2022 (7) TMI 818 - HC - VAT and Sales Tax

Release of seized goods alongwith vehicle - evasion of tax - respondent submits that the distance between Kottayi to Kanjikode is very little and time delay of five hours is unexplained - HELD THAT - The Intelligence Officer has reason to suspect that multiple transport of goods were done with the documents. The orders passed by the authorities need no interference, except to the extent of penalty. In view of the findings recorded in the orders impugned, it is opined that the penalty imposed be confirmed. The question of quantum of penalty amount alone is examined. Taking into consideration the attendant circumstances the value of goods transported etc., the penalty imposed be reduced by 50% - this Revision Petition is allowed in part and the penalty of Rs.55,880/- imposed by the Intelligence Officer is reduced to Rs.27,940/-.

Summary

Issues: Challenge to order in T.A.(VAT.) No.1004 of 2018 regarding penalty imposed under the Kerala Value Added Tax Act 2003 on a company engaged in the manufacture and sale of MS ingots.

Analysis:
1. The petitioner, a company engaged in manufacturing and selling MS ingots, challenged the penalty imposed under the Kerala Value Added Tax Act 2003. The Intelligence Officer intercepted the transport of goods from Kottayi to Kanjikode due to suspicion of tax evasion. The goods were released on a security deposit of Rs.55,880, which was later confirmed by the Assistant Commissioner of Appeals and the VAT Appellate Tribunal. The petitioner appealed, but the Tribunal upheld the penalty. The revision was filed challenging the Tribunal's decision.

2. The petitioner argued that the KVAT Act does not specify a running time for transactions within the state and that Section 47 does not mandate delivery without a stop at any point. The respondent contended that the short distance between the points and the unexplained five-hour delay justified the suspicion of multiple transports with the same documents. The court reviewed the proceedings and held that the penalty needed no interference except in terms of the amount. Considering the circumstances and the value of goods transported, the court reduced the penalty by 50%, from Rs.55,880 to Rs.27,940.

3. The court found no reason to interfere with the orders passed by the authorities, except regarding the quantum of the penalty. After examining the facts and circumstances, the court decided to reduce the penalty by half, concluding that a penalty of Rs.27,940 was appropriate. The revision petition was partially allowed, and the penalty imposed by the Intelligence Officer was modified accordingly.