2013 (8) TMI 865 - HC - VAT and Sales Tax

Whether the Tribunal has power/jurisdiction to reduce the penalty leviable under section 53(12)(a)(ii) of the Act and whether sufficient cause was shown for not carrying the delivery note in form VAT505 with the consignment - Held that - Appellate Tribunal though confirmed the findings of both the authorities below on the point of default committed by the respondent reduced the penalty as aforementioned and in this backdrop the question as framed by us was raised by learned counsel for the petitioner. In support she placed reliance upon the unreported judgment of this court 2012 (3) TMI 395 - KARNATAKA HIGH COURT (State of Karnataka v. Camellia Clothing Ltd.). In this case the Division Bench was considering the provisions of the Karnataka Sales Tax Act in particular section 28A(4) thereof. From bare perusal of the provisions contained in section 28A(4) of the said Act to the extent it is necessary it is clear that the provisions contained therein are pari materia with the provisions contained in section 53(12)(ii) of the Act. This court after considering the provisions contained therein are parimateria with the provisions contained in section 28A(4) observed that the Tribunal had no jurisdiction to reduce the penalty/tax overlooking the mandatory provisions contained therein. It is further observed that no discretion is vested with the authority and/or the Tribunal so as to exercise discretion in imposing tax/penalty less than two times or more than three times the amount of tax leviable in respect of the goods under transport. - From bare perusal of the provisions contained in section 53(12)(a)(ii) of the Act it is clear that no discretion is vested in the authority or the Appel late Tribunal to either impose less or reduce the penalty less than double the amount of tax leviable under this provision. Having regard to the language employed in this provision it is clear that the provision is mandatory in nature and no discretion is vested in the Commercial Tax Officer or the Appellate Tribunal to levy less or reduce penalty under this provision. - Decided in favour of Revenue.

Summary

Issues:
Jurisdiction of the Tribunal to reduce penalty under section 53(12)(a)(ii) of the Act and sufficiency of cause for not carrying delivery note in form VAT505 with the consignment.

Analysis:
1. The revision petition challenges the Karnataka Appellate Tribunal's order reducing the penalty imposed under section 53(12)(a)(ii) of the Karnataka Value Added Tax Act, 2003. The respondent, a private limited company, was transporting goods without the required delivery note in form VAT505, leading to a penalty of &8377; 2,06,554 imposed by the check-post officer. The Tribunal partly allowed the appeal and reduced the penalty to &8377; 5,000, which is the core issue under consideration.

2. The Tribunal's decision was based on the respondent's failure to carry the prescribed delivery note, as admitted by them in correspondence with the authorities. The law mandates carrying specific documents with goods vehicles, and non-compliance without sufficient cause leads to penalties as per section 53(12)(a)(ii) of the Act. The Tribunal's power to reduce penalties under this provision is a key legal question examined in this case.

3. Section 53(12)(a)(ii) of the Act outlines the penalties for contraventions like not carrying prescribed documents, with penalties not less than double the tax leviable. The Act's provisions are clear that penalties should not be reduced below the prescribed limits, emphasizing the mandatory nature of these penalties. The judgment cites a similar case to support the view that authorities and Tribunals lack discretion in reducing penalties under such provisions.

4. The Court's analysis highlights the importance of adhering to statutory requirements, such as carrying the delivery note in form VAT505 as per the Rules. The respondent's admission of non-compliance and payment of the penalty reinforce the Tribunal's initial penalty imposition. The judgment concludes that the Tribunal's decision to reduce the penalty was not within its jurisdiction, as the law mandates specific penalty amounts for non-compliance without sufficient cause.

5. Ultimately, the Court sets aside the Tribunal's order, emphasizing the mandatory nature of penalty provisions under section 53(12)(a)(ii) of the Act. The decision favors the petitioner, underscoring the legal obligation to adhere to prescribed documentation requirements and the limitations on reducing penalties for non-compliance.