9911796707
TMI Blog2021 (12) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... books of account relied on by the Revenue but requested an opportunity of cross-examination if the Revenue desires to proceed on the statement of Ravindran or the books of account recovered from the house of Ravindran. The order dated 10.03.2014 in Annexure-D imposes a penalty by completely accepting details noted from the books of account recovered from the house of Ravindran. The broad test in matters of present nature is the nature of the interest affected by the decision, and whether the decision relates to the imposition of a detriment on an individual e.g. penalty, sanction or cancellation, then the requirement to follow minimum procedure while making such decision is required. The paradigm situation in which the duty to act fairly will apply, is where a decision-maker is taking a decision that will or may have an adverse impact on the dealer. Ultimately the right is dependant on nature of the proceeding, or of the function exercised; the conduct of the party and the circumstances of the case. So now we have to examine whether the circumstances of the case are persuasive enough to consider whether the denial of right to cross examine Ravindran has resulted in prejudice to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing tabular statement: S.T.Revisions under KGST Act Sl. No. Assessment Year Date of Assessment Order Order of Deputy Commissioner (Appeals) Kerala Value Added Tax Appellate Tribunal S.T.Rev.No 1. 2000-01; 10.03.2014 AIT/ST/KVAT/LT Appeal No.STA 74/14; 15.10.2014 T.A No.35/2015; 31.07.2015 13/2016 2. 2001-02; 10.03.2014 AIT/ST/KVAT/LT Appeal No.STA 75/14; 15.10.2014 T.A No.36/2015; 31.07.2015 15/2016 3 2002-03; 10.03.2014 AIT/ST/KVAT/LT Appeal No.STA 76/14; 15.10.2014 T.A No.37/2015; 31.07.2015 12/2016 4. 2003-04; 10.03.2014 AIT/ST/KVAT/LT Appeal No.STA 77/14; 15.10.2014 T.A No.38/2015; 31.07.2015 14/2016 5. 2004-05; 10.03.2014 AIT/ST/KVAT/LT Appeal No.STA 78/14; 15.10.2014 T.A No.39/2015; 31.07.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etailed verification consequent to the inspections revealed serious irregularities involving substantial amount of tax evasion and for this reason a summons in Form No.22 was issued calling upon the dealer to produce the Books of Accounts for detailed verification. Subsequently Sri K.Gireesh, Manager appeared on 07- 03-2011 but not produced any books of accounts. It has been stated by Sri. Gireesh, Manager that, the books of accounts might be at the office of the auditor or at Advocate or may be destroyed by the former manager and the remaining books of accounts relating to the business were seized by the commercial Tax authorities on the day of inspection itself, he has nothing to produce before the intelligence Officer and he expressed his willingness for verifying the books of accounts in the presence of him and verification done at his presence. Verification of books of accounts, recoveries along with the monthly returns in Form No.9 revealed stunning case of Max fraud done by the dealer. xx x xxx xxx From the above it is evident that the books of accounts recovered from the house of Sri. K. Ravindranare the parallel set of accounts maintained by the dealer and kept fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven by Sri. K. Raveendran and one Sri. Krishnakumar I.S.. If so I may be given an opportunity to cross examine the said Raveendran for ascertaining the correctness of the statement given by him. The sworn statement said to have recorded from Sri K. Raveendran cannot be used against me unless and until a chance is given to cross examine him in this connection. The law of the land also confers us the right to cross examine the persons and records relied by your good self to arrive such negative inferences against us. Such negative inferences can be arrived against us only after the detailed cross examination of the persons and the records relied by your good self. It is the natural justice and the basic rights of us to cross examine the persons and the records relied by your good self for making allegations. In the circumstances we may state that the notice issued by your good self is not sustainable in the eye of law since it is issued without cross examining the persons and the records relied by your good self. xxx xxx xxx From this it very clear that this is a story fabricated to put me in some unpleasant situation. In this circumstance it is just and proper to issue copies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide a chance for cross examining the persons whom the department has claimed to have given the statements which is being used for proposing the penalty as per the notice. It is a settled position in quasi proceedings that demand for cross examinations cannot be raised as a matter of right by any parties. Here in this case the undersigned has not used the testimony or oral evidence of Sri K.Raveendran and Smt Krishnakumari. S. against Rekha Pharmaceuticals. Pudukode. Palakkad. It has been provided in Indian Evidence Act 1872 that unless a witness has been examined in chief, there arises no question of his cross examination. Order No. IT/IO-III/28/10-11(2000-2001) dated 10-03- 2014 For the reasons stated above, by virtue of the authority conferred upon me U/s 45A (1) of the KGST Act 1963. I hereby impose an amount of ₹ 14.99,967/- (Rupees Fourteen Lakh Ninety Nine Thousand Nine Hundred and Sixty Seven Only) as penalty being double the amount of tax evaded for the year 2000-01 to Smt. T.M. Usha, Propritrix Rekha Pharmaceuticals, Pudukkode, Palakkad. Oct 29, 2021, 12:49 The Penalty shall be paid as per the demand notice attached herewith. 7. The dealer being agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under reference has been recorded. The opportunity in Annexure-A given was for the production of accounts by the dealer. According to Mr.Anil D Nair the dealer has submitted the accounts, returns and the subject enquiry does not relate to the details already filed by the dealer with the Department. The denial of the right to cross-examination of Ravindran and/or imposition of penalty on materials/ books recovered behind the back of the dealer resulted in deviation from the procedure stipulated for conducting enquiry on this behalf, and the orders of penalty suffer from the vice of arbitrariness and is prejudiced. The Tribunal without appreciating the sequence of events examined the request for cross-examination and denial thereon, from all together a different perspective away from minimum requirement of fair play. He refers to and relies on the operative portion of the judgment of this Court in Edakalathur Traders Vs. State of Kerala and another (2004)12 KTR 90 (Ker) which reads as under: O.P No.28293/1999 has been filed to quash the two penalty orders. The main grievance of the petitioner is that though it had submitted replies by against the show cause notices seeking fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he materials relied upon by the sales tax authorities, the manner in which the assessee can rebut those materials and the facts and circumstances of each case. It is difficult to lay down any hard and fast rule of universal application. 21. Adverting to the judgment of the Gujarat High Court in Jayantilal Thakordas's case, it was observed that it did not appear that the assessee had at any time made a specific prayer for cross-examining the party in question. It was made clear that the Supreme Court cannot endorse the extreme position that the right of cross examination in the circumstances noticed, stood completely excluded. Reference was made to Appukutty's case and it was observed that the decision was substantially correct and in consonance with the language of section 17(3) and the proviso thereto (underlining ours). At page 492, the learned Judge observed: Thus on a true interpretation of section 17(3), the proviso thereto and rule 15, the inescapable conclusion would be that the assessee has been given a statutory right to prove the correctness of his return by showing that the materials on the basis of which his return is found to be incorrect or incomplete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the imposition of penalty on the dealer. But exoneration of dealer from the penalty by the appellate authority is unsustainable. In other words, it is argued that the matter ought to have been remitted to the Primary Authority for reconsideration from the stage where it is interdicted, by the Appellate Authority on the ground of denial of request for cross-examination as erroneous. 12. We have taken note of the submissions advanced by the counsel appearing for the parties. The short point for consideration is whether the imposition of penalty subsequent to and by referring to the statement/material/Books recovered on 13.09.2010 from the house of K. Ravindran and in the circumstances of these cases, whether the right of the dealer to cross-examine K.Ravindran is tenable or not. To appreciate the above point, we refer to the circumstances borne out in Annexure A notice dated 12.03.2012. The Revenue has categorized the recoveries of books under the 3 categories: 1) from Mrs.Rekha Pharmaceuticals, Palakkad, 2) from the residence of the proprietrix of the registered dealer, 3) from Mr.K.Ravindran from Palakkad, an employee of the dealer. The analysis in the show-cause notice refers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that there is no prohibition for the Revenue to collect or gather information against the dealer, but any material relied on by the Department must be put to the dealer and if the material is contested, the semblance of fair play and procedure are followed before accepting material gathered behind the back of the dealer as constituting the basis for imposition of penalty. The test here is not only the procedural impropriety but the real prejudice in accepting extraneous and other relevant material constituting the basis for imposing penalty. He argues that M.K Thomas case has not laid down a proposition which bars a request of the dealer either for cross-examination or establishment of material against the dealer with some semblance of reasonableness. 13. We take note of the above argument, and by looking at the order of the penalty, we are persuaded to hold that the Intelligence officer would have done better from the perspective of law and procedure; fairness in action was followed while accepting the material on which penalty proceedings are initiated. Explained further in the case on hand, in the beginning and ending of penalty, is with reference to Mr.K. Ravindran. It can ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
