1998 (7) TMI 653 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of the penalty imposed under Section 28-A(4) of the Karnataka Sales Tax Act, 1957.
2. Compliance with the requirements of Section 28-A(2) of the Act.
3. Jurisdiction and authority of the check-post officer under Section 28-A of the Act.

Issue-wise Detailed Analysis:

1. Legality of the penalty imposed under Section 28-A(4) of the Karnataka Sales Tax Act, 1957:
The petitioner was penalized by the Commercial Tax Officer at the check-post for transporting goods based on an expired export permit. The penalty imposed was Rs. 6,84,000. The petitioner contested this penalty, arguing that the expired export permit did not justify the imposition of a penalty under Section 28-A(4) of the Act. The court examined the relevant provisions of Section 28-A, particularly focusing on the intent of the Legislature to prevent tax evasion through the movement of goods. The court found that the petitioner had complied with the requirements of carrying the necessary documents and that there was no evidence of an attempt to evade tax. The court concluded that the penalty imposed was conjectural and lacked evidentiary support, thus holding the exercise of jurisdiction under Section 28-A(4) as improper.

2. Compliance with the requirements of Section 28-A(2) of the Act:
Section 28-A(2) mandates that the owner or person in charge of a goods vehicle must carry specific documents, including a goods vehicle record, a trip sheet, a log book, and a bill of sale or delivery note. The court noted that in the present case, all necessary documents were produced by the driver before the officer in charge of the check-post. The only issue was the expired export permit. The court emphasized that the petitioner had not violated the conditions mentioned in sub-clause (2) of the Act, as there was no allegation that the driver failed to produce the required documents.

3. Jurisdiction and authority of the check-post officer under Section 28-A of the Act:
The court analyzed the scope of the check-post officer's authority under Section 28-A. It reiterated that the officer's duty was to ascertain whether the prescribed documents accompanied the vehicle and whether the goods had been subjected to tax. The court referenced the judgment in "Automobile Products of India Limited v. State of Karnataka," which clarified that the check-post officer is not authorized to make an assessment or impose penalties beyond ensuring compliance with document requirements. The court held that the check-post officer had exceeded his jurisdiction by penalizing the petitioner for carrying goods with an expired export permit, as this did not constitute an attempt to evade tax.

Conclusion:
The court set aside the orders of the authorities below and quashed the penalty levied on the petitioner. The court awarded costs of Rs. 1,000 to the petitioner. The revision petition was allowed, and the court reaffirmed the correct legal interpretation of Section 28-A, emphasizing the limited jurisdiction of check-post officers to prevent tax evasion and not to penalize for expired permits without evidence of tax evasion.