JUDGMENT
M. Ramchandran, J.
1. The impact of Section 30B of the Kerala General Sales Tax Act and the procedural
formalities to be observed in the penalty proceedings initiated under Section 45A of the
Kerala General Sales Tax Act are requested to be examined in the present Original
Petition which is field by an assessee under the Sales Tax Act. Petition is engaged
in the proprietary business of dealing in plastic furniture at Valara in Idukki District.
On 16.8.2001, a notice had been issued to him by the Agricultural Income Tax and
Sales Tax Officer, Adimali initiating him that it has come to his notice that few
consignments, sent by M/s. National Flask Industries Ltd., Silvassa and G. Sarma
Corporation, Mumbai in the name of the petitioner during 1999 had not been accounted
by him and therefore, it had been decided to impose penalty under Section 45A of the
K.G.S.T. Act. A copy of the notice is produced as Ext. P1. Petitioner claims that he
had filed objection thereto showing that as regards the consignment of M/s. National
Flask Industries Ltd. the purchase did not materialise as goods were returned since
they were defective, and debit note had been issued to the sellers during August, 1999. In
respect of six consignments which are alleged to have been sent by M/s. Sarma
Corporation valued Rs. 8,53,538/-, the petitioner and taken a stand that he had not
effected any such purchase and had no information about the consignment. He
therefore had required the Sales Tax Officer to give him details of the consignment
and the address of the alleged supplier. The complaint of the petitioner is that ignoring
the above, penalty proceedings have been finalised wherein he is made liable to pay
an amount Rs. 1,97,580/- being double the amount of tax calculated as evaded.
2. The Government Pleader had opposed the allegations and claims of the
petitioner. He had submitted that an opportunity had been given to the petitioner to
respond, but no objection had been received within the time notified and proceedings
were therefore finalised. He also points out that the petitioner has got an effective
remedy by way of revision, and for this reason also, the Original Petition is not entertainable.
3. Advocate Sri. Thanu Pillai, appearing for the petitioner, submits that even if
the explanation was received late, that was very much in the possession of the Officer
before he had finalised the proceedings, and the technical approach never was justified.
He had also heavily relied on the methodology adopted in arriving at the conclusion
that he had evaded tax. The counsel had brought pointed attention to Ext. P7 Circular
No. 19/88 dated 14.12.1988 which governs the modalities in respect of declarations
collected at the check posts. The Government Pleader was right in pointing out that
petitioner has remedy by way of revision, but according to him, the Writ Petition was
filed as there was total arbitrariness.
4. I am of the view that the Original Petition is not to be entertained as the
petitioner can approach the revisional authority to ventilate his grievances. I am sure
that the defence placed will be examined by the revisional authority had appropriate
orders passed. The counsel for the petitioners justified in submitting that the explanation
furnished could not have been abjectly ignored. True, the assessee is expected to
utilise the opportunity with diligence, but nothing prevents the Officer from taking note
of the explanations if they reach him before the final adjudication is attempted.
5. Since the counsel has heavily relies on Ext.P7, Sections 30B and 45A of the Act,
before leaving the matter I feel it is appropriate that the above also be subjected to
examination.
6. The submission is that the first respondent has to oversee the functioning of
the Department ad take earnest effort for a house cleaning programme. According
to the petitioner, he has a right to suggest the above as he has become a victim due to
the lethargy of the officialdom. The minimum to be done is to ensure that the provisions
of the statute are strictly followed. In his endeavour, Advocate Sri. Thanu Pillai had
referred to Section 30B of the Act which had been brought into force with effect from
25.11.1988. When a vehicle carrying goods form any place outside the State and
bound for any place outside the State passes through the Kerala State, the owner or driver or person in charge of the vehicle are obliged to obtain transit passes in the
prescribed form. Sub-section 4 provides as following:-
“(4) Where any person consigns any goods or transports any goods from another State
into the State and where the particulars furnished in the declaration prescribed n Clause (b) of
Sub-section(2) of Section 29 are false or the consignor or purchaser stated therein is found to be bogus or
nonexistent or is not traceable or denies such purchase, it shall, unless the consignor or the owner
of the vehicle or the person in charge of the vehicle proves to the satisfaction of the assessing
authority that the particulars furnished in the declaration are true, be presumed that such goods
which are liable to tax under this Act have been sold in the State by the Consignor or the owner
of the goods or the owner or driver or person in charge of the vehicle or the person in charge
of the goods or all of them jointly and they shall be jointly or severally liable to pay tax on such
sales which shall be assessed and recovered in the manner provided in Sub-section (3).”
7. From the check post reports, it is clear that substantial consignments had
entered the State’s boundary, and the petitioner is shown as the consignee. The
petitioner emphatically submits that he had denied such purchase and it was the duty
of the Department to see whether there was observance of the responsibilities that
are expected from a dealer. It ought not have been permissible to ignore the statutory
prescriptions and proceed against innocent assessee. It is further submitted that
improper handling and forwarding of sales tax declarations expected to be collected at the check post and the delay in processing them was causing headache to honest
assessees. Therefore had reconciliation form month to month as initially contemplated
got exercise, there would have been no possibility for heartburn as presently
experiences. Reference to Ext. P7 had been made in the aforesaid context.
8. It is obvious that if the grievances highlighted are real, it do present a dismissal management of the affairs. The wisdom behind Circular No. 19/88 dated 14.12.1988
cannot but be emphasised. They operate to the advantage of the Revenue as well as
confer relief to the assessee. The misuse of declaration obtained, according to the petitioner, had resulted in the penalty being imposed on him. Though it is too premature
for this Court to pronounce upon the point, the circular has pointed out that laxity may
destroy the very purpose for which the check posts are established. The circular has
further laid down the instructions to minimise the possible malpractices. The Sales
Tax Inspectors of the Intelligence Wing are expected to take down extracts of
transported goods and cross verify it with consignee dealers. This is expected to be
reviewed by the Deputy Commissioner, every month, and the proceedings in turn are
to be forwarded to higher authorities. These procedural safeguards would not only be
to the advantage of the Department for asserting themselves, but will also be welcomed
by assessees whose names every often are alleged to be misused by unscrupulous
persons. The petitioner has rightly pointed out to his predicament, viz., that, during
2001, it has bene threatened that the declarations made in 1999 are decide to be used
against him. This practice, at least in certain cases may work out prejudice.
9. It has to be noticed that under Section 30B of the K.G.S.T. Act, for the purpose of
the section, the owner or driver of person in charge of the vehicle and the vessel shall,
even if not registered under the Act, be deemed to be a registered dealer for the
assessment of tax under the Act. Counsel also invited my attention to Rule 57 of the
Kerala General Sales Tax Rules which mandated operator of a vehicle or vessel to
submit to the assessing authority the copies of bill of sale, deliver-notice, way bill,
certificate etc., regarding the ownership of the goods giving details of delivery and
duly signed by purchaser, consignee. It is their obligation to submit such reports every
month. Likewise, the necessity for submission of returns by forwarding agency and
clearing house etc., prescribed under Rule 58 and the obligation of banks and other
institutions to forward every month returns showing the bills relating to goods discounted,
cleared and negotiated through their branches indicated that there was no dearth of
statutory provisions. It may be only a failure to enforce such duties appropriately and
in a timely manner, and of course in effective supervision.
10. I therefore direct that if there is no obedience made to he statutory provision
and circular, relating to declarations and returns, the second respondent should see
that expeditious steps are taken for obvious reasons for enforcement of the same.
Facts f this case prima facie, show that there has been lethargy on the part of the
Departmental Officers. At least, till such time the check posts exist and the present
taxation system is in vogue, it has to be ensured that the system as envisaged works.
11. In view of the statutory remedy available, in this Original Petition, I decline to
grant relief to the petitioner. The revision, if filed within one month should be entertained
as filed within time. I also make ti clear that enforcement of penalty proceedings will
stand suspended fro a period of one month and it will be appropriate for the revisional
authority to examine the applications for interlocutory orders as and when that are made in the revisional proceedings.
12. The Original petition is closed with the above observation.