Dismissed

M/S.Cream Packs (P) Ltd, Kannur v. State of Kerala

Kerala HC19 May 2016OT.Rev/5/2013

Case brief

AI extract

What is this about?

In this VAT revision, the High Court of Kerala dismissed the petitioner's challenge to the Tribunal's upholding of penalty proceedings. The court held that the petitioner failed to prove the sale was completed since goods were intercepted during transit, and thus the penalty was justified.

What did the court decide?

Revision petition dismissed; penalty proceedings upheld.

M/S.Cream Packs (P) Ltd, Kannur Vs State of Kerala — Kerala HC (2016) — LawSathi Research

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE ANTONY DOMINIC &

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THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU

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THURSDAY, THE 19TH DAY OF MAY 2016/29TH VAISAKHA, 1938

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OT.Rev.No. 5 of 2013 ()

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AGAINST THE ORDER/JUDGMENT IN TA 143/2010 of KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM DATED 09-08-2012

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REVISION PETITIONER(S):

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M/S.CREAM PACKS (P) LTD, KANNUR.

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BY ADVS.SRI.K.I.MAYANKUTTY MATHER SMT.M.RAMANYA GAYATHRI

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RESPONDENT(S):

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STATE OF KERALA REPRESENTED BY DEPUTY COMMISSIONER(LAW) COMMERCIAL TAXES, ERNAKULAM

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R BY GOVT PLEADER SMT.SOBHA ANNAMMA EAPEN

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THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON 19-05-2016, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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OTRV.5/13.

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APPELLANT'S EXHIBITS:

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ANNEXURE A: TRUE COPY OF THE ORDER OF THE INTELLIGENCE OFFICER, COMMERCIAL TAXES, KANNUR.

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ANNEXURE B: TRUE COPY OF THE ORDER OF THE DEPUTY COMMISSIONER (APPEALS) II, KOZHIKODE.

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ANNEXURE C: TRUE COPY OF THE ORDER OF VALUE ADDED TAX APPELLATE TRIBUNAL, ERNAKULAM.

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/TRUE COPY/

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PS TO JUDGE

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ANTONY DOMINIC & DAMA SESHADRI NAIDU, JJ.

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O.T.Rev.No.5 of 2013

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Dated this the 19^th day of May, 2016

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O R D E R

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Dama Seshadri Naidu, J.

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The revision petitioner, a manufacturer of ice creams, is an assessee on the rolls of the Assistant Commissioner (Assessment), Special Circle, Kannur. The fact of the matter is that on 20.9.2006, the revision petitioner sold frozen desserts on the strength of three invoices to one M/s.Cream Land. From the petitioner’s place, i.e., Kannur, when the consignment was being transported to Vatakara,

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the consignee’s place, en route the transporting vehicle was intercepted.

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It has come on record that the driver of the vehicle at the time of interception could produce only two invoices out of three. It resulted in the seizure of the vehicle. To get the vehicle and goods released, the driver deposited `4,900/- as security. Later, consequent to the penalty proceedings under section 47 of the KVAT Act initiated by the Intelligence Officer, the revision petitioner filed

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OTRV.5/13

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an appeal before the Deputy Commissioner (Appeals) II, Kozhikode, in VATA No.241/07.

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Aggrieved by the order of confirmation in appeal, the revision petitioner further carried the matter before the Tribunal, which also concurrently upheld the findings in TA(VAT) No.143/10, though it reduced the penalty equal to the tax estimated to have been evaded. Under those circumstances, further aggrieved, the revision petitioner has approached this Court.

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The learned counsel for the petitioner has strenuously contended that the petitioner on the eventful day sold and delivered the consignment to the consignee at its manufacturing unit. According to him, at the time of interception, the driver employed by the consignee could not produce the third invoice, perhaps, confused. Be that as it may, the learned counsel’s singular contention is that once the sale is completed, the petitioner cannot be made to suffer on any count.

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On the other hand, the learned Government Pleader has, with equal vehemence, contended that the petitioner has produced

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OTRV.5/13

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no iota of evidence to establish that it has completed the sale at its manufacturing unit. It is an established practice, asserts the learned Government Pleader, that until the goods reach the destination, the sale ought to be treated as having not been completed. And for all consequences, the owner is answerable.

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The learned Government Pleader has been insistent that the petitioner has failed even to examine the driver, who was allegedly engaged by the consignee. Nor has the petitioner initiated any action against the consignee for the consequences it suffered because of the alleged lapse by the consignee’s driver. She has also submitted that the authorities have rightly concluded that the attempt on the petitioner’s part reflecting all the three invoices in the books of account was only an afterthought; if there had been no interception, the petitioner would have got away with the tax evasion.

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Heard the learned counsel for the petitioner and the learned Government Pleader, apart from perusing the record.

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The issue, in our view, lies in a narrow compass requiring little elaboration and cogitation, too. All the three orders—of the

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OTRV.5/13

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Intelligence Officer, the First Appellate Authority, and the learned Tribunal—have been consistent in their approach that the sale has not been completed and that the owner has produced no convincing proof that he has completed the transaction.

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In other words, the petitioner has, it is held, miserably failed to discharge the evidentiary burden that it was only due to the consignee’s failure the petitioner could not properly account for all the transaction.

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In a conspectus, we may observe that there is sufficient strength in the learned Government Pleader’s submission: The usual presumption is that the sale is not complete until the consignment is delivered to the consignee, presumably, at its doorstep. In the present case, there is a grave failure on the petitioner’s part to establish in positive terms that it completed the transaction of sale and that at the time of interception, the consignment was being transported by the consignee.

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Absent any proof to the effect stated above, the authorities have concurrently—in our view rightly, too—concluded that the

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OTRV.5/13

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petitioner is liable to penalty proceedings under section 47 of the

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Act. Under these circumstances, we see no material irregularity in

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the findings arrived at by the Tribunal to be interfered with.

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Accordingly, the revision is dismissed.

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Sd/ANTONY DOMINIC, Judge.

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Sd/DAMA SESHADRI NAIDU, Judge.

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kkb.

M/S.Cream Packs (P) Ltd, Kannur v. State of Kerala

Case brief

What is this about?

What did the court decide?

M/S.Cream Packs (P) Ltd, Kannur v. State of Kerala

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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