2021 (8) TMI 86 - HC - VAT and Sales Tax

Validity of assessment order - penalty order under Section 53(12) of the KVAT Act - genuineness of the document - valid transit pass present or not - HELD THAT - It is seen that 7 transit passes were obtained by the driver of the vehicles in question from entry check post at Shiradon, Bijapur stating that the goods were in transit from Delhi to Salem through Karnataka. The Commercial Tax Officer had called upon for the confirmation of the details of consigner and consignee and on investigation with the authorities of the Delhi Trade Tax, they confirmed that M/s. Sushil Trading Company was non-existent while registration of M/s. King Sales Corporation was cancelled on 04.08.2014. The petitioner could not dispute the above factual aspect. The petitioner could also not dispute the fact that the description, Brand and value of the actual goods transported did not correspond with the declarations made in the invoice and the lorry receipts. In so far as the contention that the respondent authorities were not empowered to check the goods that were in transit inside the State of Karnataka, it is relevant to note that Section 53 of the KVAT Act is devised to check cases of evasion of tax by erecting check posts or barriers at such places that they deem fit - In the present case, the petitioner being a transporter is deemed to be the owner of the taxable goods and is bound to comply with all the requirements of the Act of 2003. It is not the case of the petitioner that the consignor and the consignee are existent dealers and the consignment itself did not match with the documents. Therefore, there is no reason to doubt the action of the respondents in construing the consignment in question as an attempt to evade the tax. These revision petitions lack merit and are therefore rejected.

Summary

Issues:
1. Challenge to common order imposing penalty under Section 53(12) of the KVAT Act by Karnataka Appellate Tribunal.
2. Dispute regarding transportation of goods from Delhi to Salem through Karnataka.
3. Allegations of using forged documents and evasion of tax.
4. Validity of penalties imposed under Section 53(12) of the KVAT Act.
5. Jurisdiction of authorities to check goods in transit within Karnataka.
6. Discrepancies in consignment details leading to penalty imposition.

Analysis:
1. The revision petitions were filed challenging the order passed by the Karnataka Appellate Tribunal upholding penalties imposed under Section 53(12) of the KVAT Act. The petitioners, transporters involved in different consignments, contested the penalties imposed by the authorities.

2. The first case involved a transporter claiming to carry goods from Delhi to Salem through Karnataka. Authorities suspected the genuineness of documents, leading to penalties. The Tribunal found discrepancies and upheld the penalties, citing lack of genuine documents and mismatched goods details.

3. In another case, goods allegedly transported from Salem to Delhi were intercepted in Bengaluru without proper documentation. The authorities imposed penalties due to discrepancies in consignment details and lack of transit pass, indicating possible tax evasion.

4. The legal counsel for the petitioners argued against the penalties, claiming genuine transactions and challenging the authority's power to levy penalties. However, the government advocate contended that penalties were justified to prevent tax evasion under Section 53 of the KVAT Act.

5. The judgment highlighted the importance of compliance with the KVAT Act for transporters and the authority's power to check goods in transit within Karnataka to prevent tax evasion. The court upheld the penalties imposed by the authorities due to discrepancies and suspected tax evasion.

6. Ultimately, the court found the revision petitions lacking merit and rejected them, affirming the penalties imposed under Section 53(12) of the KVAT Act in the cases involving forged documents, discrepancies in consignment details, and suspected tax evasion.