2018 (8) TMI 1326 - HC - VAT and Sales Tax

Penalties imposed under Sections 47 and 69 of the Kerala Value Added Tax Act, 2003 - detention of goods with vehicle - detention on the ground that there were no documents supporting the transport - whether penalty could be imposed under Sections 47 and 69 of the Act, thus, in effect, mulcting the petitioner/dealer with a double jeopardy on the same defalcation? Held that - Merely because the dealer himself is the owner of the vehicle, it cannot be said that the proceedings under Sections 47 and 69 of the Act cannot be taken simultaneously. The proceedings under Section 47 of the Act is with respect to the defalcation of, supporting documents having not accompanied the transport, thus attempting an evasion of tax due to the Government. The said defalcation warrants imposition of penalty on the dealer at maximum of twice the amount of tax sought to be evaded. The transporter too has a liability to ensure due compliance of the provisions of the Act, and hence, there can be no defect found in the owner of the vehicle being proceeded against for such defalcation. The vehicle had evaded checking by the authorities and as is seen from the records, it had to be chased and intercepted for carrying out the inspection. This clearly brings out the connivance of the dealer in having attempted to evade tax - penalty upheld. The dealer was imposed with a penalty at twice the tax amount sought to be evaded and the security deposit made at the time of detection was converted to penalty - there are no question of law arising from the order impugned. The allegation as to multiple transport for reason of correction carried out in the delivery note is quite plausible. Revision petition disposed off.

Summary

Issues:
1. Imposition of penalties under Sections 47 and 69 of the Kerala Value Added Tax Act, 2003 on the same defalcation.
2. Whether penalty could be imposed under Sections 47 and 69 of the Act, thus resulting in double jeopardy.
3. Proceedings against the owner of a vehicle who is also the dealer.
4. Validity of penalties imposed on inspection of transport with corrections in delivery notes.

Analysis:
1. The judgment addresses the imposition of penalties under Sections 47 and 69 of the Kerala Value Added Tax Act, 2003 on the same defalcation. The case involved penalties imposed on a dealer for defalcation related to transporting taxable goods without supporting documents. The court considered the contention that the dealer was also the owner of the vehicle in question. The court held that proceedings under both sections could be taken simultaneously, as the dealer's dual roles warranted penalties under each section. The court emphasized that the dealer's actions constituted two separate offenses, justifying the imposition of penalties under both sections.

2. The issue of double jeopardy was raised concerning the imposition of penalties under Sections 47 and 69 of the Act. The court clarified that the dealer's ownership of the vehicle did not preclude separate proceedings and penalties under the two sections. The court reasoned that the defalcation of supporting documents and the failure to comply with transporter obligations justified penalties under both sections. The court concluded that the dealer's actions as both a dealer and a transporter warranted the imposition of penalties under Sections 47 and 69, rejecting the argument of double jeopardy.

3. The judgment discussed the proceedings against the owner of a vehicle who was also the dealer. In this case, the dealer's vehicle was involved in transporting taxable goods without proper documentation, leading to penalties under Sections 47 and 69. The court upheld the imposition of penalties on the dealer in his capacity as both the owner of the vehicle and the dealer. The court emphasized that the dealer's ownership of the vehicle did not exempt him from penalties under Section 69, as the obligations of a transporter must be met regardless of ownership.

4. The judgment also addressed the validity of penalties imposed on inspection of transport with corrections in delivery notes. The court considered a case where a dealer was penalized for suspected multiple transports due to corrections in delivery notes. The court found the penalty imposed to be appropriate, given the habitual evasion practices of the dealer. Both appellate authorities ruled against the petitioner, and the court declined to interfere with the penalties imposed, affirming the decision based on the evidence presented.

In conclusion, the judgment clarified the application of penalties under Sections 47 and 69 of the Act, addressing concerns of double jeopardy and the liability of dealers who are also vehicle owners. The court upheld the penalties imposed in the cases discussed, emphasizing the importance of compliance with tax regulations and transporter obligations.