Penalty u/s 74(4) under kvat act for non-filing of vat 240

aryan (C.A. FINALIST) (35 Points)

05 January 2016  

We have recived a notice from KVAT office stating that you have filed lately form 240 for the financial year 2011-12. so u have to pay penalty of rs 5000/- plus 50 rs perday till the date of Default as per section 74(4) of the kvat act-2003.I want clarification regarding penalty u/s 74(4) of the act .In the book klj pulication the above section says the following:

Any dealer who fails to submit within the time prescribed a copy of the audited statement of accounts,shall be liable to pay a penalty of 5000/- rs and,a furhter penalty of 50/-rs perday for so long as the (failure to submit a copy of the audited statement of accounts)continues,after being given an opportunity of showing cause in writing against such imposition of penalty by the prescribed authority.

we have not filed form 240 for the finanacial year 2011-12 by mistake, last date for submitting form 240 is  31/12/2012.the officers asking for penalty of Rs5000/- & additional penalty of Rs.50 p/day from the beginning of  1/1/2013 to 13/09/2013 on whic date we had filed lately the KVAT return 240, but we have recived notice only on 20/12/2015. 

 my question's are

1]. The VAT liability is nil, as the dealer delas in VAT exempted goods, then wheather at the first instance is penalty leviable because goods being exempt....?

2]. what is the time period for levying the KVAT penalty u/s 74(4)of KVAT Act, because they are levying the penalty after a long period of 3 years.

3] if penalty is leviable & correct, then is it discretionery & be reduced by the commercial tax officer...??

4]. are there any supportin case laws which are relevant in my case...???