Partly allowed

State of Kerala v. M/S. Crompton Greaves Ltd.

Kerala HC22 Jun 2018OT.Rev/153/2015

Case brief

AI extract

What is this about?

The High Court answered a question of law in favor of the Revenue, holding that the assessee's accounting and purchasers' letters did not disprove an attempt to evade tax. The court set aside the Tribunal's order and reinstated the penalty for alleged tax evasion.

What did the court decide?

Set aside the order of the Tribunal confirming the order of the lower authorities and imposed penalty.

State of Kerala Vs M/S. Crompton Greaves Ltd. — Writ and Judicial Review | Kerala HC (2018)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN

¶3

THE HONOURABLE MR. JUSTICE ASHOK MENON

¶4

FRIDAY, THE 22ND DAY OF JUNE 2018 / 1ST ASHADHA, 1940

¶5

OT.Rev.No. 153 of 2015

¶6

AGAINST THE ORDER/JUDGMENT IN TAVAT 154/2013 of KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM DATED 30-03-2015

¶7

REVISION PETITIONER(S)/RESPONDENT/RESPONDENT/REVENUE

¶8

STATE OF KERALA

¶9

BY ADV.MOHAMMED RAFIQ, SR.GOVERNMENT PLEADER

¶10

RESPONDENT(S)/APPELLANT/APPELLANT/ASSESSEE:

¶11

M/S. CROMPTON GREAVES LTD.

¶12

KOCHI 682031

¶13

BY ADV. SRI.JOSEPH JERARD SAMSON RODRIGUES BY ADV. SRI.ROVIN RODRIGUES

¶14

THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON 22-06-2018, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

¶15

O.T.REV.153/2015

¶16

APPENDIX

¶17

REVISION PETITIONER'S EXHIBITS

¶18

ANNEXURE-A : COPY OF ORDER ISSUED BY THE INTELLIGENCE OFFICE SQUAD NO.II, ERAKULAM DATED 4.9.2010. ANNEXURE-B : COPY OF ORDER PASSED BY THE ASSISTANT COMMISSIONER (APPEALS) II, OFFICE OF THE DISTRICT COLLECTOR (A), COMMERCIAL TAX ERNAKULAM DATED 30.04.2011. ANNEXURE-C : COPY OF THE ORDER DATED 30.3.2015 PASSED BY THE KERALA VALUE ADDED TAX APPELLATE TRIBUNAL, ERNAKULAM.

//TRUE COPY//

PS TO JUDGE.

jg-25/6

K.VINOD CHANDRAN & ASHOK MENON, JJ.

¶23

------------------------------------------O.T.Rev.No.153 of 2015

¶24

------------------------------------------Dated this the 22^nd day of June, 2018

¶25

O R D E R

¶26

Vinod Chandran, J.

¶27

The State is before this Court challenging the order of the Kerala Value Added Tax Appellate Tribunal raising the following question of law as re-framed by us:

¶28

Whether in the facts and circumstances of the case, the Tribunal was correct to hold that the consignment in question having been duly accounted for by the appellant-assessee as also the purchasers, there was no further evidence to prove the attempt of evasion as alleged in the notice issued under Section 47 of the Kerala Value Added Tax Act, 2003?

¶29

The facts to be noticed are that the assessee a manufacturer of electrical equipments was transporting electrical goods from Ernakulam to Kottarakkara to two retail dealers. The transport was commenced on 28.10.2008 and was detained at Alappuzha on 31.10.2008. The goods were accompanied with invoices dated 30.9.2008. There was considerable delay

¶30

O.T.Rev.153/2015

¶31

-2-

¶32

in the transport of the goods which raised a suspicion of multiple transport. The Intelligence Officer passed Annexure-A order imposing penalty at twice the amount of tax sought to be evaded. The first appellate authority confirmed the same. The Tribunal on the basis of the accounting carried out by both the assessee and the purchasers as also the finding that there is no further evidence to support the allegation of tax evasion, set aside the order of penalty.

¶33

The learned Senior Government Pleader would contend that the Tribunal had erred in so setting aside the penalty, since the accounting could have been made only after the transport of the goods. There could always be a multiple transport in between, with the very same invoice, which would not come to the notice of the Department and would have not been included in the accounts.

¶34

The learned counsel for the respondentassessee submits that the assessee's case was supported by the letters of the purchasers. The purchasers had specifically instructed the assessee not to send the goods for reason of want of space in their business premises.

¶35

O.T.Rev.153/2015

¶36

-3-

¶37

The Intelligence Officer had also considered veracity of the letters issued. We would not go into that. Even otherwise, we see that the purchase orders were raised by the purchasing dealers on 30.9.2008 and 29.9.2008. The letter expressing shortage of space is on 30.9.2008. If there was such shortage of space, it is not clear as to why a purchase order was raised on the very same day or on the previous day. We do not think that the action of the consignor was above board and bona fide. The letters are an after thought and would not establish that the transport was bona fide.

¶38

The learned counsel for the assessee also relied on the decision of the Honourable Supreme Court in (2008) 16 KTR 247 (SC) [Assistant Commissioner v. Amtek India Limited] to contend that even when there was a delay of one year, the Supreme Court had permitted such transport and interfered with the penalty. We are surprised that the decision is placed for our perusal, especially when the dictum is not at all on delay in transport. The appeal by the Department was only with respect to the cost imposed on the Officer by the High Court, in revision. The proceedings commenced on a detention in which an

¶39

O.T.Rev.153/2015

¶40

-4-

¶41

invoice was held to be not genuine by the Officer, on which ground the penalty was imposed. The facts noticed would indicate that there was one year's delay in the transport, that is from the date of invoice and the date of detention. However, there was no proceedings taken on the ground of such delay and the allegation was only of the invoice being not genuine. We do not think that this would in any manner help the assessee herein; nor is there any declaration that the delay would not entail penalty for tax evasion. We, hence, answer the question of law in favour of the Revenue and against the assessee and set aside the order of the Tribunal confirming those of the lower authorities.

¶42

Sd/ASHOK MENON JUDGE

¶43

State of Kerala v. M/S. Crompton Greaves Ltd.

Case brief

What is this about?

What did the court decide?

State of Kerala v. M/S. Crompton Greaves Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

C.K.Gopi Vs the Chief Secretary

Oasis Trading Company Vs State of Kerala

Manager, Bata Shoe Store Vs a.L.Domini

The Assistant State Tax Officer Vs M/S Alfa Aluminium

P.K.Abdul Salam Vs State of Kerala

Gopalakrishnan Nair R. Vs the Director General of Police