J.D. Ambayya, Son of Yesudas V. The Asst. Commissioner (Assessment), Special Circle, Kannur and Deputy Commissioner, Agricultural Income Tax and Sales Tax, Kannur and The Board of Revenue (Taxes), Rep. by Member (Taxes), Thiruvananthapuram

OP/9843/1997

AI Insights

The case involves J.D. Ambayya, the petitioner, challenging an order confirming a penalty under Section 45A of the KGST Act for the assessment years 1990-91 and 1991-92. The penalty was based on findings that the petitioner had not accounted for purchases made through several demand drafts (DDs) sent to outside dealers, which were inferred to be purchases from suppliers in Tamil Nadu. The court upheld the findings of the lower authorities, which were consistent with the petitioner's admitted pattern of business transactions. However, the court showed leniency by reducing the penalty, contingent upon the timely payment of the reduced amount by the petitioner.

• Counselvise Citation: [2008] 140 COUNSELVISE.COM (IT) 799185 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 29-02-2008
• Assessment Year: misc
• Laws Referred To: KGST Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: K P PRADEEP
• Assessee Lawyers: T M SREEDHARAN; N UNNIKRISHNAN
• Keywords: Assessment; Penalty; Sales Tax; Tax Evasion; DD transactions
• Section: 45A

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR FRIDAY, THE 29TH FEBRUARY 2008 / 10TH PHALGUNA 1929 OP.No. 9843 of 1997(V) ---------------------- PETITIONER: ------------ J.D. AMBAYYA, SON OF YESUDAS,. AGED 51 YEARS, JYOTHI NIVAS, PARAKANDY, THALIKKAVU, KANNUR 1 BY ADV. SRI.T.M.SREEDHARAN SRI.N.UNNIKRISHNAN RESPONDENTS: ------------- 1. THE ASST. COMMISSIONER (ASSESSMENT), SPECIAL CIRCLE, KANNUR. 2. DEPUTY COMMISSIONER, AGRICULTURAL INCOME TAX AND SALES TAX, KANNUR. 3. THE BOARD OF REVENUE (TAXES), REP. BY MEMBER (TAXES), THIRUVANANTHAPURAM. BY GOVERNMENT PLEADER SRI. K.P. PRADEEP THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 29/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 ORDER ON CMP 17252 OF1997 IN OP 9843 OF 1997 DISMISSED 29.2.2008 SD/-C.N.RAMACHANDRAN NAIR, JUDGE. APPENDIX PETITIONER'S EXHIBITS: EXT.P1 TRUE COPY OF ORDER NO. IB/90-91 DATED 17.5.1994 IMPOSING PENALTY FOR RS. 56,000/- FOR 1990-91 PASSED BY THE INTELIGENCE OFFICER, KANNUR. EXT.P2 TRUE COPY OF ORDER NO. IB/91-92/JDA DATED 17.5.1994 FOR 1991=92 PASSED BY THE INTELLIGENCE OFFICER, KANNUR IMPOSING PENALTY FOR RS. 69,000/-. EXT.P3 TRUE COPY OF ORDER IN RP NO. 173 OF 1994 DATED 1.11.1995 PASSED BY THE 2ND RESPONDENT. EXT.P4 TRUE COPY OF ORDER IN RP NO. 171 OF 1994 DATED 25.10.1995 PASSED BY THE 2ND RESPONDENT. EXT.P5 TRUE COPY OF NOTE SUBMITTED BY COUNSEL FOR THE THIRD RESPONDENT. EXT.P6 TRUE COPY OF ORDER NSO. R3-7557/96/TX & R3-57823/95/TX/STRP. 13/97 AND 13A/97 DATED 11.1.1997 PASSED BY THE THIRD RESPONDENT. RESPONDENTS' EXHIBITS: NIL. TRUE COPY P.S. TO JUDGE. C.N. RAMACHANDRAN NAIR, J. -------------------------------------------- O.P. NO. 9843 OF 1997 -------------------------------------------- Dated this the 29th day of February, 2008 JUDGMENT Petitioner is challenging Ext.P6 order whereunder the Commissioner has confirmed penalty levied under Section 45A of the KGST Act for the assessment years 1990-91 and 1991-92. I have heard counsel appearing for the petitioner and Government Pleader appearing for the respondents. The fact found by the Intelligence Officer of Sales Tax on enquiry is that petitioner has not accounted the purchases made through several DDs sent to outside dealers. Even though petitioner has denied DDs as representing purchase price paid to suppliers in Tamil Nadu, it is conceded that petitioner has accounted several purchases from the very same dealers and the pattern of payment was through DDs sent from Kerala. Based on this fact, the lower authorities concluded that the transactions pertaining to DDs not accounted are purchases by the petitioner. I find no ground to deviate from this finding of all lower authorities because finding is consistent with the pattern of business conceded by the petitioner. Even though counsel for the petitioner has relied on the judgment of this Court in the 2 assessee's own case for some other years, in view of the findings concurrently by all lower authorities, I do not think there is any justification for me to reverse the same following the said judgment. The findings in the order under challenge are based on evidence natural and convincing. Therefore I decline to interfere with the same. The addition of gross profit at 10% for the purpose of determining tax on sales turnover calls for no inference because this could be the minimum margin required for business to be viable. However, since the penalty levied is for the years 1990-91 and 1991-92, I feel some leniency can be shown, if the petitioner pays the balance amount of penalty sustained within a reasonable time. O.P. is accordingly partly allowed reducing the penalty sustained through impugned proceedings to 1-1/2 times of the tax sought to be evaded as against double the amount of tax confirmed by the Commissioner, provided petitioner pays the same with applicable rate of interest on or before 31.5.2008. If the petitioner does not pay the amount as above, then O.P. will stand dismissed and respondents will be free to proceed for recovery of the entire arrears due. (C.N. RAMACHANDRAN NAIR) Judge kk 3 "