2013 (3) TMI 278 - HC - VAT and Sales Tax

Penalty under Section 47(6) of the KVAT Act - Goods have reached Feroke without declaring the same at two check posts - as per petitioner the goods having already suffered penalty by Ext.P2, cannot be subjected to proceedings under Section 47(2) once again - Held that - What is relied on by the petitioner is Ext.P1, the Forest pass to contend that what was transported from Virajpet was 20 Tones and that therefore, there was no change in the quantity transported. However, neither in Ext.P2 nor in Ext.P1, is there any mention that the consignment was accompanied by Ext.P1 forest pass. That apart, goods have reached Feroke without declaring the same at two check posts enroute. Admittedly, the value estimated was at Rs.1,37,500/- and Rs.11,100/- was levied as penalty. The value now estimated is Rs.18 Lakhs. This substantial variation in the value and also the suspicious circumstances that were pointed out, create credibility of the case of the respondents and therefore this may not be a case which is fit for interference in a proceedings under Article 226 of the Constitution of India - petitioner can file statutory appeal within three weeks from today that will be entertained by the appellate authority ignoring the delay.

Summary

Issues:
Challenge to penalty under Section 47(6) of the KVAT Act for transporting goods without proper declaration and facing multiple penalties.

Analysis:
The petitioner challenged the penalty levied under Section 47(6) of the KVAT Act amounting to Rs.1,34,330 for transporting a consignment of Ball tamarind from Virajpet to Kottayam. Initially, a penalty of Rs.11,100 was imposed at the Kootupuzha check post, which the petitioner paid. Subsequently, the truck was detained again at Feroke, leading to the issuance of a notice under Section 47(2) of the KVAT Act. The petitioner responded with a reply (Ext.P4) and paid the demanded security (Ext.P5). Despite these actions, another penalty was imposed via Ext.P7, prompting the filing of a writ petition challenging the same.

The petitioner argued that imposing a penalty again under Section 47(2) after already paying a penalty (Ext.P2) is prohibited by Section 47(7) of the KVAT Act. Conversely, the Government Pleader contended that the subsequent penalty was justified due to an increase in the consignment quantity and failure to declare goods at various check posts enroute. The value of the consignment was also significantly higher in the latest estimation, raising suspicions about the credibility of the petitioner's case.

The court acknowledged the prohibition in Section 47(7) against imposing penalties on goods that have already been penalized. However, the court noted discrepancies regarding the forest pass (Ext.P1) and lack of declaration at check posts, along with the substantial increase in the estimated value of the goods. These factors, coupled with suspicious circumstances, led the court to decline interference in the matter under Article 226 of the Constitution of India. The court dismissed the writ petition but directed the petitioner to file a statutory appeal within three weeks, ensuring that the appellate authority would consider the appeal without delay and pass orders on merits.

In conclusion, while acknowledging the legal provisions prohibiting multiple penalties on the same goods, the court emphasized the importance of accurate documentation, proper declarations, and compliance with check post regulations. The judgment underscores the significance of transparency and adherence to statutory requirements in commercial transactions to avoid legal complications and penalties.