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TMI Blog2004 (8) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Sales Tax Officer). the amount of the tax already paid by the appellant and that arrived at on fresh assessment, as penalty. In the original petition, the appellant sought for a writ of certiorari quashing exhibit P2 and a declaration that section 17(5A) of the Act is unconstitutional as it is violative of the fundamental rights guaranteed under articles 14 and 19 of the Constitution. The learned single Judge who heard the above original petition along with other connected cases, disposed of the same on April 7, 2003 by a common judgment upholding the constitutional validity of section 17(5A) of the Act and specifying certain guidelines to be followed in imposing penalty under the impugned provision. Feeling aggrieved by the above judgment of the learned single Judge, the appellant has preferred this writ appeal under section 5 of the Kerala High Court Act. Section 17(5A) of the Act was newly inserted in the statute book by Act No. 14 of 1998 with effect from April 1, 1998. The said provision reads: (5A). Where on reopening of an assessment completed under sub-section (4), in respect of any dealer, it is found that the amount of tax, if any, paid by such dealer is less t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider necessary and after taking into account all relevant materials gathered by it. Of course, the best judgment assessment shall be done after affording the assessee a reasonable opportunity of being heard including the opportunity to prove the correctness or completeness of the return where such return was filed by the assessee. Section 17(4) of the Act, however, prescribes a method of assessment different from the one prescribed under section 17(1), (2) and (3) of the Act. Section 17(4) permits certain specified classes of dealers to submit return along with the statements prescribed, which facility is comparable with the freedom given to assessees under taxation statutes to file self-assessment returns. Sub-section (4) of section 17 mandates that notwithstanding anything to the contrary contained in sub-sections (3) and (4A), the assessing authority shall accept the return for any year, the assessment relating to which has not been completed along with the statements prescribed, which are in accordance with the provisions of the Act and the Rules made thereunder, submitted by any dealer, whose total turnover specified in the return submitted by him for the year for whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer concerned to direct that person(s) who commit(s) the offences prescribed in clauses (a) to (h) of the said provision, shall pay, by way of penalty, an amount not exceeding twice the amount of sales tax or other amount evaded or sought to be evaded, where it is practicable to quantify the evasion or an amount not exceeding ten thousand rupees in any other case. According to the appellant, the penalty under section 17(5A) which is three times of the difference in tax is arbitrary and unconscionable. Again, while section 45A gives discretion to the authorities under the Act to impose or not to impose the penalty, the element of discretion is absent in proceedings under section 17(5A). In proceedings initiated under section 45A, even if the authorities are to impose penalty, they are vested with the discretion to impose a lesser amount than the maximum prescribed under that provision. But the penalty provision under section 17(5A) is automatic and mandatory in nature. The authorities have no discretion and they are left with no option but to impose penalty on the assessee at the rate prescribed therein. According to the appellant, the authorities should have the discretion, bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly a self-assessment . But in the case of those assessees who do not come within the specified categories of dealers as also those who do not opt for the assessment under section 17(4) of the Act, it is the responsibility of the assessing officer to scrutinise the returns filed by the assessees, compare the figures declared with reference to the book-results by scrutiny of the books of account, and to complete the assessment in accordance with the statutory provisions by issuing notice under section 17(3) containing proposals for assessment even by rejecting the turnover declared and claims made by the assessees; and to make a proper assessment in contradistinction to the assessment under section 17(4), which is done without adjudication of the claims made by the assessees. As rightly observed by the learned single Judge, the department would be completing assessment under section 17(4) based on the return of the assessee and supporting declarations, at the risk and mercy of the assessee s honesty. When the dealer is assessed on the basis of the return filed by him, the statute which relieves the assessee from the burden of satisfying the assessing authority that the return and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n therein can be dealt with separately in the matter of imposition of penalty also so as to protect the vulnerable part of the statutory provision and to prevent recurrence of tax evasion. That object is sought to be achieved by subsection (5A) of section 17. Assessees who choose to file returns under section 17(4) cannot be equated with those class of assessees who are subjected to the regular method of assessment. It is well-settled that there is no constitutional inhibition in treating unequals differently and dealing with them under different provisions of the same statute. Appellant has contended that the assessing authorities are not conferred with discretionary powers in the matter of imposition of penalty under section 17(5A) and hence the impugned provision is arbitrary. We find no merit in this submission. A dealer-friendly provision like section 17(4) can operate smoothly and without loss to the revenue if only the assessee concerned commits no breach of trust. Taking advantage of the fact that the authorities are expected to scrutinise only a small percentage of the returns filed under section 17(4) the assessees are likely to file false returns to defraud the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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