IN THE HIGH COURT OF KERALA AT ERNAKULAM
OP.No. 19611 of 1998(I)
1. K.PRABHAKARAN
... Petitioner
Vs
1. THE SALES TAX OFFICER
... Respondent
For Petitioner :SRI.V.JAYAKUMAR
For Respondent :GOVT.PLEADER
The Hon'ble MR. Justice S.SIRI JAGAN
Dated :14/01/2009
O R D E R
S.SIRI JAGAN, J
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O.P. No. 19611 of 1998
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Dated this the 14th day of January, 2009
J U D G M E N T
In respect of non-inclusion of certain amounts realised for sale of
cement and other materials to the Kerala State Housing Board in his
return under the Kerala General Sales Tax Act, the petitioner was
proceeded against for imposition of penalty under Section 45 A of the
Act. Ext.P1 notice was issued to the petitioner. Ext.P2 reply was
submitted by the petitioner contending inter alia that the tax for the
turnover which was not included in the petitioner’s return, had already
been deducted at source by Kerala State Housing Board and the TDS
certificate was submitted along with the explanation. Despite the
explanation, Ext.P3 order was passed by the original authority,
imposing on the petitioner penality of Rs. 16,782/- being twice the tax
due on the alleged suppressed turnover. The petitioner filed a revision
before the revisional authority, which was dismissed by Ext.P14 order.
The petitioner filed a second revision, in which the penalty was reduced
to Rs. 8,391/-. The petitioner is challenging Exts.P3, P14 and P15
orders, in this writ petition. The contention raised by the petitioner is
that the fact that he had no intention to evade tax is clear from the fact
O.P. No. 19611 of 1998 – 2 –
that the tax due on the alleged suppressed turnover had already been
deducted at source paid to the department by the Kerala State Housing
Board. In so far as the imposition of penalty is a quasi criminal
proceedings, the authority who seeks to impose penalty was bound to
consider whether there was any contumacious conduct on the part of
the petitioner and whether there was any deliberate attempt to evade
tax, which has not been considered by any of the authorities is the
submission of the petitioner. The petitioner therefore submits that the
impugned orders are patently unsustainable.
2. I have considered the rival contentions in detail.
3. No counter affidavit has been filed in this case. In Ext.P2 reply
to Ext.P1 show cause notice, the petitioner has specifically stated thus:
“However, in order to avoid any further legal tangles I have
included there the cost of materials and labour in my turnover as is
evidenced by the revised return in fort 8 submitted to you and the tax
due on the said turnover has already been deducted at source by the
Kerala State Housing Board and paid to the department in time as is
evidenced by the tax deducted at source certificate submitted to you.”
4. Ext.P3 which is the original order imposing penalty refers to
the reply filed by the petitioner as follows:
“A notice containing the above facts were issued to the
dealer. In reply to the notice, Sri. K. Prabhakaran has stated as
follows:-
Penalty can be imposed if there was a wilful non-disclosure
of assessable turnover. The statement before the Intelligence
Officer was not of his. The amount received are only cost of
labour.”
O.P. No. 19611 of 1998 – 3 –
5. In one of the impugned orders is there even any mention about
the said contention raised by the petitioner in the reply which is quoted
above. I am of opinion that, the tax having been deducted at source
whether there was any attempt on the part of the petitioner to evade tax
is a very relevant consideration in the matter of imposition of penalty,
which has not been adverted to. That being so, the authority
considering the penalty proceedings ought to have considered that
contention of the petitioner in the orders passed pursuant to Ext.P1
notice and Ext.P2 reply. Obviously such an exercise has not been
undertaken by the 1st respondent in Ext.P3 order or in Exts.P14 or P15.
I am of opinion that the matter should therefore be reconsidered by the
original authority namely the 1st respondent. For this purpose, I quash
the impugned orders. The 1st respondent shall pass fresh orders in the
matter, in the light of the above findings, as expeditiously as possible, at
any rate, within three months, from the date of receipt of a copy of this
judgment, after affording an opportunity of being heard to the petitioner.
The original petition is disposed of as above.
S.SIRI JAGAN, JUDGE
rhs