1991 (1) TMI 418 - HC - VAT and Sales Tax

Summary

Issues:
Imposition of penalty under section 29A(4) of the Kerala General Sales Tax Act, 1963 for the assessment year 1988-89 based on the absence of valid documents during the transport of goods by an abkari contractor.

Analysis:
The case involved the imposition of a penalty under section 29A(4) of the Kerala General Sales Tax Act, 1963 on an abkari contractor for transporting goods without valid documents in 1988-89. The Intelligence Officer imposed a penalty of Rs. 42,680, which was reduced to Rs. 21,340 by the Appellate Assistant Commissioner. The Sales Tax Appellate Tribunal found that the goods transported were not supported by relevant documents as per section 29A(2) of the Act but concluded that there was no evidence of an attempt to evade tax. The Tribunal also noted the failure of the assessee to register as a dealer but held that the absence of records alone was not enough to impose a penalty under section 29A(4) of the Act. The Tribunal found no proof of tax evasion and deemed the penalty unjustified (annexure C, January 6, 1990).

The High Court, in its judgment, emphasized that the question of whether there was an attempt to evade tax was a matter of fact. The Court supported the Tribunal's decision that in the absence of evidence proving tax evasion, no penalty should be imposed, even if the goods were transported without the required documents. The Court highlighted that suspicion cannot replace evidence and that the Tribunal's detailed order correctly addressed the issue, stating that the penalty imposed by lower authorities was unwarranted based on the facts. The Court also noted the lack of a definitive finding by the Appellate Assistant Commissioner regarding tax evasion, emphasizing that the absence of valid documents did not automatically imply an intention to evade tax.

Ultimately, the High Court found no error of law in the Tribunal's order and declined to interfere in the revision. The Court dismissed the petition, upholding the Tribunal's decision and confirming that the penalty under section 29A(4) was not applicable in this case due to the lack of evidence of tax evasion during the transportation of goods by the abkari contractor.