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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 ..... by the Supreme Court in Maharashtra State Board of Secondary and Higher Secondary Education v. Paritosh Bhupeshkumar Sheth [1984 (7) TMI 355 - SUPREME COURT], when a "special provision" is there, the "general provision" has to be excluded, so as to give way to the former. In the instant case, section 17(5A) is the special provision and section 45A is the general provision, which in turn has to yield to the former. Above all, in fiscal statutes, interpretation has to be given, taking the choice of construction which is favourable to the assessee, as held by the apex court in Commissioner of Income-tax, West Bengal v. Vegetable Products Ltd. [1973 (1) TMI 1 - SUPREME Court] It is declared that, when punishment under section 17(5A) is imposed, further punishment under section 45A in respect of the same offence/ingredients is not correct or proper. - Decided in favor of assessee. - W.P. (C) No. 25579 of 2007 - - - Dated:- 21-5-2012 - RAMACHANDRA MENON P.R., J. For the Appellant : S. Anil Kumar and K.S. Hariharan For the Respondents : Shaj Raj, Government Pleader, P.R. RAMACHANDRA MENON J.- When section 17(5A) of the Kerala General Sales Tax Act specifically prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment and the assessing authority was directed to re-fix the liability in terms of the said order, also directing to verify whether the assessee had taxable minimum for the year 2000-01. Based on the reassessment proceedings originally pursued by the assessing authority pursuant to exhibits P1 to P3 order, the second respondent had found that the assessee was actually liable to pay an amount of ₹ 1,34,676 in respect of the year 1998-99, ₹ 65,238 in respect of the year 1999-2000 and ₹ 26,027 towards the year 2000-01 as per the orders passed under section 19. Based on the said figures, penalty was also simultaneously imposed under section 17(5A), making the assessee to satisfy thrice the amount of tax sought to be evaded, as mandatorily fixed under the statute, thus fixing the liability as ₹ 4,04,028 for the year 1998-99, ₹ 19,05,714 for the year 1999-2000 and ₹ 78,081 for the year 2000-01, vide exhibits P4 to P6 orders passed on April 16, 2003. Being aggrieved of exhibits P4 to P6 orders, the petitioner approached the first revisional authority, when the quantum of penalty was reduced in respect of the years 1998-99 and 1999-2000, makin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent while passing exhibit P12 and hence is under challenge. The respondents have filed a counter-affidavit pointing out that the idea and understanding of the petitioner that once the punishment is imposed under section 17(5A), no further punishment under section 45A can be imposed, is quite wrong and mis-conceived. It is stated that the two different provisions are not overlapping each other and are independent of each other to govern two different situations separately dealt with under the statute. Referring to the materials on record, it is stated that the petitioner, at the time of filing the return and opting to have the simplified assessments under section 17(4), had consciously not included the turn over in respect of the sales of goods to SIDCO in all the three different assessment years and it was only pursuant to the investigation made by the third respondent, that the actual facts and figures were brought to light, which necessitated re-opening of the assessment under section 19. As a natural consequence, the petitioner is stated as liable to be imposed with penalty under section 17(5A), where no question of any discretion or application of mens rea is invol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income-tax, West Bengal v. Vegetable Products Ltd.). From the discussions made above, it is to be noted that, the factum of opting for simplified assessment under section 17(4), the incriminating circumstances brought to light in the course of further investigation necessitating reassessment under section 19 and imposition of punishment under the special provision of section 17(5A) finalised as per exhibit P11 are not under dispute. The dispute is only with regard to the imposition of further punishment under the general provision of section 45A. To understand the scope of section 45A and the circumstance that differentiates the said provision from section 17(5A), it is necessary to have a look into both these provisions which are extracted below: Section 17(5A): (5A) Where on reopening of an assessment completed under subsection (4), in respect of any dealer, it is found that the amount of tax, if any, paid by such dealer is less than the amount of tax which he is liable to pay on such fresh assessment, the assessing authority shall direct such dealer to pay the difference between the amount of tax already paid by him and that arrived at on such fresh assessment, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case to the assessing authority, for reconsideration: Provided that the Deputy Commissioner may admit an application made after the expiry of the said period of thirty days if he is satisfied that the applicant had sufficient cause for not making the application within the said period. (4) An order of the Deputy Commissioner under sub-section (3) shall, subject to the provisions of sub-section (5), be final. (5) The Board of Revenue may, either suo motu or on an application, call for and examine the record of any order passed under subsection (1) or sub-section (3) and make such order as it thinks fit: Provided that the Board of Revenue shall not admit an application made after the expiry of thirty days from the date of receipt by the applicant of the order under sub-section (1) or sub-section (3), as the case may be, unless it is satisfied that the applicant had sufficient cause for not making the application within the said period: Provided further that no order enhancing a penalty or cancelling the waiver of a penalty shall be passed unless the person affected thereby is given an opportunity of being heard in the matter. (5A) An application under sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision , so as to take care of various situations, as contemplated therein, such as non-filing of incorrect returns, non-keeping of the proper books of accounts, non-responding to summons and notices issued by the authorities, etc. The net effect of which is the undue benefit of tax evasion, at the cost of the Revenue. But here, the gravity of the offence committed by the assessee varies from case to case and the consequence resulted, is not equally grave as the situation covered under section 17(5A). That apart, all such instances contemplated under section 45A need not be due to any conscious act on the part of the assessee, so as to make it punishable. In other words, mens rea is relevant in such cases and there is an element of discretion vested with the authority. The necessity to have mens rea to sustain punishment under section 45A had come up for consideration before the apex court in the decision reported in AIR 1961 SC 552 (Kunnathat Thathunni Moopil Nair v. State of Kerala) and it was held that in the absence of mens rea, the penalty imposed under section 45A was not liable to be justified. The same view was followed by the apex court in Kantilal Babulal and Bros. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s v. Sales Tax Officer [2004] 138 STC 302 (Ker); [2003] 11 KTR 527 (Ker), while upholding the constitutional validity of section 17(5A) of the KGST Act. Now the question is whether the punishment imposed upon the petitioner under section 45A of the KGST Act vide exhibit P12 is in respect of the same offence as covered by exhibit P11 order imposing penalty at a higher rate under section 17(5A) and whether the same is sustainable. Admittedly, the orders imposing the penalty under section 45A are in b respect of the circumstances contemplated under sub-clauses (b) and (e) of section 45A, which speak about the failure of the assessee to keep true and complete accounts or as to the failure to comply with all or any of the terms of any notice or summons issued to him by or under the provisions of this Act or the Rules made thereunder. The materials on record reveal that the accounts maintained by the petitioner was not true and complete; which led to rejection of the returns causing re-opening of the assessment, leading to a higher tax effect and the mandatory satisfaction of the higher penalty (three times) under section 17(5A). It is also true that as per the observations in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be interfered with. Reference to a decision rendered by the Gauhati Bench of the High Court of Assam, Surajmal Parsuram Todi v. Commissioner of Income-tax [1996] 222 ITR 691 (Gauhati) is useful, though the same pertains to the provisions under the Income-tax Act. True, it was a case where the penalty proceedings were finalised imposing the penalty under section 271A for not maintaining the books of accounts and also mulcting with further penalty under section 271B for not getting the books of accounts audited. In the said case, the court observed that, the assessee admittedly had not maintained any books of accounts. By virtue of the provisions under the statute, it was not enough for the assessee to have maintained the books of accounts, but had also to see that they were duly audited, so as to satisfy the mandate. Since the assessee had not even maintained the books of accounts, the question of getting the same audited did not arise and hence, the punishment was confined to section 271A alone. Even though the said decision is not squarely applicable to the case in hand, this court finds that some reliance can be placed on the said observations therein as well. The case invo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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