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TMI Blog2008 (2) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 challenged in O.P. No. 23869 of 1999 is the very same order under challenge in O.P. No. 24838 of 1999 because the said order is common for both the petitioners. Since the findings in exhibit P3 are illustrative of the case pertaining to all the petitioners and orders passed in the other cases are on same lines, I proceed to dispose of the cases by considering the challenge against exhibit P3. Counsel appearing for all the petitioners in the connected cases, counsel appearing for the society involved and the Government Pleader are heard. The substance of the allegation by the Intelligence Wing of the Sales Tax Department which investigated and issued penalty orders is as follows. During the relevant years co-operative societies enjoyed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y that all what the society got was one and a half per cent commission from the petitioners for the transactions done by them in the name of the society. Even though the Department established clear case of evasion of tax by the petitioners by using the name of the society and by accounting transactions in the name of the society, some of the petitioners chose to deny the transactions and insisted that the statement of the secretary of the society was inconsistent and not trustworthy. Therefore, after hearing the cases in part, this court by order dated June 29, 2004 directed the present secretary of the society to file a detailed affidavit confirming whether the society had funds for making purchases and if so, to furnish details of the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he society was only to use the name of the society by which the society permitted to evade payment of sales tax. Obviously the society which is no longer in existence was formed for the fraudulent purpose of evasion of tax and even petitioners have no case that society was engaged in any real business. Therefore, I am of the view that the principle laid down by the Supreme Court in McDowell's case [1985] 59 STC 277; [1985] 154 ITR 148 is squarely applicable to the facts of this case and there is no scope for showing any leniency to the petitioners who evaded tax by camouflaging the transactions under cover of the society. The petitioners have, therefore, no escape from liability for penalty under section 45A of the KGST Act and penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has reason to believe that any person was carrying on business in the name of or in association with any other person in whatever capacity or name, such person and the person in whose name the registration certificate, if any, is taken, shall jointly and severally be liable for payment of taxes, penalty or other amounts due under this Act. The above provision therefore casts joint and several liability on the persons involved in joint transactions leading to evasion of tax. In this case the admitted fact is that the society had taken registration under the KGST Act and the society allowed it's members and strangers to carry on business in the name of the society, whereas the business is really carried on by such persons and the conse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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