2019 (6) TMI 676 - HC - VAT and Sales Tax

Evasion of tax - imposition of penalty u/s 47(6) of the Kerala Value Added Tax Act, 2003 on the ground that petitioner has failed to disprove the allegation of attempt at evasion of payment of tax - HELD THAT - We notice that the revision petitioner had not taken any such attempt, either for producing or calling for such records, before any of the authorities below. The learned Government Pleader had pointed out that, if the goods had actually crossed the border and brought back, there would have been 'transit pass' issued and surrendered at the Check Post. Since the revision petitioner could not produce any such documents in discharge of their burden, the penalty order which was confirmed by various authorities including the tribunal, cannot be interfered. We do not think that the revision petitioner was successful in discharging their burden to prove before any of the authorities below that, there was no actual attempt at evasion of payment of tax. We do not think that any legal or sustainable grounds are existing to invoke the revisional jurisdiction vested on this Court under Section 63 of the Act. Revision petition dismissed.

Summary

Issues:
1. Challenge against order imposing penalty under Section 47(6) of the Kerala Value Added Tax Act, 2003.
2. Alleged evasion of tax due to transportation discrepancies.
3. Failure to produce necessary documents leading to penalty confirmation.
4. Lack of evidence to disprove evasion of tax allegations.
5. Failure to provide a satisfactory explanation for discrepancies in transportation details.
6. Failure to discharge the burden of proof regarding the evasion of tax.

Analysis:
1. The revision petition challenged an order imposing a penalty under Section 47(6) of the Kerala Value Added Tax Act, 2003. The Tribunal dismissed the appeal and upheld the penalty order issued by the Assistant Commissioner (Appeals)-III, Ernakulam. The petitioner contended that the goods transported were for a specific sale, but discrepancies in documentation raised suspicions of tax evasion.

2. The interception of a vehicle carrying spare parts and lube oil led to suspicions of tax evasion due to discrepancies in the journey details and missing documentation. The Intelligence Officer found the petitioner's explanations unsatisfactory, leading to the conversion of the security deposit into a penalty under Section 47(6) of the Act.

3. The petitioner failed to produce necessary documents as required under the Act, leading to doubts about the legitimacy of the transportation and the invoiced goods. Despite contentions raised before the Assistant Commissioner (Appeals), the penalty order was confirmed due to the lack of convincing evidence.

4. The petitioner's inability to disprove the allegations of tax evasion, coupled with discrepancies in the transportation details and documentation, strengthened the authorities' suspicions. The Tribunal upheld the penalty order, emphasizing the importance of concrete evidence to refute tax evasion claims.

5. Inadequate explanations for discrepancies in the vehicle's route, timing of interception, and missing documentation further fueled suspicions of multiple transportation attempts using the same invoice. The failure to address these discrepancies effectively contributed to the confirmation of the penalty order.

6. The Court found that the revision petitioner did not discharge the burden of proof to demonstrate the absence of tax evasion attempts convincingly. The lack of legal or sustainable grounds to challenge the penalty order led to the dismissal of the revision petition, highlighting the importance of providing concrete evidence to refute allegations of tax evasion.