IN THE HIGH COURT OF KERALA AT ERNAKULAM
OP No. 20448 of 2001(H)
1. M/S.G.J.S.FIREWOOD PUNALUR
... Petitioner
Vs
1. SALES TAX OFFICER
... Respondent
For Petitioner :DR.K.B.MUHAMED KUTTY (SR.)
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
Dated :20/03/2007
O R D E R
C.N.RAMACHANDRAN NAIR, J.
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O.P. No. 20448 of 2001
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Dated, this the 20th day of March, 2007
J U D G M E N T
Heard the learned senior counsel appearing for the
petitioner and the learned Government Pleader.
2. Petitioner is challenging Ext.P5 order, whereunder the
Commissioner of Commercial Taxes has sustained penalty levied
on petitioner under Sec. 45 A of the KGST Act for the year 1989-
90. The penalty was levied for suppression of purchase and sales
turnover of rubber wood during the year 1989-90 by the
petitioner. Even though the petitioner under agreement with
various planters, purchased and sold rubber trees, the turnover
accounted was only Rs. 2,78,500/-. However, the Assessing
Officer verified the turnover at the hands of the Planters, who
sold the trees to the petitioner and found that petitioner has
suppressed a turnover of Rs. 18 lakhs. He accordingly levied
penalty at double the amount of tax i.e. Rs. 2,32,376/-. In first
revision, penalty was reduced to Rs. 81,230/- by the Deputy
Commissioner. Even though the petitioner filed second revision
against the said order of the Deputy Commissioner, the
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Commissioner simultaneously initiated proceedings under Sec. 37
of the KGST Act to reverse the order of the Deputy Commissioner
in first revision, as the said order according to him was prejudicial
to the interest of the revenue. Both the revisions filed by the
petitioner and suo moto proceedings initiated under Sec. 37 were
disposed of vide Ext.P5 proceedings, by which, the order of the
Assessing Officer imposing penalty is restored by the
Commissioner. It is against this order; this Original Petition is
filed by the petitioner.
3. The learned counsel for the petitioner contended that this
is not a case of suppression of turnover because penalty levied is
based on assessment, wherein turnover assessed is based on
estimation. The learned Government Pleader on the other hand
contended that revised assessments are sustained in 2nd appeal
by the Tribunal, which is final and petitioner has accepted the
revised assessment by remitting the tax. According to the
learned Government Pleader, suppression is massive and evident
from sales figures admitted by the Planters, from whom the
petitioner purchased the rubber trees under agreement with them
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without disclosing the number of trees. I do not think that there
is any scope for interference with levy of penalty because
suppression is proved beyond doubt through confirmation of
assessment, which is no longer under challenge. In so far as, the
quantum of suppression is concerned, the Assessing Officer
computed turnover based on returns filed by the Planters, though
the Assessing Officer made an addition of 25% towards gross
profit. In any case, since the assessment has become final there
is no scope for interference with the quantum on suppressed
turnover estimated based on which penalty is levied. However, I
find some force in the contention of the learned counsel for the
petitioner that it is not a fit case for levying maximum penalty
because petitioner has without contest remitted the assessed tax
after the Tribunal’s order. More over, the findings of the Deputy
Commissioner is that the suppressed turnover itself to some
extent is the result of estimation, which is a matter of
controversy. Therefore, I modify Ext.P5 by reducing penalty to
the equal amount of tax i.e. from Rs. 2,32,376/- to Rs.
1,16,188/-. However, reduction is granted on condition that the
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petitioner clears the arrears of tax on or before 15/05/2007. If
petitioner does not make payment by then the reduction granted
will stand cancelled. Since there was Amnesty benefit during
pendency of this OP, interest on the reduced amount is also
reduced by 50%, provided, if the entire arrears are paid with
interest at the above rate on or before 15/05/2007. If payment
is not made as above, waiver of interest granted will also stand
vacated.
This Original Petition is disposed of as above.
(C.N.RAMACHANDRAN NAIR, JUDGE.)
jg