TMI Blog2016 (11) TMI 1264X X X X Extracts X X X X X X X X Extracts X X X X ..... a for executing a work under a contract/agreement with Mr.Kumar appears to be probable. However, his conduct in creating a document, in support of his contention, on a stamp paper that was purchased subsequent to the interception would not give the benefit of exculpation. In such view of the matter, it is, therefore, necessary that he be mulcted with penalty, since he was only enjoying the benefit of doubt based on attendant circumstances. We see that it is in such circumstances the learned single Judge has also upheld the order of penalty, but reduced it to ₹ 1,00,000/- based on the reasons and rationale recorded in the judgment, which, we are of the view, are totally justifiable and with sufficient reason and cause. Appeal dismissed - decided against the revenue. - WA No. 1965 of 2016 IN WP(C).22728/2014 - - - Dated:- 26-10-2016 - Thottathil B. Radhakrishnan And Devan Ramachandran, JJ. For the Petitioner : Sri. Mohammed Rafiq For the Respondent : Sri Harisankar V. Menon Smt. Meera V. Menon JUDGMENT Devan Ramachandran, J. This appeal has been filed by the Intelligence Officer and State of Kerala assailing the judgment of the learned single Judge, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orthy or objectionable conduct on the side of the assessee. However, a Bench of this Court in Gentle Joseph Co. v. State of Kerala ((1993) 89 STC 494) considered this issue in specific and held very clearly that the power of the authority in imposing penalty does not confer any uncanalised or unguided power in the statutory authority and it requires the authority to apply its mind to all relevant aspects of the default alleged to have been committed by a dealer. Their Lordships stated the law that the order levying penalty is quasi judicial in character and that it involves exercise of judicial discretion. It was further observed that levy of penalty is not compulsive, but only enabling or permissive. 7. The unequivocal declaration of law on this issue is stated in paragraph 7 of the judgment in Gentle Joseph Co. (supra), which is extracted as under for ease of reference: Penalty can be imposed under Section 29A(4) only if the officer finds that there has been an attempt to evade the tax due under the Act. The other two sections, viz., sections 19 and 45A contain the phrase 'is satisfied'. While interpreting that phrase this Court in Sudhi's case (1992) 85 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter the enquiry, such officer finds that there has been an attempt to evade the tax due under this Act, he shall, by order, impose on the owner of the goods a penalty not exceeding twice the amount of tax attempted to be evaded, as may be estimated by such officer. 10. It is perspicuous that Section 47(6) of the Act authorises the Officer concerned to impose a penalty not exceeding twice the amount of tax, but does not, in any manner, impose an obligation upon such Officer to impose the maximum penalty always. The discretion to impose penalty subject to a maximum of twice the amount of tax obviously gives to the Officer the power to impose such quantum as is warranted in the facts and circumstances of each case. The section does not prescribe a minimum quantum of penalty to be imposed but only mandates that the penalty so imposed would not exceed twice the amount of tax. It is, therefore, axiomatic that the Officers concerned are under a statutory obligation to exercise the discretion vested with them under the Statute in a manner that would answer the tests of fairness and appropriateness based on the culpability of the assessee as has been determined by due process. The bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntered into with a certain Mr.Kumar at Panagara, Malappuram District. The Tribunal has concluded that in the absence of any positive material evidencing that the vehicle was brought to Kerala not for sale or transfer, imposition of penalty was not legally sustainable. 14. The State, therefore, filed O.T.Rev.No.25/2014, which was allowed by a Bench of this Court setting aside the order of the Tribunal and remanding the matter back to the Intelligence Officer enabling the respondent herein to adduce evidence to establish that he had brought the vehicle to Kerala based on an agreement with Mr.Kumar for the purpose of executing the laterite quarrying work. Consequent to the remand, the respondent herein filed objections before the Intelligence Officer against the proposal under Section 47 initiated by him. He specifically contended that he purchased the new vehicle and got it registered with the Assistant Registering Authority, Harur on 25.06.2013. He maintains that he was approached by Mr.Kumar of Malappuram for taking the above excavator on hire. According to him, Mr.Kumar was already in possession of a quarrying permit dated 17.12.2012, issued by the Geologist, Mining and Geology ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t fit to reduce the penalty. It is true that the appellants have contended through out that the action under Section 47 (6) of the Act has been invoked because, at the time when the vehicle was intercepted, while being transported to Kerala, did not have any materials or documents accompanying it to show that it was being brought to Kerala for the purpose of excavation of laterite soil as is claimed. The fact that the vehicle was intercepted at Eruthenpathy, a transit route from Tamil Nadu to Kerala through Ellapattan Koil, not being a route that is being normally used for the purpose of travel from Tamil Nadu to Malappuram, the Intercepting Officer and the competent authority under Section 47(6) came to the conclusion that the respondent was using the normal less preferred bye-route with the deliberate intention to evade tax. The appellants, therefore, contend that in view of sub clause (9) of Section 6 and Section 46 of the Act, a presumption runs in favour of the Revenue that the respondent was trying to evade tax. 19. Though we find considerable force in the contentions of the appellants, we are constrained to hold that, however, the competent authorities have not adverted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oval of the conduct of the respondent in attempting to create documents in this manner, but we are in approval of the opinion of the learned single Judge that this has been done by the respondent only to establish that he had an agreement ante with Mr.Kumar and that the excavator was transported to Kerala only for the purpose of executing the said work. 20. A reading of Section 47(6) ineluctably leads to a conclusion that imposition of penalty can be based only on the establishment of guilt on the part of the assessee in attempting to evade tax. It is, therefore, axiomatic that once the intention to evade tax is established, penalty is to be imposed. The only question is how the discretion regarding the quantum has to be exercised. The Assessing Officer and the Appellate Authorities entered into the findings based on the guilt of the respondent and therefore, imposed the maximum penalty. However, the circumstances that would obviously mitigate the suspicion that was created against the respondent were not considered in its proper perspective and it is, therefore, that the learned single Judge, on a proper examination of all the attendant and related circumstances, decided to red ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
