2009 (1) TMI 825 - HC - VAT and Sales Tax

Summary

Issues involved: Attempted evasion of tax, cancellation of penalty u/s 29A(4) of the Kerala General Sales Tax Act.

Summary:
The High Court of Kerala heard a revision filed by the State against the Sales Tax Appellate Tribunal's order canceling a penalty imposed on the respondent for attempted tax evasion related to a consignment of high-speed diesel. The penalty was based on the detection of goods without proper documents at Thalassery. Despite the assessee later producing documents, the penalty was upheld in previous appeals. However, upon revision, the Court remanded the matter back to the Tribunal, which then canceled the penalty based on the respondent's explanation.

The Government Pleader argued that accounting for the goods after detection does not exempt from penalty. The transaction involved an inter-State purchase of diesel by the respondent, a retail dealer in Mahi, from Hindustan Petroleum Corporation in Elathur. The goods were supposed to be unloaded in Mahi but were found in Thalassery, indicating an attempt to sell outside Mahi for tax evasion purposes. The Court noted Mahi's history as a hub for tax evasion and criticized the facilitation of tax evasion by authorities in Pondicherry.

The respondent claimed the goods were taken to Thalassery due to a valve problem, but the Court found this explanation inadequate. Despite citing a Supreme Court judgment, the Court found no relevance to the present case's facts. Ultimately, the Court allowed the revision, overturning the Tribunal's decision and reinstating the penalty on the respondent for attempted tax evasion.