9911796707
TMI Blog1993 (4) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... by the petitioner for the two lines of business, namely, Ujala and Deepti Road Lines. The transport of Ujala for the distributors is undertaken by the Deepti Road Lines for which separate payments are made to the said concern, apart from the price paid for Ujala. The charges for transport are at a flat rate of 25 paise per bottle stated to be for the purpose of ensuring a uniform price for the product in all places in Kerala. The petitioner is an assessee to incometax and according to him he is keeping separate sets of accounts for the two lines of business for the purpose of claiming depreciation appropriately for the purpose of income-tax. 3.. There was an inspection of the business premises of the petitioner on October 15, 1991 and co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urposely and deliberately, to evade payment of sales tax. The first respondent therefore proposed to impose the maximum penalty of Rs. 16,53,000, the amount of tax evaded being Rs. 8,26,959. 4.. Petitioner sent a detailed reply in which he refuted the allegation of any attempt at evasion of tax. According to him, there is nothing illegal or wrong in carrying on a separate transport business or in undertaking the transport of his goods to the distributors for charges paid by them. He had absolutely no mens rea, so essential to constitute the offences under section 45A. 5.. This reply was not acceptable to the first respondent, who sent a further notice, exhibit P3, informing the petitioner of the materials relied on by him in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent did not refer to the petitioner's plea for transferring the file to the assessing authority or for postponement of the proceedings till after the assessment was completed. 8.. On receipt of the notice, exhibit P5 the petitioner filed this original petition substantially raising two points, namely, one that the proceedings were premature and secondly that there was no case for the respondents on the merits. These contentions were reiterated before me at the time of hearing of the original petition. 9.. The petitioner contends that the proceedings initiated under section 45A are premature because according to him the proceedings under section 45A can be initiated in such circumstances only after the assessment for the year is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the first respondent who has issued the notices, exhibits P1, P3 and P5 is a competent authority to initiate the proceedings cannot be disputed, in the light of explanation II to section 45A(1) as also because of the decision of this Court in Intelligence Officer v. Swamambhal Jewellers [1988] 69 STC 175. The question whether the proceedings under section 45A could be carried on simultaneously or whether they will have to wait the result of the assessment proceedings has again been answered by a Bench of this Court in Intelligence Officer v. Hotel Ambassador [1980] 45 STC 425. The learned Judges observed that it could not be stated that the power of imposing penalty under section 45A could be exercised only in the course of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proceedings initiated as per exhibit P1 should be postponed till after the assessment is completed or that the proceedings should be transferred to the assessing authority. So far as the latter is concerned, the question does not arise in this original petition so long as the first respondent is a competent authority under section 45A. 13.. So far as the merits of the case are concerned, counsel for the petitioner refers to the decisions in State of Madras v. S.G. Jayaraj Nadar Sons [1971] 28 STC 700 (SC), Cement Marketing Co. of India Ltd. v. Assistant Commissioner of Sales Tax [1980] 45 STC 197 (SC) and Kollanur Agencies v. Assistant Commissioner [1991] 80 STC 177 (Ker). In the first of these cases it was pointed out that the penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Sudhi v. Intelligence Officer [1992] 85 STC 337, where this Court observed that the exercise of the power under section 45A should not be illegal, unfair or irrational or unreasonable and that in any case the levy of penalty is not compulsive, but only enabling or permissive. This Court also observed with reference to the meaning of the word "evasion" for the purpose of section 45A that it is not mere default that is made the foundation for penalty. It is contumacious or fraudulent or other blameworthy or objectionable conduct of an assessee in fulfilling the obligation mentioned in section 45A(1) that will attract the levy of penalty. Mens rea or the mental element is embedded in the crucial words "evaded" or "sought to be evaded" occurr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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