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TMI Blog2005 (12) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... oach this court complaining of the validity of the very provision under which the penalty was levied contending that it is an unconstitutional provision, beyond the legislative competence of the State Legislature and therefore the petitioner need not be compelled to avail of the statutory remedy, etc. Initially, after the issue of notice to the respondents on November 9, 2001 the matter had been admitted on April 12, 2002 and certain interim order had also been granted in realisation of penalty amount, the petitioner having deposited 50 per cent of the amount in question, the recovery of balance amount had been stayed by this court. Respondents have entered appearance through Sri. Vedamurthy, learned Government Pleader. Statement of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no proper opportunity was ever been given to the petitioner to demonstrate that the petitioner has not indulged in any activity to evade any liability of sales tax under the Act; that even assuming the respondent No. 2 could have exercised powers under section 28(3A)(iv)(a) of the Act, he has not followed the proper procedure required under this section, i.e., the provision for levy of penalty; that unless the provision is adhered to in accordance with law, the order cannot be sustained. An examination of the proposition notice dated November 9, 2001 (copy at annexure B) issued under section 28(3A)(iv)(a) of the Act indicates that the irregularity noticed by the respondent No. 2 was one of the petitioner not having obtained what is kno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the petitioner is unable to place it along with the reply, etc. The respondent No. 2 on an examination was of the view that the premises had been searched and documents, etc., were seized on credible information and having regard to the background of the petitioner who had been a chronic evader of payment of tax, it was obvious that the petitioner had got into possession unaccounted goods, that the petitioner not having satisfactorily explained by supporting documents, the possession of such large quantity of unaccounted goods, it is inevitable that it should be viewed strictly and maximum penalty should be levied and therefore had passed the order confirming the proposition notice. Sri. Vedamurthy, learned Government Pleader appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of certain goods is unable to satisfactorily explain the valid acquisition of possession of such goods, in the sense that, the goods are tax-paid goods and goods which are not properly accounted for and therefore a presumption that a dealer has indulged in evasion of payment of sales tax and if so the provision which can take care of such conduct on the part of the dealer and also to compensate the State for the loss of the revenue. The provision as it stood at the relevant point of time provided for levy of penalty ranging from 50 per cent to 100 per cent of the amount of sales tax liability evaded. The provision being a penal provision, comes into play only when there is evasion of payment of sales tax and not otherwise. The provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to levy penalty. In the present case, the respondent No. 2 has proceeded to confirm the proposition notice being not satisfied with the explanation offered. Submission of Sri. B.P. Gandhi, learned counsel for the petitioner is that the petitioner had never been given a proper opportunity to explain its case, that the supporting documents had all been seized and therefore it is a clear case of total violation of the requirement of provisions envisaged under the very provision. I also notice that the respondent No. 2 had not in the first instance called upon the petitioner to produce the documents in support of the case and thereupon examine them and then record the status for non-accounting for goods amounts to a possible or definite ..... X X X X Extracts X X X X X X X X Extracts X X X X
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