2009 (7) TMI 1165 - HC - VAT and Sales Tax

Penalty imposed under section 45A of the Kerala General Sales Tax Act, 1963 - Held that - After obtaining time from the Departmental authorities for producing the C forms, the petitioner produced photocopies of the C forms on July 15, 2002 and thereafter produced the originals as well. The C forms were actually dated July 9, 2002, which shows that at the time of procurement of the said C forms, the petitioner was admittedly having a copy of the letter dated June 26, 2001 sent by the Assistant Commissioner of Commercial Taxes, Check-post, Mangalore, stating that there was no consignee in the address and that it was only a fictitious person. It was without any regard to the intimation given by the authorities, that the petitioner chose to produce the above C forms, without conducting further enquiry or investigation as to its credibility, thus seeking to sustain the concession availed of, having remitted the reduced tax at the rate of four per cent. It was pursuant to this, that the genuineness of the C forms was got verified by the Department by sending them to their counterpart in Mangalore, whereupon it was categorically revealed that the Departmental authorities in Mangalore had not issued any such C forms. Accordingly, the third respondent arrived at a finding that the course pursued by the petitioner deserved maximum penalty and thus passed exhibit P3 order. It was after considering all the relevant aspects covered by exhibit P3, that the revisional authorities passed exhibit P4 and exhibit P5, upholding and confirming exhibit P3 order. This court does not find any tenable ground to interfere with the findings and reasoning of the Departmental authorities, which is perfectly within the four walls of the law. Appeal dismissed.

Summary

Issues:
Challenge to penalty imposed under section 45A of the Kerala General Sales Tax Act, 1963 upheld by Departmental authorities in revision proceedings.

Analysis:
The petitioner contested the penalty imposed, arguing that they should not be held responsible for the actions of the consignee/buyer in an inter-State sale. The petitioner imported goods, which were sent to a consignee in another State. The Department initiated penalty proceedings after finding discrepancies in the C forms submitted by the petitioner. The Deputy Commissioner confirmed that the consignee was not a registered dealer and had not been issued any C forms. The penalty was imposed for attempting to evade tax by submitting bogus C forms.

The petitioner's revision petitions were dismissed by the second and first respondents, upholding the penalty. The petitioner argued innocence and lack of intent to defraud the Revenue, citing various legal precedents. The Government Pleader emphasized the petitioner's admission of submitting bogus C forms and the lack of due diligence in verifying the consignee's authenticity.

The petitioner's actions, including producing C forms despite knowing the consignee was fictitious, were deemed deliberate by the authorities. The court noted that the petitioner failed to take legal action against the consignee or provide evidence of receiving C forms by post. The court upheld the penalty, finding no grounds for interference based on the facts and circumstances presented.

In conclusion, the court dismissed the writ petition, emphasizing the petitioner's responsibility to verify the authenticity of documents and the lack of grounds for challenging the penalty imposed for attempting to evade tax through fraudulent means.