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TMI Blog2018 (12) TMI 1012X X X X Extracts X X X X X X X X Extracts X X X X ..... ntelligence Officer had in attempting to find out the correct figures as per the audited report computed the tax evaded so as to determine the penalty; which is a permissible exercise. We hence leave the assessee to a statutory appeal which if filed within one month from today, shall be deemed to be properly filed in time and considered on merits. Appeal dismissed. - WA. No. 2288 of 2018 - - - Dated:- 3-12-2018 - MR K. VINOD CHANDRAN AND MR ASHOK MENON, JJ. For The Appellant : ADVS. SRI. JOSEPH PRABAKAR AND SRI. RAJESH NAIR For The Respondent : SRI MOHAMMED RAFIQ SR GP JUDGMENT Vinod Chandran, J The short question that arises for consideration in the above appeal is whether the refusal to exercise discretion by the learned Single Judge as against penalty proceedings was proper or not, especially considering the fact that the penalty proceeding taken was under Section 67 of the Kerala Value Added Tax Act, 2003 by the Intelligence Officer when there was a provision under Section 25(3) for the Assessing Officer to itself proceed with the matter and decide on whether there was any willful non-disclosure of material. 2. On facts, it has to be n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67 would necessarily be regulated by a satisfaction entered by the Assessing Officer as to whether the escapement, is due to willful non-disclosure of assessable turnover or not. In the present case, it is pointed out that the audit report was filed by the assessee themselves and hence there could be no willful non-disclosure alleged as against the assessee. True there was no revised return filed as is permissible under Section 42 but however, it is submitted, the mere fact that the revised return was not filed cannot be a reason to impute malafides or willful non-disclosure on the assessee. Reliance is placed on a judgment of this Court in [2018 (3) KLT 468] CTO v. C.R. Varghese wherein, in various instances, this Court had directed revision of returns to be accepted despite the same being beyond the time prescribed. Reliance is also placed on the judgment of this Court reported in 2018 (4) KHC 513 State of Kerala Vs. Joemon Rajan to contend that the Intelligence Officer ought not to have carried out the proceedings and should have merely informed the fact to the Assessing Officer so as to take appropriate proceedings under Section 25. It is the compelling argument of the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t context that it was observed that in cases where the computation of tax evaded is not possible; the Intelligence Officer who detects the offence should not attempt to quantify the tax likely to have been evaded, which is essentially an exercise of estimation on best judgment, which power is exclusively conferred on the assessing authority. Chakkiath Brothers and Canmec Office Technologies was in the context of penalty being imposed on a wrong claim of exemption made by the assessee which the Assessing officer could have interfered with at the time of assessment. The reliance placed in both the aforesaid case was on the decision of the Hon'ble Supreme Court in Sreekrishna Electricals v. State of Tamil Nadu [(2009) 11 SCC 687] . 7. We sitting in Division had distinguished the two regimes and the more onerous obligation on the assessee in the VAT regime to file a correct return, the failure of which would attract Section 67. We extract herein paragraph 10 of Alukka s Jewelr y : The provision for self assessment creates an obligation on the assessee to file a correct return; more onerous than in a regime which mandates a regular assessment. The submission of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever required. It is hence, the assessee has been given a specific opportunity to cure the defects in the return which is detected on audit, by filing a revised return and paying tax in accordance with that revised return. The assessee having not availed of such remedy we can only find that there was an attempt to avoid bringing the aforesaid discrepancies to the notice of the department. 10. The learned Counsel then would rely on C.R. Varghese to contend that in certain instances this Court, this very Division Bench had granted the opportunity to file revised return even when the time for filing such returns had expired. We have to notice the facts in each of the cases which were considered by us in C.R Varghese . In one, the monthly returns were filed by the assessee as provided under the KVAT Act, and audited statement filed as per Section 42 on 30.12.2016. Within a month, on 30.01.2017 Ext.P1 communication was addressed to the Assessing Officer pointing out the discrepancies in the returns and seeking permission to revise the returns. After the said communication, a proceeding was initiated by the Assessing Officer under Section 25(3)threatening reopening of assessment. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the shortfall in the returns. There was no cause for the assessee to have, not sought for a revised return immediately thereafter. It is also to be noticed that the communication at Ext.P3 seeking permission to file revised return was received by the Assessing Officer only on 23.04.2018 by which time, the Intelligence Officer had initiated proceedings under Ext.P2 dated 28.03.2017. On the aforesaid facts we are convinced that there could be no permission granted at this distance of time to file revised returns. The assessee also waited for the proceedings under Section 67 to be concluded, to invoke the extraordinary remedy under Article 226. We hence uphold the judgment of the learned Single Judge which refused to interfere with the penalty proceedings under Article 226 . 13. We also notice that the estimation alleged in the penalty order is with respect to the GP at 60%. We see from the order that the Intelligence Officer states that it is the G.P disclosed and conceded in the return. We have not seen the return nor have we examined or affirmed the said finding of the Intelligence Officer. The assessee would be free to urge such contention before the Appellate Authority an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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