TMI Blog2014 (8) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... llegal – revenue being aware of the seizure of gold in the year 2010, and having initiated proceedings for penalty, chose not to take any proceedings against the petitioner for assessment or for failure to take out registration - The penalty proceedings too have been set at naught for reason of the same being barred by limitation - Even otherwise, the income tax authorities having found no sale of gold, being effected by the petitioner, it is a moot question as to whether the commercial tax authorities could ferret out a sale from the facts disclosed - there is absolutely no reason to take any proceedings at this point of time, under the Kerala Value Added Tax Act, 2003 – Decided in favour of Assessee. - WP(C). No. 11000 of 2010 - - - Dated:- 9-7-2014 - K. Vinod Chandran,JJ. For the Petitioner : Sri. P. T. Dinesh, Smt. Rekha Vasudevan For the Respondent : Sri. Bobby John, Sri Jose Joseph ORDER The petitioner, in the writ petitions, a native of Maharashtra, is running a gold re-cycling unit within the State of Kerala, in Kochi. The subject matter of the above writ petition is the seizure of 6280 grams of gold from the business premises of the petitioner, by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me on various dates from the Bank of Nova Scotia. Ext.P13 and P13(a) are receipts issued in lieu of the purchase of bullion made by the Alapat Gold Den (P) Ltd. The gold bars are identified by the numbers, given in such official receipts, which according to the petitioner is clearly printed in the bars. 5. The dealers who issued Ext.P7 to P13 vouchers supported the case of the petitioner and admitted, before the authorities that the gold seized from the premises of the petitioner, belongs to them. The petitioner was entrusted with the same for distillation and conversion even according to such dealers. Petitioner hence approached the Income Tax Department, with an application under section 132B of the Act, for an expeditious conclusion of the proceedings. 6. The petitioner was anxious for the release of the gold, which, admittedly, belonged to other dealers and was entrusted to him for distillation purposes. While so, the Commercial Taxes Department also issued Ext.P20 notice, alleging suppression of sales and threatening penalty for attempt to evade tax at double the tax, so sought to be evaded. The tax evasion was computed on the basis of the exact quantity of the gold sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the petitioner, by the Commercial Taxes Department of the State and only on that ground, found that the gold bars and gold ornaments cannot be released. The Income Tax Department thus retained the gold; only for the purpose of conclusion of the proceedings by the Commercial Taxes Department. 11. Before Court, at the time of hearing, the learned Standing Counsel, Government of India (Taxes), would, on instruction from the Income Tax Department, submit that they have no subsisting claim on the gold now retained with them. The only subsisting claim hence, if at all, is of the Sales Tax Department. 12. The above matter was heard earlier on 13.06.21014 and the matter was adjourned to 17.06.2014 for further hearing. At that point of time, the petitioner was issued with an order under Section 67(1) of the Kerala Value Added Tax Act, 2003 (for short KVAT Act ) wherein the penalty proceedings initiated as per Ext.P2 was concluded, imposing penalty at double the tax attempted to be evaded, which order was produced as Ext.P36 in O.P No.11000/2010. In the context of that, being an order passed subsequently, the petitioner rightly filed a further writ petition numbered as W.P(C) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extension was granted by the Deputy Commissioner. Ext.P18 definitely is beyond the period of limitation, as provided in the proviso. It is also to be noticed that if the State's contention was that the petitioner was involved in sale of gold ornaments, normally the Department would have taken up proceedings for the offence of non-registration of the petitioner as a dealer and for assessment for the years in which the petitioner is deemed to have engaged in sale of gold or gold ornaments. 17. A learned Single Judge of this Court had, when the limitation period was one year, found that the disposal of the penalty proceedings should be made within the time stipulated, from the date of detection of the offence and that the order passed beyond the period of limitation would be illegal, (Sivan Pillai v. Commercial Tax Officer(Audit Assessment)[(2010) 18 KTR 90 (Kerala). 18. In such circumstance for the short but all encompassing ground of limitation, the order Ext.P18 has to be set aside. The proceedings initiated by the Commercial Taxes Department having been set aside, no subsisting claim, can be raised on the gold retained by the Income Tax department, by the State. 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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