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TMI Blog2014 (11) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods by the petitioner to SIDCO in respect of the above three assessment years, which however did not find a place in the returns filed and the books of accounts. After confronting with the incriminating circumstances, the petitioner was mulcted with penalty under section 45A of the KGST Act to the tune of Rs. 1,25,452, Rs. 56,532 and Rs. 11,140 for the above three assessment years as borne by exhibits P1 to P3 orders respectively. Though the petitioner filed statutory revision petitions before the concerned authority, interference was declined and the revision petitions were dismissed as per exhibit P7 common order; aggrieved of which, a second revision petition was filed. Because of the coercive proceedings pursued in the meanwhile, the petitioner was constrained to approach this court by filing W.P. (C) No. 25144 of 2003, which was disposed of as per exhibit P10 judgment, directing to pass final orders in the revision petition preferred before the first respondent, who in turn was directed also to consider whether imposition of punishment under section 45A would be justified, the petitioner having already been mulcted with the penalty of "thrice the tax amount" sought to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 17(5A) was pursuant to "reopening of the assessment" completed under section 17(4), in view of suppression detected later; as a result of which, the penalty prescribed as "three times" the tax difference, was mandatory. Accordingly, exhibit P9 order was set aside and the penalty ordered as per exhibits P4 and P5 in respect of the years 1998-99 and 1999-2000, fixing the same as "three times" the tax effect was restored. However, in respect of the year 2000-01, since the turnover was below the taxable limit, suo motu proposal for the said year was dropped and the assessing authority was directed to re-compute the penalty under section 17(5A) for the years 1998-99 and 1999-2000 at "thrice the tax difference" in accordance with law, in tune with the revised assessment based on the appellate orders. The case of the petitioner is that, the petitioner has accepted exhibit P11 verdict and is having absolutely no dispute as to the liability to pay the penalty at three times, as prescribed under the statute and in fact has cleared the said amount as well; while the challenge is only with regard to exhibits P1 to P3 orders passed by the third respondent, which stand finalized as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (5A), vide exhibits P4 to P6 orders. Though the first revisional authority reduced the liability to an amount equal to the tax in respect of the years 1998-99 and 1999-2000, cancelling the penalty in respect of 2000-01 for not having even the minimum turnover to suffer tax liability, the same was "suo motu" varied by the first respondent by passing exhibit P11, invoking the power under section 37, restoring the penalty to "three times" under section 17(5A) in respect of 1998-99 and 1999-2000, while dropping the suo motu proposal in respect of the year 2000-01, since even the added/enhanced turnover did not result in any taxable event. After having imposed such maximum punishment, the self same offence is not liable to be reckoned again for imposing the penalty under section 45A, which amounts to "double jeopardy" and hence is sought to be intercepted. Reliance is sought to be placed on the decision rendered by this court in M.K. Pushparanjini, Chikku's Wood Crafts v. Sales Tax Officer [2004] 138 STC 302 (Ker); [2003] 11 KTR 527 (Ker) and in Surajmal Parsuram Todi v. Commissioner of Income-tax [1996] 222 ITR 691 (Gauhati). It is also contended that the "general provision" (secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Act or the Rules made thereunder; or (f) after purchasing any goods in respect of which he has made a declaration under proviso to sub-section (3) of section 5, has failed to make use of the goods for the declared purpose; or (g) has acted in contravention of any of the provisions of this Act or any rule made thereunder, for the contravention of which no express provision for payment of penalty or for punishment is made by this Act; (h) or has abetted the commission of any of the above offences; Such authority or officer may direct that such person 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. Explanation I.-The burden of proving that any person is not liable to the penalty under this section shall be on such person. Explanation II.For the purposes of this sub-section the expression 'assessing authority' includes any officer not below the rank of a Sales Tax Officer specified by the Government in this behalf by notification in the Gazette. (2) No order under sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of such difference". In other words, it has been stated in explicit terms, giving no room for ambiguity, that no other course is available for the assessing authority, but to follow the specific mandate as given in the statute. This is for the obvious reason that a dealer, opting for assessment under section 17(4) constitutes a separate class on whom the assessing authority reposes some confidence and completes the assessment by accepting the returns and statements filed in support thereof. This category of assessee cannot be equated to other assessees, whose assessments are to be completed on the basis of long drawn process of assessments, after detailed scrutiny of returns and accounts, casting a more heavy burden of work and duty upon the assessing authority. Later, if the confidence reposed in the former class of assessees is proved to be incorrect, because of subsequent turn of events, which is solely attributable to the assessees' conduct, such assessees have necessarily to pay for it and suffer the consequence. This is with a view to see that such assessees do not make any bogus claim by filing untrue returns, availing of the benefit of simplified assessments under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a proceeding is "quasi-criminal" in nature. Whether the assessee was conscious enough of the act that was being pursued, gathers significance in the said circumstance, which in turn is being analysed and assessed to sustain the punishment to be imposed. It is with this intent, that some flexibility is loaded in the provision itself, giving some "discretion" to the authorities concerned, as to see whether the punishment has to be imposed as contained under section 45A of the KGST Act (or section 67 of the KVAT Act), where the specific stipulation is that the authority "may" and not "shall". It is by virtue of the said "discretion" conferred under the provision itself, that the authority has to analyse the actual facts and figures before imposing such penalty under section 45A of the KGST Act, to see whether the assessee has to be mulcted with punishment and if so, to what extent, which may go up to "twice" the tax effect. Unlike this, in the case of former category of assessees, who opt for simplified assessment under section 17(4) and then lose the game, pursuant to the detection of incriminating circumstances, they have to be dealt with a firm hand, providing deterrent punish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have a simplified assessment under section 17(4) and later proved to be not worthy of its conduct, has lost the element of mercy, compassion or discretion as to the instance of imposing penalty or as to its quantum, but came to be automatically liable to be covered under section 17(5A), where there is no "mens rea", there is no "discretion" and the penalty is in-built/automatic, to a higher extent of "three times" to the tax effect. Admittedly, the liability under section 17(5A) has become final as per exhibit P11 order and it has been satisfied by the petitioner as well. This being the position, the said assessee is not liable to be punished for the same offence by referring to the general provision of section 45A, as to the failure to maintain proper accounts and non-response to the summons/ notice, which stands on a much lower pedestal. Even though sections 17(5A) and 45A are distinct and different, governing separate situations, the offence involved is measured in greater scales, imposing punishment in a mandatory manner, that too by "three times" of the tax effect in respect of the years 1998-99 and 1999-2000, while leaving the rest in respect of 2000-01 as the turnover di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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