1994 (6) TMI 196 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to penalty under section 45A of the Kerala General Sales Tax Act, 1963.

Analysis:
The judgment pertains to a challenge against the imposition of a penalty of Rs. 50,000 under section 45A of the Kerala General Sales Tax Act, 1963, confirmed by the Deputy Commissioner and the Board of Revenue. The petitioner, a dealer in petroleum products, faced discrepancies during a search of his premises, revealing unaccounted transactions. The order imposing the penalty was based on these findings, with the Intelligence Officer determining the tax payable and the penalty amount. The petitioner contended that he did not evade tax and argued against the quantum of penalty imposed.

The petitioner raised contentions regarding stock differences and a pocket notebook found during the search, but all three authorities concluded that the petitioner failed to maintain true and complete accounts, justifying the penalty. The petitioner's argument that he did not evade tax was based on the classification of petroleum products under the Act, asserting that he, as a dealer, did not have tax liability on the sale of such products. The judgment highlighted the distinction between liability for tax on petroleum products based on the seller being an oil company or a dealer.

The judgment emphasized that the penalty imposed was related to an alleged attempt to evade tax, which was deemed inapplicable to the petitioner due to the nature of his business. It was concluded that the petitioner's offense fell under a different clause of section 45A(1) with a maximum penalty of Rs. 5,000. The court noted that the authorities did not consider the appropriate penalty amount, leading to the remittance of the matter for fresh consideration solely on the issue of penalty quantum, limited to Rs. 5,000 as per the latter part of section 45A(1).

In the final decision, the court set aside the previous orders imposing the penalty and directed the Intelligence Officer to reassess the penalty amount within three months, considering only the maximum penalty of Rs. 5,000 under the relevant section. The petitioner's petition was allowed based on the above considerations.