The Supreme Court on Monday imposed a penalty of Rs 4 crore on Dharampal Satyapal Ltd (DSL) — the makers of Rajnigandha paan masala — for flip-flop on undertaking given to the court and delaying court’s time in a tax dispute matter.
A bench of justice Dipak Misra and justice Amitava Roy observed, “The appellants (DSL) on the previous occasion had submitted that the matter be sorted out before the Settlement Commission, but it argued on Monday it requires to be settled by the adjudicating authority as a show cause notice was issued.
“A plea of improper advice is canvassed. Therefore, we impose a cost of Rs 4 crore on the appellants,” the court said.
The court’s order came during the hearing of a 2009 tax dispute matter in which DSL was contesting an alleged Rs 244 crore tax demand with regard to the Central Excise Duty.
After contesting it briefly, the company made an application before the Settlement Commission to settle the issue. However, a settlement could not be achieved. The case went to the Delhi high court, which rejected the company’s petition.
Later, the company approached the SC in 2013 where it secured a stay order against the tax demand. Since then the matter is pending in the top court.