2024 (7) TMI 1038 - HC - VAT and Sales Tax

Cancellation of penalty u/s 47 (6) of the Kerala Value Added Tax Act - cancellation of additions made in the assessment order pertaining to the respondent assessee for the assessment year 2012-2013, based on the penalty order passed by the Intelligence Officer - HELD THAT - These OT. Revision Petitions at the instance of the State must necessarily fail. The Appellate Tribunal in the order impugned in these revision petitions clearly finds as a matter of fact that the consignment that was detained was accompanied by valid transport documents such as the invoice and the checkpost declarations in Form 8F. The Tribunal also found that the assessee had immediately after the goods were detained, produced the statutory declarations in Form 16 to demonstrate that the goods that were being transported were for the own use of the assessee. In contrast to this, nothing has been produced before us that would suggest that the assesee was engaged in any trading activity during the assessment year 2012-2013. The finding of the Appellate Tribunal, based on the documents available before it, that there was no intention on the part of the assessee to evade payment of tax is legally sustainable - It is apparent, therefore, that while obtaining the goods from outside the State, the assessee did not get the benefit of a lower rate of tax. Thus, in conclusion, it is that the impugned order of the Tribunal that sets aside the penalty order and assessment order, does not require any interference in these revision petitions. These Revision Petitions fail and are accordingly dismissed.

Summary

Issues:
1. Impugning the cancellation of penalty under Section 47 (6) of the Kerala Value Added Tax Act.
2. Challenging the cancellation of additions made in the assessment order for the assessment year 2012-2013 based on a penalty order.

Analysis:
1. The revision petitions arose from a Tribunal's common order canceling the penalty imposed on the respondent assessee under Section 47 (6) of the KVAT Act. The respondent, engaged in IT Technical Support and Software Development, had not registered under the KVAT Act in 2012-2013. The Intelligence Officer imposed a penalty for alleged tax evasion during transportation of goods. The Appellate Tribunal found the necessary documents were produced, concluding no tax evasion intent. The High Court dismissed the revision petitions, upholding the Tribunal's findings that no evasion was evident.

2. The second issue involved challenging the cancellation of additions made in the assessment order for the same year based on the penalty order. The assessing authority relied on the penalty order to make additions to the assessee's turnover. The Appellate Tribunal, after examining records, found the necessary documents were submitted, indicating goods were for own use, not resale. Consequently, the Tribunal canceled the penalty and set aside the assessment order. The High Court upheld the Tribunal's decision, noting the absence of evidence suggesting trading activity by the assessee in 2012-2013. The Court found the Tribunal's findings legally sustainable, dismissing the revision petitions.

In conclusion, the High Court dismissed the revision petitions, upholding the Tribunal's decisions regarding the cancellation of penalty and additions in the assessment order. The Court found no evidence of tax evasion and supported the Tribunal's findings based on the documents presented. The Court emphasized the lack of trading activity by the assessee during the relevant year and affirmed the Tribunal's decision to set aside the penalty and assessment orders.