TMI Blog2015 (3) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... fide belief that he would not be treated as the brand name holder in a transaction where he had purchased branded goods from another person, who could also have claimed to be a brand name holder for the purposes of Section 5(2) of the KGST Act. That apart, it is not in dispute that in the returns filed by the petitioner for the assessment year in question, he had declared the entire sales turnover in respect of the sales of moulded plastic furniture effected by him and had also claimed exemption by treating the entire sales as second sales for the purposes of the KGST Act. A mere claim for exemption by an assessee, cannot, in my opinion, be treated at par with a suppression of turnover, for the purposes of attracting the penal provisions under the KGST Act. Neither will the mere claim for exemption make the return an incorrect or untrue return for the purposes of attracting the penal provisions under the KGST Act. In an assessment proceedings that has to follow the filing of a return by an assessee, it is always open to the Assessing authority to consider the claim for exemption made by an assessee and either accept it or reject it for valid reasons. While the petitioner had di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed goods other than tea, which are sold under a trade mark or brand name, the sale by the brand name holder or the trade mark holder within the State would be deemed as the first sale for the purposes of the KGST Act. In the case of the petitioner, the arrangement referred to above had the effect of bringing into existence two persons who could claim to be brand name holders for the purposes of the aforecited provisions under the KGST Act. In other words, both Kaveri Pet and Polyforms (P) Ltd., as well as the petitioner, who had entered into independent agreements with Nilkamal Crates and Containers, and had obtained permission for using the brand name Nilkamal in connection with their respective activities, could validly be referred to as the brand name holders for the purposes of the KGST Act. The issue then arose as to who would be treated as the brand name holder for the purposes of Section 5(2) of the KGST Act in the event of a sale by Kaveri Pet and Polyforms (P) Ltd. to the petitioner, insofar as both the persons were brand name holders. The issue as to the dealer, on whom the tax liability had to be fastened in terms of Section 5(2) of the KGST Act, came to be resolved on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I find that this is a case where it is not in dispute that in the returns filed for the assessment years 2003-04, the petitioner had declared the entire turnover relating to sales of moulded plastic furniture effected by it and had only claimed exemption of the said turnover in the return by stating it to be second sales effected within the State. In other words, this is not a case where the petitioner had chosen to suppress any part of the sales turnover in the returns filed by it for the purposes of attracting the penal provisions under the KGST Act. It is also relevant to note that the issue as to who, among two dealers permitted to use the brand name, is to be the brand name holder for the purposes of Section 5(2) of the KGST Act, and on whom the liability to pay tax on the goods sold under the brand name will rest, has been the subject matter of litigation ever since the introduction of Section 5(2) in the KGST Act with effect from 1998. The judgments of this Court on the issue, span the period from 1998 to 2013 and even against the judgment in the petitioner's c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and complete accounts, does not appeal to me as reasonable on the facts of the instant case. It is also necessary to observe that in Ext.P6 order, the respondent does not advert to any of the contentions or the decisions relied upon by the petitioner to substantiate his contentions regarding the impropriety of imposing penalty. It will be apposite in this connection to refer to the decision of the Supreme Court in E.I.D. Parry (I) Ltd v. Assistant Commissioner of Commercial Taxes and Another - [(2000) 117 STC 457]. The relevant portion of the said judgment is in paragraph 23 which reads as follows: 23. But so far as levy of penalty is concerned, we do not think that the sales tax authorities were justified in levying it. Till the judgment of the Madras High Court, on July 15, 1991, in Perambalur Sugar Mills Ltd. v. State of Tamil Nadu [1992] 86 STC 17, the correct position of law within the State of Tamil Nadu was not free from doubt. Even thereafter, the sales Tax Tribunal had in subsequent orders held that transport subsidy was not includible in the taxable turnover. Such a view was held by the Tribunal till March, 19, 1993. It appears that on bona fide belief that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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