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2015 (7) TMI 268 - KARNATAKA HIGH COURT

2015 (7) TMI 268 - KARNATAKA HIGH COURT - TMI - Penalty u/s 53 - Mens Rea - Whether the initiation of suo moto revisional proceedings against the appellant under section 64(1) of Karnataka Value Added Tax Act is erroneous in law and as such, same is liable to be set aside - Held that:- Since the driver did not produce any document pertaining to the goods under transport, the vehicle as well as goods were detained and Goods Consignment Endorsement vide No.GCE-18/10-12 dated 29.07.2010 was issued .....

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0 bags of Pan Parag were to be delivered to M/s.Lovely Enterprises, No.7, G.S.Market, O.T Pete Cross, Bengaluru-53 in which the company has stated that the copy of invoice is with the driver and it continues to be with the driver who was afraid of the inspecting officer and hence he could not speak and satisfy the authorities by producing the bill. Said fax message further requested for early release of the vehicle. All the aforementioned admitted facts clearly reveal that the person in-charge o .....

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f statutory requirement. As the provisions do not anywhere disclose or indicate that the intention to evade tax is necessary for levy of penalty, same cannot be read in section 53 of the Act to find out whether statutory contravention is established or not. Once statutory contravention is established, then section 53(12) is attracted which provides for levy of penalty. - revisional authority is justified in setting aside the order passed by the appellate commissioner and restoring the order pass .....

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t the time of interception, the driver in-charge of the goods vehicle did not produce any documents before the investigation officer. Thereafter physical verification of the goods under transport in the goods vehicle was taken up immediately. On verification it was noticed by the officer that the goods vehicle was carrying 14,61,600 pouches of 1.8 gms each, Pan Parag-Gutkha which was packed in 60 bundles with total weight of 2630.880 kgs. The inspecting officer has valued the goods in the vehicl .....

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to produce any of the documents pertaining to transport of gutkha. At about 5 P.M. on 29.07.2010 appellant company faxed a copy of the invoice bearing No.139 to the office of inspecting officer along with a covering letter dated 30.07.2010 wherein it was mentioned that 240 bags of Pan Parag were to be consigned to M/s.Lovely Enterprises, No.7, G.S.Market, O.T Pete Cross, Bengaluru-53. Subsequently the Managing Director of the appellant company was present in the Department on 30.07.2010 and in h .....

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calling upon the appellant to show cause as to why they should not be imposed penalty under section 53(12) of the Act. Appellant replied the said show cause notice on 30.07.2010 itself. After considering the reply and after hearing the appellant, an order came to be passed by the Commercial Tax Officer under section 53(12) of the Act on 04.08.2010 imposing penalty of ₹ 3,13,075.00ps (amounting to double the amount of tax). Being aggrieved by the said order dated 04.08.2010, appellant file .....

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4(1) of the Act. The Revisional Authority after due notice to the appellant and after hearing the appellant, passed a detailed order as per Annexure-A on 29.04.2013 setting aside the order passed by first appellate authority in KVAT.AP.No.1495/10-11 and consequentially has restored the order passed by the Commissioner, Commercial Tax Officer dated 04.08.2010 imposing penalty of ₹ 3,13,075.00. Order of Revisional authority (Additional Commissioner of Commercial Taxes, Zone-3, Bengaluru is a .....

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ocate appearing on behalf of appellant taking us to the material on record and orders passed by authorities submits that there was no intention on the part of appellant to evade tax inasmuch as tax had already been paid; since threat perception generated in the mind of driver of the vehicle, he could not produce the relevant documents before the inspecting officer though such documents were inside the goods vehicle carrying the goods; however within few hours all the documents were faxed to the .....

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n 64(1) of the Act is bad in the eye of law. 7. Said submissions were opposed by Sri.K.M.Shivoyogiswamy, learned Additional Government Advocate appearing on behalf of respondent. 8. Undisputedly the goods vehicle bearing registration No.KA-40-2300 at about 11.00 A.M. on 29.07.2010 was intercepted by Deputy Commissioner of Commercial Taxes (Vigilance), Bengaluru and said vehicle was carrying Pan Parag-gutkha packed in 60 bundles having total weight of 2630.880 kgs. It is also not in dispute that .....

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The officer valued the goods based on Maximum Retail Price at ₹ 14,61,600/-. Since the driver did not produce any document pertaining to the goods under transport, the vehicle as well as goods were detained and Goods Consignment Endorsement vide No.GCE-18/10-12 dated 29.07.2010 was issued to the driver. It is also not in dispute that one Sri.Rilesh who was calling himself as authorised officer of appellant company came to the spot within half an hour of interception and obviously after get .....

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ues to be with the driver who was afraid of the inspecting officer and hence he could not speak and satisfy the authorities by producing the bill. Said fax message further requested for early release of the vehicle. All the aforementioned admitted facts clearly reveal that the person in-charge of the vehicle or the person who came within half an hour after interception of the vehicle calling himself as authorised officer of appellant company did not produce any record or documents pertaining to .....

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s vehicle. Certain other mandatory requirements are also to be satisfied under section 53 of the Act. In case if the provisions of section 53(2) are contravened, officer in-charge of the check post or any other officer is empowered to levy penalty under section 53(12) of the Act. In the matter on hand, admittedly the documents were not tendered by the person in-charge of the goods vehicle immediately after interception of the vehicle. Hence, departmental officer had to inspect the goods under tr .....

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ional authority. The act of the appellant in not sending records along with the person in-charge of the vehicle along with the goods is a clear violation of clause (b) of sub-section(2) of section 53 of the Act. Under those circumstances revisional authority was fully justified in interfering with the order passed by appellate commissioner which has treated the matter lightly, ignoring the mandatory provisions of law and granted the relief to the assessee on the ground that there was no intentio .....

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