2011 (7) TMI 1065 - HC - VAT and Sales Tax

Whether there is a violation of section 53(12) and minimum penalty of two times of the duty is levied by invoking the provisions of section 53(12)(a)(ii) is correct? Held that - The material on record would clearly shows that admittedly the petitioner has violated the provisions of section 53(12) as the vehicle was not stopped at the check-post and he had travelled 20 kms. thereafter and only after interception, the driver given the explanation that he was taking the goods to the Bangalore city at the instructions of the consignee. Admittedly, the vehicle was not stopped at the check-post and no documents were produced and wherefore, the case of the petitioner in view of the abovesaid admitted fact, the penalty to be imposed would fall within the provisions of section 53(12)(a)(ii) and wherein, it is stated that the amount of penalty imposed shall not exceed three times the amount of tax leviable in respect of the goods under transport. Hence, penalty of two times of duty leviable is imposed in this case and wherefore, the appellate authority and the Appellate Tribunal has taken a lenient view and imposed penalty of two times of duty leviable. Appeal dismissed.

Summary

Issues:
Violation of section 53(2) of the Act leading to imposition of penalty by the Joint Commissioner of Commercial Taxes (Appeals), Bangalore, upheld by the Karnataka Appellate Tribunal.

Analysis:
The petition was filed challenging the order passed by the Karnataka Appellate Tribunal, which confirmed the penalty imposed for violating section 53(2) of the Karnataka Value Added Tax Act, 2003. The goods vehicle, carrying ceramic vitrified tiles for an inter-State sale, was intercepted near Bangalore. The consignee directed the driver to take the vehicle to the city, leading to a violation of the Act. The Joint Commissioner imposed a penalty of two times the duty leviable, which was upheld by the Appellate Tribunal. The petitioner contended that the violation was unintentional and requested a reduction in the penalty, citing section 53(12)(a)(i) which limits the penalty to one and a half times the duty payable.

The petitioner relied on a judgment stating that the levy of penalty is justifiable only if the cause shown for non-production of documents is found to be insufficient. However, the Government Advocate argued that there was an admitted violation of section 53(12), justifying the minimum penalty of two times the duty. The Court carefully considered the arguments and examined the material on record. It was evident that the petitioner had indeed violated the Act by not stopping at the check-post and traveling 20 kms further before interception. As per section 53(12)(a)(ii), the penalty imposed should not exceed three times the tax leviable, thus justifying the penalty of two times the duty leviable.

The Court found that the decision cited by the petitioner's counsel was not applicable to the present case due to the admitted facts of the violation. Therefore, there was no ground to interfere with the order of the Tribunal, and the revision petition was dismissed for lacking merit.