The High Court of Kerala dismissed a tax revision petition challenging a penalty order. The court held that penalty was justified because the assessee evaded tax by misclassifying machinery during the compounding process.
Revision petition dismissed; penalty order confirmed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE ANTONY DOMINIC &
THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU
MONDAY, THE 13TH DAY OF JUNE 2016/23RD JYAISHTA, 1938
OT.Rev.No. 97 of 2016 ()
REVISION PETITIONER(S):
M/S.BHARATH ROCK PRODUCTS KUZHIYAMPADAM, MANJAPRA, REPRESENTED BY ITS PARTNER, VINEESH K.V.
BY ADV. SRI.P.N.DAMODARAN NAMBOODIRI
RESPONDENT(S):
STATE OF KERALA REPRESENTED BY IT'S SECRETARY TO GOVERNMENT, FINANCE DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.
R BY SR GOVT PLEADER SMT.SOBHA ANNAMMA EAPEN
THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR ADMISSION ON 13-06-2016, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:
APPENDIX IN OTRV.97/16
PETITIONER'S EXHIBITS:
/TRUE COPY/
PS TO JUDGE
ANTONY DOMINIC & DAMA SESHADRI NAIDU, JJ.
O.T.Rev.No.97 of 2016 ----------------------------------Dated this the 13th day of June, 2016
O R D E R
Antony Dominic, J.
OTRV.97/16
2
confirmed by the Deputy Commissioner and by the Commissioner of Commercial Taxes in revision, as per the impugned order. It is aggrieved by these proceedings, the revision is filed.
4.The first contention raised by the counsel for the petitioner is that there was no suppression justifying proceedings for levy of penalty. This contention of the learned counsel is only to be rejected in as much as the case is that the assessee has misclassified the machinery as primary instead of secondary and thereby evaded tax. The fact of misclassification is seen to have been confirmed by the Intelligence Officer who conducted a detailed verification and enquiry on the request made by the assessee itself before penalty was levied. In such circumstances, the question of misclassification is an established fact and the assessee cannot argue that there was no attempt to evade tax.
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5.It was then contended by the learned counsel that in a proceedings of this nature, penalty under section 67 cannot be levied. We are unable to agree with the learned counsel. When a case of evasion of tax is established as in this case, the authorities under the Act are entitled to initiate proceedings under section 67 of the Act and they are also entitled to levy penalty. True, in this case, the maximum penalty of double the amount of compounded tax suppressed by misclassification was levied. Though the learned counsel took objection to this also, we are not inclined to agree with him. As we have already stated, this is a case where the assessee had opted for compounding. In that option exercised by the assessee, he had misclassified the machinery in order to evade tax. When that misclassification was found out, the Intelligence Officer was fully justified in the penalty he has levied. Further, this penalty levied has been concurrently upheld by the two statutory authorities also. In such
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circumstances, we do not find any ground to interfere.
Revision fails and is accordingly dismissed.
Sd/ANTONY DOMINIC, Judge.
Sd/DAMA SESHADRI NAIDU, Judge.
kkb.
3 issues framed by the court
Whether penalty under section 67 of the Kerala Value Added Tax Act can be levied when the assessee misclassified machinery while opting for compounding.
Whether the levy of double the amount of tax suppressed by misclassification is justified.
Whether the lower authorities erred in confirming the penalty order.
2 provisions across 1 enactments
M/S.BHARATH ROCK PRODUCTS KUZHIYAMPADAM
STATE OF KERALA
ANTONY DOMINIC
DAMA SESHADRI NAIDU
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
