IN THE HIGH COURT OF KERALA AT ERNAKULAM
OT.Rev.No. 50 of 2010()
1. NEPTUNE REDYMIX CONCRETE (P) LTD,
... Petitioner
Vs
1. STATE OF KERALA, REPRESENTED BY
... Respondent
For Petitioner :SRI.K.N.SREEKUMARAN
For Respondent : No Appearance
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice P.S.GOPINATHAN
Dated :28/07/2010
O R D E R
C .N. RAMACHANDRAN NAIR, &
P.S. GOPINATHAN, JJ.
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O. T. Rev. No. 50 of 2010
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Dated this the 28th day of July, 2010
JUDGMENT
Ramachandran Nair, J.
Heard counsel for the petitioner and Government Pleader for the
respondent. The order under challenge is the one issued by the VAT
Appellate Tribunal reducing the penalty which was originally fixed at
Rs. 96 lakhs, and partly reduced by the first appellate authority to Rs.
69 lakhs, to Rs. 5 lakhs for the attempted evasion of tax due under the
VAT Act. The contention of the petitioner is that penalty levied is on
account of mis-classification of goods from 12.5 per cent to 4 per cent
and consequently delay in payment of tax. According to counsel, after
assessment, entire tax arrears are paid in terms of instalments granted
by the assessing officer along with interest. Since there is no attempt to
evade payment of tax, penalty itself is unauthorised, is the contention
of petitioner. However, after going through various orders and after
hearing the parties on both sides, we are not convinced that petitioner
has any case for total waiver of penalty because petitioner in the first
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place has no basis for returning the turnover at four per cent. Secondly,
even after receipt of notice from the assessing officer pointing out short
payment of tax, which happened sometime in July, 2005 itself,
petitioner has not chosen to revise the return or remit tax on which
there is no contest. This prompted the assessing officer to initiate
penalty proceedings and the assessing officer levied huge penalty of
Rs. 96 lakhs for two different periods of the same year. The Tribunal
however sustained only Rs. 5 lakhs which is actually 5 per cent of the
penalty initially levied by the assessing officer and only around 8 per
cent of the penalty sustained by the first appellate authority. Even
though petitioner did not make serious contest against assessment at
higher rate of 12.5 per cent and the petitioner has in fact made
payment, though with delay along with interest, we notice that all these
were done by the petitioner only because of the prompt action taken by
the assessing officer in making assessment. If petitioner voluntarily
filed revised returns and remitted tax in response to the notice issued by
the assessing officer, then certainly petitioner could have claimed total
immunity from payment of penalty. However, in this case, tax was paid
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under compelling orders issued by the assessing officer. Therefore we
see no reason to completely exonerate the petitioner from penalty.
Considering the fact that penalty sustained by the Tribunal is only 5 per
cent of the amount of penalty levied by the assessing officer, we do not
find any ground for grant of quantum relief as well. Consequently,
O.T. Rev. is dismissed.
(C.N.RAMACHANDRAN NAIR)
Judge.
(P.S. GOPINATHAN)
Judge.
kk OT Rev. 50/2010 4