due from him under this Act within a period of thirty days from the date of service of the notice of demand.
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Quantum of penalty: In addition to the interest and the amount due, to pay, by way of penalty, a sum equal to two per cent per month of such amount of tax, penalty, interest or any other amount due for the period for which payment has been delayed after the date on which such amount was due to be paid.
Competent authority to levy the penalty: Assistant excise and Taxation Commissioner, Excise and Taxation officer within the jurisdiction of the District to which they are posted.
Penalty in cases not covered elsewhere
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Section 60 provides penalty that whosoever contravenes or fails to comply with, any of the provisions of this Act or the rules made thereunder or any order or direction made or given thereunder, shall, if no other penalty is provided under this Act for such contravention or failure, be liable to pay penalty, not exceeding rupees ten thousand, subject to a minimum of rupees one thousand.
Where such contravention or failure continues thereafter, the person shall be liable to pay a further penalty of rupees one hundred per day from the due date specified for payment of penalty under sub-section.
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No penalty can be levied without show cause notice: Section 61 provides that No penalty shall, however, be imposed, unless the person concerned is afforded an opportunity of being heard by serving a notice. Thus penalties under PVAT Act are not mandatory but are to be imposed after reasonable opportunity of being heard after a notice to that effect.
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