1993 (2) TMI 323 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of penalty levied under section 45A of the Kerala General Sales Tax Act, 1963 for the year 1984-85.
2. Comparison of penalty imposition for the years 1984-85 and 1985-86.
3. Justification of penalty imposition based on different circumstances for each year.

Analysis:
The judgment of the Court addressed the appeal against the penalty imposed under section 45A of the Kerala General Sales Tax Act, 1963 for the year 1984-85. The appellant contested the penalty levied by the Additional Sales Tax Officer, arguing that the amounts received were advances for contracts and not final payments. However, after verification, it was found that the amounts were received purely for the supply of goods, specifically timber sizes for construction of looms. The assessing authority imposed a penalty for wilful attempt to evade tax, which was later affirmed in orders by the Deputy Commissioner of Agricultural Income-tax and Sales tax and the Board of Revenue. The appellant challenged these orders in the original petition.

The learned single Judge initially upheld the penalty, noting that the appellant failed to rectify the omission even after detection and that a newly prepared set of accounts was produced. The Judge found the appellant to be a habitual tax evader, justifying the penalty imposition. The appellant then appealed against this decision.

During the appeal hearing, the appellant argued that since the penalty for the year 1985-86 under similar circumstances was set aside, the penalty for 1984-85 should also be quashed. However, the Court found that the circumstances for the two years were different. For 1984-85, the amounts received were solely for the sale of goods, whereas for 1985-86, they were for a composite contract involving both sale of goods and contract work. The Court emphasized the distinct nature of transactions for each year, justifying the penalty imposition for 1984-85.

In conclusion, the Court dismissed the appeal, stating that the difference in transaction nature for the two years validated the penalty imposition for 1984-85. The judgment of the learned single Judge was upheld, and the writ appeal was deemed without merit and subsequently dismissed.