9911796707
TMI Blog1996 (3) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1963. 2.. The Intelligence Officer initiated proceedings under section 29A of the Kerala General Sales Tax Act in regard to interception of lorry No. KLZ-5991 at Sales Tax Check-post, Walayar, on January 20, 1987. The lorry was transporting cooling tower materials and components from Madras to Cochin. The check-post authorities were suspicious about the documents accompanying the transport. Notice and subsequent enquiries proceeded. The present petitioners filed replies on the basis of the material, the trial authority (annexure A) imposed penalty in the nature of adjustment towards the security deposit of Rs. 45,540 realised from the petitioner on February 5, 1987, as per the cash receipt. The authority reached the conclusion on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced, (b) the value is seen subsequently written in the delivery note produced and therefore bona fides of the transport and thereby evasion became the basis of suspicion. 4.. In this context the appellate authority recorded that the appellant had produced the certificate of consignee showing the registration number under both the Acts obtained from the assessing authority, Ernakulam. With regard to the addition of the value found in the delivery note, the appellate authority found the difference as regards the use of carbon paper as a routine affair and not a basis for suspicion that prompted the check-post authorities. The authority observed that naturally carbon paper readily available is taken for use and as such the factors do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1. Spares for coolong tower model 372-102 as per attached annexure. Lump sum Lump sum 1,30,000 2. Labour charges for cooling tower dismantling and re-erection after replacement item at SER 1. 19,000 1,49,000 Note: 1. The materials are to be guranteed for its trouble-free operation for 5 years from the date of erection. 2. The dismatling and erection will be arranged by the supplier at their own risk and cost and no respnsiblility whatsoever will be entertained by CSL. Delivery period Supply will be completed within 8-12 weeks (before 30-11-1986) and dismantling/re-erection will be completed before 31-12-1986. Terms of delviery Free delivery at CSL stores. Mode of transport By road preferably through Transport Corporation of India L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the completion of the work and because there is no registration under the Act, the penalty is justifiable as there is an attempt to evade payment of tax. 8.. Considering the situation it would be seen that in a proceeding under section 29A of the Kerala General Sales Tax Act, 1963, the basic requirement that there is or there has been an attempt to evade tax due under the Act is a pre-condition of sustenance of an action for imposition of penalty. The undisputed facts make it abundantly clear that the petitioner transported the goods on the basis of an order, quoted above, from the Cochin Shipyard Ltd. The supply was inter-State. Merely by reason of the fact that the petitioner is not registered, by a process of an inductive leap of rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order placed by the Cochin Shipyard Ltd., reproduced hereinbefore, being dated August 26, 1986, the one which was found at the time of interception on January 18, 1987 as document accompanying the transport. We have already reproduced the contents of the said order hereinbefore. Reading the order, as it would be revealed from the very first two lines thereof, that it is a request to supply the material as per the conditions of purchase on the back-overleaf-conditions Nos. 1 and 2 are general conditions with regard to guarantee of the material in the process of utilisation and operation thereof for a specified period of five years. Secondly the condition also speaks of the arrangement regarding dismantling and erection. It also speak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer to levy tax on such a transfer, in view of the declaration of law in the context by the Supreme Court [1989] 73 STC 370 (Builders Association of India v. Union of India). Therefore even on an alternative assumption of the supply being under the works contract, the proceeding would not get any kind of justification.
For the above reasons the revision case is allowed and consequently the impugned order (annexure C) gets quashed and set aside and in its turn the order dated June 16, 1988 of the Appellate Assistant Commissioner, Agricultural Incometax and Sales Tax, Palakkad (annexure B) in S.T. Appeal No. 150 of 1987 is endorsed and confirmed, whereby the penalty proceedings stand cancelled. Order accordingly.
Petition allowed. X X X X Extracts X X X X X X X X Extracts X X X X
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