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TMI Blog2021 (12) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... ions 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 16/2016 O.T. Appeals under KVAT Act. Sl. No. Assessment Year & Date of penalty Order Order of Deputy Commissioner of Commercial Taxes Order of the State Goods & Service Taxes O.T.Appeal No. 1. 2005-06; 10.03.2014 KVAT Revition No.1/2014; 19.08.2014 R1-26320/14 to 26322(A)/14/CT ; 02.11.2017 13/2017 2. 2006-07; 10.03.2014 KVAT Revition No.2/2014; 19.08.2014 R1-26320/14 to 26322(A)/14/CT ; 02.11.2017 14/2017 3. 2007-08; 10.03.2014 KVAT Revition No.3/2014; 19.08.2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturns 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 for safe custody at the residence of Sri, K. Ravindran. Sri Ravindran also admits this in his sworn statement dtd 13-09-2010 in which he stated that before seven months back Smt. T.M. Usha and her husband came to his house in company vehicle and directed him to keep the books of accounts related to Rekha Pharmaceuticals for the years 2000-2001 to 2008-2009 for safe custody. Hence it is evident that the dealer is maintaining parallel set of accounts for the year 2000-2001 out of the regular books of accounts. The suppressed sales turnover as per the recovery is over and above the sales turnover returned before the Commercial Tax Officer, Alathur for the year 2000-2001." 4. The dealer through Annexure-B dated 19.03.2012, contested the penalty proceedings initiated through Annexure-A. The reply of the dealer to the extent required or the legal ground canvassed basing on the reply, is stated hereunder: "I am in receipt of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 of the entire recoveries from the house of Sri. K. Raveendran along with copies of the following documents and records for furnishing detailed objection in the matter." 5. The dealer through Annexure-C dated 28.11.2012, before the Intelligence Officer, further objected to the continuation of the penalty proceedings either on the statement given by Ravindran or the books said to have been seized from the house of Ravindran, by treating the seized books as shadow books maintained by the dealer. "The Intelligence Officer is proceeding against me on the basis of the statement given by Sri. K. Raveendran and one Sri. Krishnakumar. If so I may be given an opportunity to cross examine the said Raveendran and Krishnakumar for ascertaining the correctness of the statement given by them. The sworn statement said to have recorded from Sri. K. Raveendran and Krishnakumari cannot be used against me unless and until a chance is given to cross exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 aggrieved by Annexure-D penalty order filed appeal before the Deputy Commissioner (Appeals), Commercial Taxes, Ernakulam. The Appellate Authority through order in Annexure-E dated 15.10.2014, accepted the argument of the dealer that the levy or imposition of penalty by the Revenue particularly by referring either to the statement and/or of books seized from the residence of K.Ravindran is illegal, unsustainable and these circumstances do not attract to the ingredients warranting imposition of penalty. The dealer admittedly has requested the Primary Authority for affording an opportunity to cross-examine Ravindran before any reliance either on the statement or books recovered from his house is made by the Department. The reason for refusing such a request is already dealt with while dealing with the order in Annexure-D. For brevity, the same is not adverted to once again. 8. The Revenue filed appeal before the Kerala Agricultural Income Tax and Sales Tax Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 for opportunity to cross-examine certain persons and also for furnishing certain documents, the assessing authority passed the penalty orders without affording any such opportunity. The assessing authority had committed the same mistake in this proceeding also. The petitioner has not been afforded a reasonable opportunity to show cause against the penalty proceedings. The impugned penalty orders are set aside with liberty to the respondents to proceed after giving replies to replies against the show cause notices." He prays for setting aside the order of the Tribunal. 10. Mr. Muhammed Raffiq, learned Special Government Pleader (Taxes) contends that the dealer, as a matter of right, is not entitled to cross-examination of a person who has given statement to the Revenue. In the case on hand, the dealer is confused between the statement of Ravindran and the material recovered from the house of Ravindran. According to Mr. Muhammed Raffiq, the pre-assessment show cause not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusion 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 are wrong and if for this purpose the assessee makes an express prayer for cross-examining the wholesale dealers whose accounts formed the sheet-anchor of the notice issued to the assessee, he is undoubtedly entitled to cross-examine such wholesale dealers." 22. We do not, with respect, understand the decision of the Supreme Court, as recognising a right of crossST. examination as an invariable attribute of the requirement of reasonable opportunity under section 17(3) of the Act. We rather understand the rule to have been stated with sufficient elasticity and amplitude as to make the right depend on the terms of the statute, the nature of the proceeding or of the function exercised, the conduct of the party, and the circumstances of the case. We are clear that on the facts disclosed, the petitioner in these revision cases is not entitled to demand a right of cross-examination of Pappachan either as part of the reasonable opportunity under section 17(3) of the Act, or on the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmaceuticals, 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 to the books of account recovered from the house of Ravindran. Variation between the figures shown in the returns filed by the dealer and the details noticed from the books of accounts recovered from the house of Ravindran constituted the basis for penalty proceedings. The reply of the dealer is excerpted above and on material facts and accusations made against the dealer, the dealer has not only denied the veracity of the statement and 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 indiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 cannot completely be said that the Intelligence officer is relying on the books of account alone. It is again a matter of choice and selection, as the context compelled the Intelligence Officer to choose. The penalty is a matter of serious consequence and visits further reopening of assessment etc of the Assessee, for the years for which assessments have been are already complete. The statement or the material, if relied on for any limited purpose in the circumstances of this case, we are of the view that the same is after affording the dealer an opportunity of the cross-examination of Mr.K.Ravindran or we hasten to add the revenue has liberty to use the material available and the intrinsic evidence that could be culled out to proceed against the Dealer. We keep in perspective the dictum of the Full Bench and the case on hand falls within the ambit of the circumstance of the case laid down in MT Thomas case. Hence the present circumstances warrant us to hold the order in Annexure-D as confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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