2015 (10) TMI 1298 - HC - VAT and Sales Tax

Imposition of penalty under Section 53 (12) - movement of goods in the disguise of movement in the course of export to avoid tax liability - Held that - Invoice dated 07.03.2006 also shows the name of Pepsico India Holdings Private Limited, Gurgaon, Haryana. Thus, the invoice is raised in the name of Company situated in India. However, in one of the columns it is mentioned that export is sought to be made to Riyadh. Therefore, prima facie, the documents which were available at the check-post as also before the Addl. Commissioner who conducted the suo moto proceedings would clearly indicate that the appellant sought to transport goods from Belgaum to Mumbai and the consignee of the goods was M/s. Pepsico India Holdings Private Limited, Gurgoan. In the light of the documents produced by the appellant himself which clearly indicate the names of the consignor and consignee are two Indian companies. - transaction is within the country. Therefore, the argument on behalf of the appellant that the goods were being exported directly by the consignor cannot be countenanced. - Additional Commissioner has rightly recorded the finding of Appellate Authority and restored the penalty imposed in original proceedings. No exception can be taken to the findings recorded and conclusions arrived at by the Additional Commissioner. - Decided against assessee.

Summary

Issues:
1. Imposition of penalty on the appellant during transportation of goods.
2. Appellant challenging the penalty order passed by the Additional Commissioner of Commercial Taxes.
3. Interpretation of Section 64(1) of the KVAT Act regarding revisional powers.

Analysis:
1. The appellant, a manufacturer and exporter of mango pulp, was transporting goods when a penalty of Rs. 2,27,865 was imposed during interception at a check-post. The Commercial Tax Officer confirmed a penalty of Rs. 75,955, which was challenged by the appellant and set aside by the Joint Commissioner of Commercial Taxes. However, the penalty was later restored by the Commercial Tax Department through suo motu proceedings, leading to the current appeal questioning the imposition of penalty.

2. The main contention of the appellant was that the goods were meant for export, as evidenced by documents like the delivery note and invoice. The appellant argued that since the goods were clearly intended for export, the penalty imposed was unjustified. On the other hand, the Additional Government Advocate supported the penalty and sought dismissal of the appeal.

3. The delivery note and invoice indicated the consignor and consignee as Indian companies, suggesting that the transaction was domestic rather than for export. The court found that the documents presented did not support the appellant's claim of exporting goods. Section 64(1) of the KVAT Act empowers the Additional Commissioner to review orders and proceedings, and in this case, the Additional Commissioner appropriately exercised this power to reinstate the penalty after considering the findings of the Appellate Authority.

4. The court upheld the decision of the Additional Commissioner, stating that the appellant's argument regarding exporting goods was not supported by the evidence presented. Therefore, the appeal was dismissed, and the penalty imposed by the Commercial Tax Officer was upheld. The judgment concluded that the substantial question of law raised favored the revenue, leading to the dismissal of the appeal.