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TMI Blog2002 (10) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... tax subject certain conditions. The appellant was given a declaration under form No. 18 of the Kerala General Sales Tax Rules, 1963 and it has to sell the products manufactured using the said raw materials, so as to attract sales tax under the KGST Act or the CST Act. In other words, the products manufactured using raw materials purchased paying 4 per cent tax on the strength of form No. 18 declaration shall not be transferred on consignment or branch transfer basis outside the State. Such transfer not being a sale will not be exigible to tax. The appellant-company has several branches outside the State and therefore, was transferring finished products to those branches according to the market trend without paying sales tax. The company chose to give declarations under form No. 18 and purchased raw materials paying only 4 per cent tax between December, 1982 and March, 1983. During the relevant accounting year, the appellant effected the following transactions: Sales within Kerala: Rs. 123.33 lakhs Inter-State sale: Rs. 247.97 lakhs Transfer to branches outside Kerala: Rs. 1,697.89 lakhs. 3.. From the above figures, it can be seen that substantial part of the products was transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 45A. Therefore, it is submitted, in any view of the matter, the imposition of the maximum penalty under the said section is arbitrary and unjust. Therefore, it is submitted, even assuming the appellant was liable to tax, the imposition of penalty was unwarranted on the facts of the case. 5.. Learned Government Pleader, on the other hand, would point out that the appellant is a corporate giant. It knew very well that substantial part of the produced goods was being transferred to other States on branch transfer basis and, therefore, it could not honour the declaration under form No. 18. So, knowing fully well that it cannot stick to the conditions in the declaration, the company gave the declaration and evaded paying tax to the selling dealer which resulted in payment of tax by the seller to the Government at a lower rate. 6.. The learned single Judge has dealt with elaborately all the contentions urged on behalf of the appellant and dismissed the original petition. The point to be decided is whether the learned single Judge went wrong in doing so. It is true that a purchasing dealer is not liable to pay any tax to Government under section 5(3) and (7) as it stood ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt will definitely be covered by the said provision. Further, the case on hand will be covered by section 45A(1)(g) also. By giving a wrong declaration in form No. 18 or by acting in violation of the said declaration, the appellant has infringed the provisions of the Act and Rules. For this reason also, it is liable to penalty. The learned counsel's contention that since the appellant was not liable to pay any tax to the Government, it could not be accused of tax evasion, is plainly untenable. The word "evasion" is nowhere defined in the Act. So, we must go by the dictionary meaning. "Evasion" means the act or process of finding a way of not doing something that is legally or morally required to be done. Going by this meaning of the word "evasion", the appellant has definitely evaded paying tax. Section 45A does not say that the evasion by a person responsible to the Government for payment of tax alone will be culpable under the provision. There is nothing in the said section excluding the evasion by a person like the appellant. It is said, the language is an imperfect medium to convey one's thoughts. But, the language employed by the Legislature in the case at hand is in no way am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asing dealer. If the purchaser misrepresents or subsequently misbehaves, the "legislative wrath" falls upon him as section 46(2)(d) of the Act provides for his imprisonment and for fine....'. In view of the above decision the first contention of the petitioner that purchasing dealer cannot be imposed with penalty even though lesser tax was paid only on the basis of his declaration, cannot be accepted merely because liability to pay tax to the Government is on the selling dealer." 8.. The next contention of the appellant is that even assuming there is evasion of tax, there is no mens rea and therefore, it is not liable to be subjected to penalty. It is trite law that the proceeding to impose penalty is quasi-criminal and the contumacious conduct of the person evading tax is necessary to impose penalty under the Act. In other words, the mere commission of the offence need not automatically be visited by a penalty. But, the Board of Revenue has dealt with this aspect in detail and the relevant portion of the order of the Board of Revenue has been quoted by the learned single Judge. We find that the competent authority has adverted to all the relevant aspects and has found that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g with its decision. Lord Hailsham. L.C. has said that two reasonable persons can perfectly reasonably come to opposite conclusions on the same set of facts without forfeiting their title to be regarded as reasonable [In re W. (an infant) 1971 A.C. 682]. Our apex Court has, in U.P. State Financial Corporation v. Gem Cap (India) Pvt. Ltd. (1993) 2 SCC 299 at paragraph 11 in similar words, reiterated the said principle. Therefore, this Court is not justified in interfering with the decision taken by the Board of Revenue in its discretion regarding the quantum of the penalty. 10.. The learned single Judge has also rightly adverted to the aspect regarding the quantum of penalty and held that there is nothing wrong with the decision of the Board of Revenue in this regard warranting interference under article 226 of the Constitution of India. The limits of the power of an Appellate Court are wellsettled. Unless it is shown that the learned single Judge clearly went wrong in declining to interfere with the decision of the Board of Revenue regarding penalty, we are not justified in interfering with it. Lord Goddard, C.J., in Stepney Borough Council v. Joffe (1949) 1 All ER 256 stated: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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