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TMI Blog2010 (2) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... s under: (i) Whether, in the facts and circumstances of the case of the petitioner, where the assessing authority who passed the original assessment orders under CST Act, 1956 for the years 2000-01 and 2001-02 made speaking orders that inter-State sales of de-oiled rice bran obtained out of KST paid rice bran were eligible for exemption from tax and accordingly exempted the inter-State sales from levy of tax and also as per provisions of section 8(2A) of the CST Act, 1956, the inter-State sales were eligible for exemption from tax, the Karnataka Appellate Tribunal was right and justified in having held that nonpayment of tax by the petitioner on the inter-State sales along with the returns filed was deliberate to evade payment of tax and that therefore the orders passed by the authorities below levying penalty were in accordance with law and justifiable? Whether, in the facts and circumstances of the case of the petitioner and judgment of honourable Supreme Court of India in the case of State of Madras v. S.G. Jayaraj Nadar & Sons [1971] 28 STC 700 that no penalty is leviable on the sales found from the books of account and brought to tax and where the Karnataka Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een transferred to its branch offices outside the State. The turnover of the assessee also included the inter-State sale of de-oiled rice bran and in respect of this part of the turnover, it is the version of the assessee that, the assessee had claimed the transaction being exempted from levy of Central sales tax for the reason that the de-oiled rice bran is to be treated at par with rice bran in terms of the ruling given by this court and further, that rice bran being goods which is subjected to single point levy under the Karnataka Sales Tax Act, a second sale of the rice bran or the de-oiled rice bran within the State of Karnataka being not leviable or not attracting any further sales tax liability, if such goods, which otherwise would not attract the levy of sales tax within the State if it should have been sold within the State of Karnataka, is sold in the course of interState trade that again cannot be subjected to tax under the Central Sales Tax Act, in view of the provisions of section 8(2A) of the Central Sales Tax Act, as in terms of this provision, if a goods is exempted from levy of tax within the State from which the goods are purchased, a like benefit is available un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner should be allowed, the order of penalty is to be set aside on applying the said law to the present set of facts, etc. Appearing on behalf of the respondent-State, submission of Smt. Geetha Menon, learned Additional Government Advocate, is that the assessee cannot claim any bona fide conduct; that the fact of the matter is that the assessee did not pay tax on the inter-State sales turnover; that the so-called claim towards exemption is a non-existent one; that there is no exemption granted in respect of an inter-State sale of de-oiled rice bran; that the whole issue became alive only on an inspection of the premises of the assessee on November 23, 2005 and on unearthing the information from certain books of accounts there; that the assessee does not have bona fides to claim that there was true disclosures or that there was no wilful non-disclosure and in such circumstances, even on reassessment when found justification to levy penalty and that penalty has been affirmed by two authorities, namely, the first appellate authority and the Tribunals; that there is no occasion or justification to interfere with the impugned order in this revision petition and the revision petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es where there was not only disclosure, but payment of taxes. In the present case, it cannot even be said that there is a disclosure by a formal declaration of the same, whether in respect of the very orders that the assessee had claimed or some part as inter-State sale transaction as merely stocks transfer and that was also disallowed. But, more importantly, the assessee, assuming that it had claimed that the turnover was exempted from levy of taxes, a mere claim of that nature does not bail out the assessee on the aspect of bona fides. Merely, by claiming that tax liability is not there, because of some non-existent exemption, which the assessee imagines to suit its convenience and comes up with such a claim is not the same as an existing exemption which the assessee bona fide believed that he was entitled to and had put-forth a claim on such premise and the assessing officer in turn had accepted the same. Such is definitely not the position in the present. A convenient assumption of exemption on the part of an assessee not paying taxes due, cannot partake the place of a bona fide belief and a claim, to relieve the assessee from any consequences in the form of being mulcted with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e premise that a second sales is exempted within the State Act.
Apart from this legal position, particularly, in so far as the penalty is concerned, what is important is the conduct of the assessee and in so far as conduct is concerned, the bona fide are also relevant and attracted. An assessee claiming a non-existing exemption when there is no express exemption granted in respect of the particular goods in terms of section 8A of the Act, cannot be characterised as an assessee acting with any bona fides, as in the first instance, there is no exemption at all under the State enactment.
It is for this reason that we are rejecting the contentions urged by Mr. G. Rabinathan, learned counsel for the petitioner, that a second sale in respect of de-oiled rice bran is exempted from levy of sales tax under the State enactment and therefore we are answering the questions against the assessee-petitioner and in favour of the Revenue to affirm the order passed by the lower authorities. It is the case of the assessee that the first appellate authority granted some provisional relief, which is left undisturbed, otherwise these revision petitions are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X
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