IN THE HIGH COURT OF KERALA AT ERNAKULAM
ST.Rev..No. 69 of 2010()
1. SRI.A.AJIL KUMAR,
... Petitioner
Vs
1. THE STATE OF KERALA,
... Respondent
For Petitioner :SRI.E.P.GOVINDAN
For Respondent : No Appearance
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice P.S.GOPINATHAN
Dated :21/05/2010
O R D E R
C.N.Ramachandran Nair & P.S.Gopinathan, JJ.
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S.T(RV)Nos.69 & 70 of 2010
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Dated this the 21st day of May, 2010.
ORDER
Ramachandran Nair, J.
1.Heard counsel for the revision petitioner and
Government Pleader for the respondent.
2.Petitioner is a saw mill owner stated to be
engaged in cooly sawing. However, during one
inspection held in 2004-05, a total stock of
timber valued at around Rs.1,38,000/- was noticed
and for want of proof of records pertaining to
taking of goods for cooly sawing, the
Intelligence Officer levied penalty and based on
penalty order, assessment is also made on
estimation basis. Petitioner challenges both the
penalty orders and assessment orders under
revision and appeal and since Tribunal confirmed
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all the impugned orders, these revisions are
filed both against penalty as well as assessment.
3.The first contention raised by the counsel for
the petitioner is that the records pertaining to
cooly sawing were produced before the
adjudication officer, even though it was not
produced at the time of inspection. Further, he
pointed out that timber is entrusted by local
people, who are known to the petitioner and
therefore, non-maintenance of register for cooly
sawing does not give rise to a presumption that
the petitioner was engaged in purchase or sales
of timber. Government Pleader submitted that,
being a registered dealer, petitioner is bound to
maintain records, which should include register
of stock taken for cooly sawing. Even though we
agree in principle about the requirement of
record for cooly sawing, which should be
STRV69&70/10 -:3:-
available in the mill at all times, we notice
that the petitioner has a specific case that he
was never assessed previously or subsequently for
purchase or sale of timber. In the previous
year, assessment is stated to be under Section 17
(4) and in subsequent years also, petitioner has
not returned any turnover on purchase and sales
considering the small value of the total stock,
which is only around Rs.1.38 lakhs, it is very
unlikely that the petitioner was acting as a
dealer in timber because with such small stock of
timber, business itself may not be viable.
Strangely, even after detecting alleged
unaccounted purchase and sale, none of the
department officers had chosen to conduct further
inspection in subsequent years to verify whether
really there is purchase and sales by the
petitioner. If petitioner is not found to be
involved in trading in any previous year or
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subsequent year, we do not think that the penalty
order could be sustained, merely because, the
petitioner failed to produce the register for
cooly sawing at the time of inspection. We,
therefore, allow the revisions by setting aside
the orders of the Tribunal and that of the lower
authorities and remand the matter to the
assessing officer to go through the assessment
records of previous years and subsequent years
and if trading is not reported by the petitioner
and the petitioner is not assessed to tax for
purchase and sales in any of these years, then no
penalty or tax should be imposed against the
petitioner for this year pursuant to the
inspection report. However, if the petitioner is
found to have purchased and sold timber during
any of these years, the assessing officer will
examine the genuineness of the details of
register produced by the petitioner subsequently
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and if transaction is found to be genuine, he
will grant exemption and if it then he will be
free to issue notice to the petitioner, levy
penalty as well as tax. However, we make it
clear that enquiry need be conducted only if the
petitioner is assessed for any other year for
purchase and sale of timber in his mill.
C.N.Ramachandran Nair, Judge.
P.S.Gopinathan, Judge.
sl.