2014 (9) TMI 693 - HC - VAT and Sales Tax

Denial of refund claim - penalty levied under Section 28-A(4) - Whether on the facts and in the circumstances of the case and in law, the Karnataka Appellate Tribunal is right in allowing the Appeals and setting aside the penalty order levied under Section 28-A(4) of the Act by the Check Post Officer - Held that - It is clear that the Tribunal did not consider the appeals in proper perspective and got impressed with the production of the photocopy of Form No.II before the Appellate Authority by the assessee for the first time. Even, the reliance placed on the judgment in N. Subramanya, on the face of it, was misplaced - The assessee, in the present case, chose not to contest the matter before the Officer in-charge of Check Post and they volunteered to pay penalty. In this backdrop, in our opinion, the Tribunal committed a grave error of law in allowing the appeals based on the judgment of this Court in N. Subramanya which has no application to the facts of the present case. The findings of fact and the proposition of law carved out by the Tribunal, in our opinion, are perverse and hence the order of the Tribunal deserves to be set aside. Decided in favour of Revenue.

Summary

Issues:
1. Revision petitions against order setting aside penalty under Section 28-A(4) of the Karnataka Sales Tax Act, 1957.
2. Questions of law raised regarding the Tribunal's decision and reliance on a specific judgment.

Analysis:

Issue 1:
The revision petitions were filed against the order passed by the Karnataka Appellate Tribunal, setting aside the penalty levied under Section 28-A(4) of the Act. The respondent-assessee, a Private Limited Company engaged in the sale of electrical wires, had purchased goods to be delivered in Karnataka but were intercepted during unloading. The Check Post Officer found discrepancies in the documents presented by the assessee, leading to the imposition of a penalty. The First Appellate Authority upheld the penalty, emphasizing the lack of valid documents. However, the Tribunal allowed the appeals based on the submission of a photocopy of Form No.II before the Appellate Authority, citing a previous judgment. The High Court noted that the Tribunal's decision was flawed as the documents required by law were not produced initially, and the Tribunal's reliance on the previous judgment was misplaced.

Issue 2:
The questions of law formulated by the petitioner pertained to the correctness of the Tribunal's decision and its reliance on a specific judgment. The Tribunal's reasoning, as per the High Court, did not consider the case holistically, focusing instead on the belated submission of a photocopy of Form No.II. The High Court highlighted the legal provisions under Section 28-A(2) and (4) of the Act, emphasizing the requirement for valid documents during transportation of goods. The Court found that the Tribunal's decision was erroneous, as the assessee did not contest the matter before the Check Post Officer and voluntarily paid the penalty. Consequently, the High Court ruled in favor of the Revenue, setting aside the Tribunal's order and dismissing the revision petitions.

In conclusion, the High Court's judgment addressed the issues raised in the revision petitions, emphasizing the importance of compliance with legal provisions regarding the transportation of goods and overturning the Tribunal's decision based on misplaced reliance on a previous judgment.