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2019 (3) TMI 23 - HC - VAT and Sales TaxImposition of penalty u/s 47(6) of the Kerala Value Added Tax Act, 2003 - penalty imposed for the reason of the defect noticed being technical, insofar as the goods being not accompanied with any document in support of the transport from Cochin to Tuticorin - Held that - It cannot be said that the defect was only technical in nature. The goods were declared at the Walayar Check Post and brought to Cochin, the destination as understood by the transporter itself. If the transport had been to Tuticorin, then necessarily, there should have been a transit pass taken from Walayar and surrendered at Amaravila Check Post. It cannot be said that the goods are not saleable commodities - The finding of the Tribunal was that the goods were not notified and not a fast moving saleable item. It was held that Form-8F was uploaded from Cochin only, since the consignment was taken to Cochin for reason of the short-form of the destination having been noted as COK , which actually had to be CJB . It was held by the Tribunal, that it was the mistake of the transporter, since the invoice was issued specifically to M/s.Madurai Tuticorin Express Way Ltd., Tuticorin Road, Project Camp at KM 216, Sinthalakar, Ettavapuram 628902. The findings of the Tribunal cannot be sustained - revision allowed.
Issues:
1. Interpretation of penalty under Section 47(6) of the Kerala Value Added Tax Act, 2003 for a technical defect in goods transport documentation. Analysis: The case involved a dispute regarding the imposition of a penalty under Section 47(6) of the Kerala Value Added Tax Act, 2003. The goods in question were detained at a check post, and it was discovered that there was a technical defect in the documentation related to the transport of the goods from Cochin to Tuticorin. The goods were initially intended to be transported from New Delhi to Tuticorin but were mistakenly taken to Cochin by the transporter. The consignment consisted of electrical devices meant for installation in toll-booths on roads. The assessee argued that the sale was to a specific entity in Tuticorin, but due to an error by the transporter, the goods were diverted to Cochin before being redirected to Tuticorin, where they were detained at a check post. The Tribunal had previously ruled that no penalty was applicable under Section 47(6) of the Act, considering the defect as technical in nature. However, the High Court disagreed with this assessment. It was noted that the goods were declared at a check post en route to Cochin, indicating that the transporter's understanding of the destination was Cochin, not Tuticorin. The Tribunal's finding that the goods were not fast-moving saleable items and were not properly notified was also challenged. The High Court emphasized that the lack of a tax invoice supporting the transport from Cochin to Coimbatore, along with the absence of a transit pass from the entry to the exit check post, indicated potential tax evasion. The Court held that the goods were indeed saleable commodities, and the argument that they were not fast-moving was irrelevant in the context of addressing suspected tax evasion. In conclusion, the High Court set aside the Tribunal's decision, ruling in favor of the Revenue and against the assessee. The Court found that the goods were intended for sale from Kerala to Tamil Nadu, emphasizing the importance of proper documentation and compliance with tax regulations in inter-state transactions. The Order of Tribunal was overturned, and the question of law was resolved in favor of the Revenue. The O.T. Revision was allowed with no costs imposed.
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