1997 (6) TMI 347 - HC - VAT and Sales Tax

Summary

Issues:
Penalty proceedings under section 29A of the Kerala General Sales Tax Act, 1963 - Imposition of penalty on the revision petitioner - Reduction of penalty by the Tribunal - Contention regarding the imposition of penalty after producing form 25 declaration - Examination of the matter by the Sales Tax Officer (Enquiry) - Bank guarantee furnished by the assessee.

Analysis:
The judgment delivered by the Kerala High Court pertains to penalty proceedings under section 29A of the Kerala General Sales Tax Act, 1963, for the assessment year 1985-86. The revision petitioner, who was transporting 12,000 kgs. of rubber in a lorry, was found to have irregularities by the Sales Tax Inspector. Subsequently, a penalty of Rs. 24,696 was imposed on the revision petitioner under section 29A(4) of the Act. The Appellate Assistant Commissioner upheld the penalty, which was later reduced by the Tribunal by half of the imposed amount. The revision petitioner contended that the Tribunal erred in sustaining the penalty despite producing a form 25 declaration to prove that he was not the last purchaser of the goods, as per a previous court decision.

The Court referred to a previous decision stating that the officer must positively find an attempt to evade tax under the Act to levy a penalty under section 29A(4). While the Tribunal acknowledged an attempt to evade tax, it also noted that the goods transported were raw rubber taxable at the last purchase point within the State and that the petitioner produced a form 25 declaration to prove he was not the last purchaser. The Court agreed with the revision petitioner that if there was no liability to pay tax under the Act, there could be no attempt to evade payment. The Court directed the Sales Tax Officer (Enquiry) to re-examine the matter considering the form 25 declaration and pass final orders within three months, setting aside the previous orders.

The Court allowed the revision petition partly, emphasizing the importance of examining the declaration in form 25 and directed the continuation of the bank guarantee furnished by the assessee until final orders are passed by the Sales Tax Officer (Enquiry). Additionally, a related petition was dismissed, and the Court concluded by partially allowing the petition.