IN THE SUPREME COURT OF BANGLADESH HIGH COURT DIVISION

(SPECIAL ORIGINAL JURISDICTION)

WRIT PETITION NO.2174 of 2023 IN THE MATTER OF:

An  application  under  Article  102  of  the Constitution  of  the  People’s  Republic  of Bangladesh

And

IN THE MATTER OF: Mohammed Helal Uddin

........... Petitioner

       -vs-

National Board of Revenue and others

........ Respondents

And

Mr. Mohammad Nasim Miah, Advocate with

Mst. Halima Khatun Kona, Advocate

.... For the Petitioner

Mr. Samarendra Nath Biswas, D.A.G. with

Mr. Md. Abul Kalam Khan (Daud), A.A.G. and

Mr. Md. Modersher Ali Khan (Dipu), A.A.G.

..... For the Respondents-government

Heard on: 24.07.2024 and Judgment on:01.08.2024

 Present:

Mrs. Justice Farah Mahbub.

            And

Mr. Justice Muhammad Mahbub Ul Islam

Farah Mahbub, J:

In this Rule, issued under Article 102 of the Constitution of the People’s Republic of Bangladesh, the respondents have been called upon to show cause as to why the impugned order dated 19.12.2022 passed under Nothi No.4bÑ/H (12) 203/ j§pL g¡y¢L/J−um H¾V¡lfË¡CSz/pxcx/2021/8465 by the respondent No.2 so far it relates to imposition of penalty of Tk.14,83,442.49/- under Section

85(1)(X) of the VAT and Supplementary Duty Act, 2012 (Annexure-F), should not be declared to have been issued without lawful authority and hence, of no legal effect.

At the time of issuance of the Rule the operation of the impugned order dated 19.12.2022 passed under Nothi No.4bÑ/H (12) 203/ j§pL g¡y¢L/J−um H¾V¡lfË¡CSz/pxcx/2021/8465 by the respondent No.2 so far it relates to imposition of penalty of Tk.14,83,442.49/- under Section 85(1)(X) of the VAT and Supplementary Duty Act, 2012 (Annexure-F), was stayed by this Court for a prescribed period.

In  support  of  the  statements  so  made  in  the  writ  petition,  we  have heard Mr. Mohammad Nasim Maih, the learned Advocate appearing for the petitioner and Mr. Samarendra Nath Biswas, the learned Deputy Attorney General appearing for the respondents-government.

The  issue  in  question  has  earlier  been  resolved  by  this  Bench  in connection with W.P. No.14643 of 2022 in the case of The Cox Today Limited  -Vs-  The  Secretary,  Internal  Resources  Division,  Ministry  of Finance, Bangladesh and others,  an unreported decision, vide judgment

and order dated 10.03.2024 categorically observing, inter-alia:

“Section 73 of the VAT and Supplementary Duty Act, 2012  (in  short,  the  Act,  2012)  empowers  the  Commissioner concerned to make demand of VAT on the contexts as provided under  Clause  (ka)  –  (gha)  of  Section  73(1),  but  subject  to issuance of show cause notice and upon hearing the person concerned if objection thereto is raised by him.

Section 85, however, fixes the parameter for imposition

of  penalty  by  the  respective  VAT  officers  concerned  as mentioned in Section 86.

Rule 65 of the VAT and Supplementary Duty Rules, 2016

on the other hand prescribes the procedure for imposition of penalty.

Rule 65(1) deals with the contexts as prescribed under

clause (R), (S), (T) and  (X) of Section 85(1). Rule 65(2) provides for “d¡l¡ 85 Hl Efd¡l¡ (1) H h¢ZÑa Ll gy¡¢L pwœ²¡¿¹ hÉbÑa¡ h¡ A¢euj hÉa£a AeÉ ®k ®L¡e dl−el hÉbÑa¡ h¡ A¢eu−jl SeÉ”. However, in

both the cases question of imposition of penalty arises only

after final determination of unpaid or less paid or evaded amount of VAT “d¡l¡ 73 H E−õ¢Ma Ll ¢edÑ¡lZ L¡kÑLj pÇfæ L¢lu¡” but subject to issuance of show cause notice in Form Mushok 12.12. with particulars as prescribed in Rule 65(3). In addition, on  receipt  of  reply  thereto  the  officer  concerned  has  to give/provide opportunity of personal hearing under Rule 65(6). Subsequent thereto, the VAT officer will be empowered/entitled

to pass adjudicating order in Mushok Form 12.13.

In view of the above, it can clearly be discerned that question  of  imposition  of  penalty  arises  only  after  final determination of unpaid/less paid/evaded amount of VAT and

that  is  also,  subject  to  issuance  of  show  cause  notice  and personal hearing of the person concerned.”

“............... As has been observed earlier, Act, 2012 empowers the VAT officer concerned to impose penalty but only after final determination of the evaded amount of VAT or less paid VAT and subject to the procedures as have been prescribed under Rule  65  i.e.  with  the  issuance  of  show  cause  notice  in prescribed form along with personal hearing. Said requirement of law has not been complied with by the officer concerned in the instant case prior to imposition of penalty. In the light of the observations so made by one of the Benches of this Division in PET Industries Ltd. Vs. Commissioner, Customs, Excise and VAT, 61DLR734 “the concerned authority is therefore, duty bound to follow the procedure as laid down in the Act, for each and every action.

In that view of matter, we have no manner of doubt to find that imposing penalty by the respondent concerned under Rule  65(6)  while  making  final  demand  under  Section  73(2) without first issuing a notice in Form Mushok 12.12. asking to show cause to that effect with personal hearing of the petitioner

concern, is an order passed without lawful authority. .........” Said observations and findings are still in operation.

In the present case, claiming evaded amount of VAT to the tune of Tk.47,25,000/- (Taka forty seven lac and twenty five thousand only) the officer concerned issued a demand-cum-show cause notice in exercise of power  as  provided  under  Section  73(1)  of  the  Value  Added  Tax  and Supplementary  Duty  Act,  2012.  In  response  thereof  the  petitioner  duly replied  on  18.01.2022  (Annexure-C-1).  Ultimately,  the  respondent concerned made a final demand of VAT on 19.12.2022 under Section 73(2) of the said Act (Annexure-F); at the same time had imposed penalty of Tk.14,83,442.49/- (Taka fourteen lac eighty three thousand four hundred forty two and forty nine poisa only).

In view of the above observations and finding given by this Bench in connection with writ petition No.14643 of 2022 as well as considering the facts and the position of law, we have no manner of doubt to find that imposing  penalty  of  Tk.14,83,442.49/-  (Taka  fourteen  lac  eighty  three thousand  four  hundred  forty  two  and  forty  nine  poisa  only)  by  the respondent concerned under Section 65(6) while making final demand of Tk.14,83,442.49/- (Taka fourteen lac eighty three thousand four hundred forty two and forty nine poisa only) under Section 73(2) of the Act, 2012 without first issuing a notice in Form Mushok 12.12 asking to show cause to that effect with personal hearing of the petitioner concern so far it relates to imposition of penalty, are liable to be struck down for having been issued issuing without lawful authority and hence, of no legal effect.

In the result, this Rule is made absolute.

The impugned order dated 19.12.2022 passed under Nothi No.4bÑ/H (12) 203/ j§pL g¡y¢L/J−um H¾V¡lfË¡CSz/pxcx/2021/8465 by the respondent No.2 so far it relates to imposition of penalty of Tk.14,83,442.49/- under Section 85(1)(X) of the VAT and Supplementary Duty Act, 2012 (Annexure-F) is hereby declared to have been passed without lawful authority and hence, of no legal effect.

There will be no order as to costs.

Communicate the judgment and order to the respondents concerned at once.

Muhammad Mahbub Ul Islam, J:

                     I agree.

Montu (B.O)