DIFFERENT PENAL PROVISIONS UNDER THE VAT ACT’2003:

Section 22A. – Penalty for false claim of ITC or ITR. (Rule 135A)
 Where any registered dealer has claimed ITC/ ITR for a period without entering into a valid
transaction of purchase with another registered dealer in West Bengal, resulting in claim of
a higher amount of ITC/ ITR than is admissible to him.
 Quantum of penalty –
a) If the dealer admits in writing and pays the full amount of tax involved in such ineligible
claim, alongwith interest thereon within 1 month.  25 % of inadmissible ITC/ ITR.
b) In all other cases. 150 % of inadmissible ITC/ ITR.
 No penalty can be imposed under this section if action taken u/s 22(3) or where penalty
imposed u/s 96, and vice versa.
 Separate proceedings independent of any scrutiny, verification, audit, assessment, appeal,
revision or review for such period.
 Show cause notice is to be served in Form No. 66 specifying a date of hearing not less than
45 days from the date of issue of such notice.
 After giving the dealer a proper opportunity of being heard, penalty may be imposed by an
order in writing.
 Demand notice in Form No. 67 is to be served with the direction to make payment of the
imposed penalty within the specified date and to produce the receipted challan as proof of
payment.
 Valid w.e.f. 01.09.2011.

Section 22B. – Penalty for issue of tax invoice without sale or without delivery of goods.
(Rule 135B)
 Where any registered dealer has issued tax invoice to another registered dealer in any
period, without entering into a valid transaction of sale of goods, or without effecting any
consequent delivery of goods.
 Quantum of penalty –
a) If the dealer admits in writing and pays the full amount of tax involved in the tax invoices
issued by him for such fake transactions within 1 month.  125 % of the amount of tax
involved.
b) In all other cases. 250 % of the amount of tax
involved.
 No penalty can be imposed under this section if action taken u/s 22(3) for the same facts.
 Separate proceedings independent of any scrutiny, verification, audit, assessment, appeal,
revision or review for such period.
 Show cause notice is to be served in Form No. 66 specifying a date of hearing not less than
45 days from the date of issue of such notice.
 After giving the dealer a proper opportunity of being heard, penalty may be imposed by an
order in writing.
  Demand notice in Form No. 67 is to be served with the direction to make payment of the
imposed penalty within the specified date and to produce the receipted challan as proof of
payment.
 Valid w.e.f. 01.09.2011.

Section 23(4). – Penalty on dealer for failure to get registration. (Rule 8)

 Where a dealer, who is required to get himself registered u/s 23(1), fails to make an
application for registration within the time allowed u/s 23(2), without any reasonable
cause.
 The minimum amount of penalty is Rs. 500 and the maximum amount is Rs. 1000 for each
month of default.
 No penalty can be imposed under this section if prosecution u/s 93(2) has been initiated for
the same facts.
 No penal measure may be taken if the dealer has applied for registration under the
amnesty scheme u/s 24A within 31.07.2015. (w.e.f. 01.04.2015)
 Show cause notice is to be served in Form No. 4 specifying a date of hearing ordinarily not
less than 15 days from the date of issue of such notice.
 After giving the dealer a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem fit and proper, by an order in writing.
 Demand notice in Form No. 5 is to be served with the direction to make payment of the
imposed penalty within the specified date, not less than 20 days from the date of service of
such notice and to produce the receipted challan as proof of payment.

Section 25(2). – Penalty on transporter for failure to get enrolment. (Rule 18)
 Where a transporter, carrier or transporting agent, who is required to get himself enrolled
u/s 25(1), fails to make an application for enrolment, or for fresh issue of enrolment
certificate, or for amendment of enrolment certificate, within the prescribed time, without
any reasonable cause.
 The penalty so imposed will be a sum not exceeding Rs. 1000 for each month of default.
 Show cause notice is to be served in Form No. 4 specifying a date of hearing ordinarily not
less than 15 days from the date of issue of such notice.
 After giving the transporter, carrier or transporting agent a proper opportunity of being
heard, such amount of penalty may be imposed as may be deem fit and proper, by an order
in writing.
 Demand notice in Form No. 5 is to be served with the direction to make payment of the
imposed penalty within the specified date, not less than 20 days from the date of service of
such notice and to produce the receipted challan as proof of payment.

Section 27E. – Penalty for contravention of the provisions of sections 27A, 27B, 27C or 27D.

(Rule 14)
 Where a registered dealer fails to furnish the information as referred to in –
 Section 27A – information regarding change of business, or
 Section 27B – information regarding transfer of business, or
 Section 27C – information regarding partial transfer of business, or
  Section 27D – declaration in respect of the manager or other officers,

Within such time as may be prescribed, without any reasonable cause.

 The penalty so imposed will be a sum not exceeding Rs. 5000.

 Show cause notice is to be served in Form No. 8 specifying a date of hearing ordinarily not
less than 15 days from the date of issue of such notice.
 After giving the dealer a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem fit and proper, by an order in writing.
 Demand notice in Form No. 9 is to be served with the direction to make payment of the
imposed penalty within the specified date, not less than 20 days from the date of service of
such notice and to produce the receipted challan as proof of payment.

Section 30C. – Penalty for non-furnishing of information or furnishing of incorrect

information u/s 30B. (Rule 133)
 Where a registered dealer has –
 failed to furnish information in respect of transfer of goods otherwise than by way of
sale in West Bengal as required u/s 30B, or
 upon verification of the statement furnished by a dealer u/s 30B, it is revealed that –
o the particulars furnished in the statement are not correct or complete, or
o the goods so transferred have not been properly accounted for by the dealer or his
agent, or
o the agent of such dealer is not traceable or non-existent at the address given, or
o the agent to whom the goods have been transferred denies any knowledge of it, or
o the goods have not been transported by the transporter named in such statement.
 The amount of penalty that can be imposed shall not be less than 15 % but not exceeding
25 % of the value of the goods so claimed to have transferred otherwise than by way of sale
in West Bengal.
 If penalty is imposed under this section for concealment of any sale with an intent to evade
payment of tax thereon in respect of any period, such sale shall be excluded in determining
the turnover of sales in respect of such period for the purpose of imposition of penalty, if
any, u/s 96(1).
 Show cause notice is to be served in Form No. 4 specifying a date of hearing ordinarily not
less than 15 days from the date of issue of such notice.
 After giving the dealer a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem fit and proper, by an order in writing.
 Demand notice in Form No. 5 is to be served with the direction to make payment of the
imposed penalty within 15 days from the date of service of such notice and to produce the
receipted challan as proof of payment.

Section 30E. – Penalty for failure to furnish statements, accounts, audit reports or
declarations. (Rule 45)
 Where a registered dealer fails to submit any of the statements, accounts, audit reports or
declarations, as the case may be, as required u/s 30E(1), u/s 30E(1A) or u/s 30E(1B), within
the prescribed date and without any reasonable cause.
  The penalty so imposed will be a sum not exceeding Rs. 5000 for each default.
 Show cause notice is to be served in Form No. 8 specifying a date of hearing ordinarily not
less than 15 days from the date of issue of such notice.
 After giving the dealer a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem fit and proper, by an order in writing.
 Demand notice in Form No. 9 is to be served with the direction to make payment of the
imposed penalty within the specified date, not less than 20 days from the date of service of
such notice and to produce the receipted challan as proof of payment.

Section 31(2). – Penalty for making payment by any other means other than electronic
means. (Rule 43)
 Where a registered dealer, who is required to make payment of net tax or any other tax,
interest, penalty or late fee electronically u/s 31(1), makes such payment by any other
means.
 The penalty so imposed will be a sum not exceeding Rs. 1000 for each such payment.
 Rule 43 limits the penalty amount to the extent not exceeding Rs. 300 only for each such
manual payment.
 The Commissioner may waive such penalty if it is proved that the circumstances under
which the dealer has made the payment other than by electronic means was beyond his
control.
 Show cause notice is to be served in Form No. 4P specifying a date of hearing ordinarily not
less than 20 days from the date of issue of such notice.
 After giving the dealer a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem fit and proper, by an order in writing.
 Demand notice in Form No. 5P is to be served with the direction to make payment of the
imposed penalty within the specified date, not less than 20 days from the date of service of
such notice and to produce the receipted challan as proof of payment.

Section 39(4). – Penalty for failure to deposit the amount of tax collected illegally.
(Rule 134)
 Where a dealer is in default in depositing the amount of tax collected in contravention of
the provisions u/s 39(1) in accordance with the provisions u/s 39(2).
 The penalty so imposed will be a sum not less than the amount of tax so collected, but not
exceeding twice the amount of tax collected by such dealer.
 Show cause notice is to be served in Form No. 4 specifying a date of hearing ordinarily not
less than 20 days from the date of issue of such notice.
 After giving the dealer a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem fit, by an order in writing.
 Demand notice in Form No. 5 is to be served with the direction to make payment of the
imposed penalty within the specified date, not less than 20 days from the date of service of
such notice and to produce the receipted challan as proof of payment.

Section 40(5). – Penalty on persons for non-deduction of tax at source from the payments
to contractors. (Rule 49)
  Where any person while making payment of any sum to any dealer, for execution of a
works contract within West Bengal, contravenes the provisions u/s 40(1), u/s 40(2) or u/s
40(3), he shall be personally liable for such contravention.
 The penalty so imposed will be a sum not exceeding twice the amount of tax required to be
deducted and deposited by him.
 Show cause notice is to be served in Form No. 4 specifying a date of hearing ordinarily not
less than 20 days from the date of service of such notice.
 After giving the person a proper opportunity of being heard, such amount of penalty may
be imposed as may be deem just and reasonable, by an order in writing.
 Demand notice in Form No. 5 is to be served with the direction to make payment of the
imposed penalty within the specified date and to produce the receipted challan as proof of
payment.

Section 45(2). – Penalty on provisional assessment. (Rule 55)

 Where a registered dealer required to furnish return for a period u/s 32(1), fails to furnish
such return within the prescribed date, or furnishes such return without the payment of net
tax, interest and late fee relating to such return, he may be assessed provisionally for such
return period u/s 45.
 In a provisional assessment, in addition to the assessment of net tax and the determination
of interest payable for such return period, a penalty may be imposed.
 The amount of penalty so imposed will be a sum not exceeding twice the amount of net tax
so assessed or the unpaid amount of net tax, as the case may be.
 An order making provisional assessment u/s 45(2) shall be passed, determining the amount
of net tax payable for such period and imposing penalty wherever applicable.
 A notice in Form No. 24 is to be served, intimating the dealer of such provisional
assessment, determination of tax and interest and imposition of penalty, if any. A date is to
be specified, not less than 15 days from the date of issue of such notice, by which the
dealer shall remove the reasons warranting such provisional assessment.
 No separate demand notice is required to be served. Where upon receipt of the notice the
dealer fails to remove the reasons for such provisional assessment within the date specified
in such notice, the very notice shall automatically be converted into a notice of demand on
expiry of such date.
 The notice in Form 24 shall specify another date, being not less than 15 days from the date
given to the dealer for removal of the reasons behind such provisional assessment, within
which the dealer is to make payment and produce proof of such payment in the event of
conversion of Form No. 24 into a notice of demand.

Section 46(2). – Penalty for defaulting in furnishing return or payment of net tax within the
prescribed date. (Rule 59)
 Omitted w.e.f. 01.04.2012.
No penalty can be imposed u/s 46(2).

Section 65. – Penalty for non-issue or improper issue of tax invoice, invoice, cash memo or
bill. (Rule 93)
  Where a registered dealer or any other dealer contravenes the provisions u/s 64.
 The amount of penalty will be a sum equal to double the amount of tax which could have
been levied in respect of the unsupported sales or Rs. 10000, whichever is greater.
 The Commissioner may exempt such dealer from payment of penalty or may impose such
lesser amount as he deems fit and proper, if such dealer proves, to the satisfaction of the
Commissioner, that he deals exclusively in goods specified in Schedule A, sales of which are
declared tax free u/s 21.
 Show cause notice is to be served in Form No. 4 specifying a date of hearing ordinarily not
less than 15 days from the date of service of such notice.
 After giving the dealer a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem fit and proper, by an order in writing.
 Demand notice in Form No. 5 is to be served with the direction to make payment of the
imposed penalty within the specified date, not less than 15 days from the date of service of
such notice and to produce the receipted challan as proof of payment.

Section 66AA. – Penalty for non-maintenance or non-production of accounts, documents,

etc. (Rule 93A)
 Where a dealer –
 has not maintained accounts or documents for ascertaining the net tax liability for a
period, or
 has refused or has failed, without reasonable cause, to produce such accounts or
documents as are required to be produced u/s 66, or in a proceeding for verification of
return u/s 42, or for audit u/s 43, or for special audit u/s 43A, or for assessment u/s 46
or u/s 48, or in appeal, revision or review or in a proceeding for imposition of penalty
under the Act., or
 has not provided the required facilities to access to his accounts or documents
maintained in electronic form for examination for the purposes of this Act.
 The penalty so imposed will be a sum of Rs. 10,000 for each such occasion.
 Show cause notice is to be served in Form No. 4 specifying a date of hearing ordinarily not
less than 15 days from the date of service of such notice.
 After giving the dealer a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem fit and proper, by an order in writing.
 Demand notice in Form No. 5 is to be served with the direction to make payment of the
imposed penalty within the specified date, not less than 15 days from the date of service of
such notice and to produce the receipted challan as proof of payment.

Section 77. – Penalty for transporting goods in contravention of section 73 or section 81.
(Rule 125)
 Where any goods have been seized from any transporter, carrier, transporting agent or any
other person u/s 76.
 The sum of penalty that may be imposed –

Sl. No. Description of seized goods Rate of penalty

1. The goods in respect of sale of which the rate of 15 % of the fair market value
tax leviable u/s 16(2) does not exceed 4 % of such seized goods
 2. The goods in respect of sale of which the rate of 25 % of the fair market value
tax leviable u/s 16(2) exceeds 4 % but does not of such seized goods
exceed 15 %
3. The goods in respect of sale of which the rate of 40 % of the fair market value
tax leviable u/s 16(2) exceeds 15 % of such seized goods
4. The goods seized are raw jute 20 % of the fair market value
of such seized goods
 Where any goods have been seized, but there is only clerical errors in the forms prescribed
u/s 73 or u/s 81, and there is no material discrepancy in the description of goods or the
quantity or weight or value disclosed in such forms, the penalty amount may be an amount
equivalent to a sum of 5 % of the fair market value of such seized goods or Rs. 25,000,
whichever is lower.
 No penalty can be imposed under this section if prosecution u/s 93(1)(i) has been initiated
for the same facts.
 Show cause notice is to be served in Form No. 60 specifying a date of hearing ordinarily not
less than 15 days from the date of service of such notice.
 At the request of the person upon whom such notice was served, the requirement of
allowing of 15 days time to show cause may be waived.
 After giving the person a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem fit and proper, by passing a reasoned order in writing.
 Demand notice in Form No. 61 is to be served with the direction to make payment of the
imposed penalty within the specified date, and to produce the receipted challan as proof of
payment and also to take delivery of the seized goods by the date specified in such notice.

Section 78. – Penalty for delivery of the seized goods from the custody of the transporter or
person to the consignee or the owner thereof in contravention of section 76.
(Rule 126)
 Where a transporter, carrier or transporting agent from whom goods have been seized u/s
76(1) or any person from whom goods have been seized u/s 76(2), at his option taken
custody of such seized goods and thereafter contravenes the provisions of section 76 by
delivering such seized goods to any person including the consignee or owner of such seized
goods, without the prior permission of the Commissioner.
 The penalty amount will be a sum not exceeding 25 % of the market value of such seized
goods in West Bengal.
 Show cause notice is to be served in Form No. 62 specifying a date of hearing ordinarily not
less than 15 days from the date of issue of such notice.
 At the request of the person or transporter upon whom such notice was served, the
requirement of allowing of 15 days time to show cause may be waived.
 After giving the person a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem fit and proper, by passing a reasoned order in writing.
 Demand notice in Form No. 63 is to be served with the direction to make payment of the
imposed penalty within the specified date, and to produce the receipted challan as proof of
payment.

Section 79. – Penalty for transportation of goods in contravention of section 73 when goods
transported are not available. (Rule 127)
  Where the goods are, or have been, transported by a dealer, casual dealer, transporter,
carrier or transporting agent or any other person in contravention of restrictions and
conditions prescribed u/s 73 and such goods are not available for seizure u/s 76(1).
 The penalty amount will be a sum not exceeding 25 % of the market value of such goods.
 Show cause notice is to be served in Form No. 62 specifying a date of hearing ordinarily not
less than 15 days from the date of issue of such notice.
 At the request of the person or transporter upon whom such notice was served, the
requirement of allowing of 15 days time to show cause may be waived.
 After giving the person a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem fit and proper, by passing a reasoned order in writing.
 Demand notice in Form No. 63 is to be served with the direction to make payment of the
imposed penalty within the specified date, and to produce the receipted challan as proof of
payment.

Section 80(6). – Penalty for transportation of goods in contravention of section 80, where
the goods enters into West Bengal and is bound for any place outside West
Bengal. (Rule 128)
 Where a goods vehicle transporting any taxable goods enters into West Bengal and is bound
for any place outside West Bengal, contravenes the restrictions and conditions as prescribed
u/s 80.
 The penalty amount will be a sum not exceeding 25 % of the value of the goods so
transported.
 Show cause notice is to be served in Form No. 64 specifying a date of hearing ordinarily not
less than 15 days from the date of service of such notice.
 At the request of the transporter or the person-in-charge of goods vehicle such date of
hearing may be advanced to any date that suits such person.
 After giving the person a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem fit and proper, by passing a reasoned order in writing.
 Demand notice in Form No. 65 is to be served with the direction to make payment of the
imposed penalty within the specified date, being not earlier than 15 days from the date of
service of such notice, and to produce the receipted challan as proof of payment.

Section 96(1). – Penalty for concealment of sales, purchase, contractual transfer price, or
for furnishing incorrect particulars of sales, purchase or CTP in return, or for
claiming excess amount of ITC or ITR. (Rule 135)
 Where –
 A dealer or casual dealer has concealed any sales or purchases or contractual transfer
price, as the case may be, or any particulars thereof, or
 A dealer, who is required to furnish return u/s 32(1), has furnished incorrect statement of
his turnover of sales or purchases or CTP in the return furnished by him, or
 Any registered dealer has claimed excess amount of ITC/ ITR but has not reversed the
same to the extent of his disentitlement,

with the intention to reduce the amount of net tax or any other tax payable by him.
  The penalty amount will be a sum not exceeding twice the amount of tax which would have
been avoided if such concealed sales or purchases, etc. Or particulars thereof were not taken
into account, or such incorrect statement of turnover of sales or purchase, etc. Or particulars
thereof were accepted as correct or claim of excess ITC/ ITR were not detected, as the case
may be, in making an assessment or passing any order upon appeal, revision or review under
the Act.
 Separate proceedings independent of any scrutiny, verification, audit, assessment, appeal,
revision or review for such period.
 Show cause notice is to be served in Form No. 66 specifying a date of hearing ordinarily not
less than 15 days from the date of service of such notice.
 After giving the person a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem fit and reasonable, by passing a reasoned order in writing.
 Demand notice in Form No. 67 is to be served with the direction to make payment of the
imposed penalty within the specified date, being not less than 15 days from the date of issue
of such notice, and to produce the receipted challan as proof of payment.

Section 101. – Penalty for organising exhibition-cum-sale in contravention of section 100.

(Rule 136)
 Where any person organises any exhibition-cum-sale of goods without obtaining a permit in
contravention of the provisions u/s 100.
 The penalty amount will be a sum not exceeding Rs. 50,000.
 Show cause notice is to be served in Form No. 4 specifying a date of hearing ordinarily not
less than 15 days from the date of service of such notice.
 After giving the person a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem fit and reasonable, by passing a reasoned order in writing.
 Demand notice in Form No. 5 is to be served with the direction to make payment of the
imposed penalty within the specified date, being not less than 15 days from the date of issue
of such notice, and to produce the receipted challan as proof of payment.

Section 117. – Penalty for contravention or misuse of provisions of section 116 and rules
made thereunder. (Rule 194)
 Where a registered dealer, enjoying the benefit of deferment or remission or exemption of
payment of tax, contravenes any of the provisions u/s 116 or rules made thereunder, or
furnishes incorrect or fabricated statements or forge any documents with the intention to
deceive the Government.
 The amount of penalty will be a sum not exceeding 100 % of such tax which would have been
payable by such dealer had he not been granted such deferment, remission or exemption of
tax.
 Show cause notice is to be served in Form No. 80 specifying a date of hearing ordinarily not
less than 15 days from the date of service of such notice.
 After giving the person a proper opportunity of being heard, such amount of penalty may be
imposed as may be deem just and reasonable, by passing a reasoned order in writing.
 Demand notice in Form No. 81 is to be served with the direction to make payment of the
imposed penalty within the specified date, and to produce the receipted challan as proof of
payment.