Dismissed

The State of Kerala v. Steel Emporium

Kerala HC6 Dec 2022OT.Rev/21/2020

Case brief

AI extract

What is this about?

The High Court of Kerala, at Ernakulam, dismissed a tax revision filed by the State. The Court upheld the Tribunal's order cancelling a penalty imposed for missing delivery notes, finding no evidence of tax evasion as tax had been collected on the sale invoices.

What did the court decide?

The revisions were dismissed; the Tribunal's order cancelling the penalty and directing refund of security amount was upholds.

The State of Kerala Vs Steel Emporium — Cheque Dishonour | Kerala HC (2022)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MR.JUSTICE S.V.BHATTI

¶4

¶5

THE HONOURABLE MR.JUSTICE BASANT BALAJI

¶6

TUESDAY, THE 6^TH DAY OF DECEMBER 2022 / 15TH AGRAHAYANA,

¶7

1944

¶8

OT.REV NO. 21 OF 2020

¶9

TAVAT 967/2018 OF AGRL.I.T.ADDITIONAL BENCH,KOZHIKODE

¶10

REVISION PETITIONER/S:

¶11

THE STATE OF KERALA REPRESNTED BY THE DEPUTY COMMISSIONER OF STATE TAX (LAW), DEPARTMENT OF KERALA STATE GOODS AND SERVICE TAX, ERNAKULAM.

¶12

BY GP, SMT JASMINE

¶13

RESPONDENT/S:

¶14

STEEL EMPORIUM SOUTH BAZAR, KANNUR - 670002.

¶15

BY ADVS. SRI.T.M.SREEDHARAN (SR.) SRI.V.P.NARAYANAN SMT.DIVYA RAVINDRAN

¶16

OTHER PRESENT:

¶17

THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR ADMISSION ON 06.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶18

OT.REV NO. 21 OF 2020

¶19

S.V.BHATTI & BASANT BALAJI, JJ.

¶20

- - - - -- - - -- - - - - - - - - - -- - - - - - - - - O.T.REV NO. 21 OF 2020

¶21

¶22

ORDER

¶23

(Dated this the 6^th day of December 2022)

¶24

Basant Balaji J.,

¶25

This Revision is filed against the order in TA(VAT) No.967 of 2018 dated 16.4.2019 on the files of the KVAT

¶26

Tribunal, Additional Bench,Kozhikode. The order under challenge before the Tribunal was against the order of the Deputy Commissioner (Appeals) -II, wherein the imposition of penalty under section 67(1) of the KVAT Act

¶27

was imposed.

¶28

The questions of law raised by the revision

¶29

petitioner are as follows:

¶30

OT.REV NO. 21 OF 2020

¶31

-3-

¶32

Whether on the facts and circumstances of the case, the Appellate Tribunal has erred in cancelling the penalty particularly considering the fact that the delivery note, which is mandatory as per law, was not accompanied with the goods?

¶33

Whether on the facts and circumstances of the case, the Appellate Tribunal has correct in law in holding that since assessee has sold goods to a person at Tirur after collecting tax there is no attempt of evasion of tax, considering the fact that the relevant documents i.e. sale invoice and delivery note with regard to the sale of goods to the dealer at Tirur is not accompanied with the goods and not produced before the enquiry officer and that there is a delay of 4 days?

¶34

Whether on the facts and circumstances of the case, the Appellate Tribunal has erred in law in cancelling the penalty based on the documents, which were neither accompanied with the goods at the time of detention of goods nor produced in the enquiry proceedings?

¶35

The assessee is a dealer in M.S.Angles, M.S.Rods,

¶36

M.S. TMT Tor etc. On 17.03.2016, the Intelligence

¶37

Inspector Squad No.II, Commercial Taxes, Tirur, intercepted the vehicle with Reg.No.HR55-8889, with

¶38

goods transported by the respondent and on verification, it

¶39

OT.REV NO. 21 OF 2020

¶40

-4-

¶41

was found that the only document accompanied with the goods was the invoice of M/s.P.H.Mohammed Kunju and Brothers, Ernakulam, dated 12.03.2016 to the respondent noting the place of delivery at Tirur. The Intelligence Inspector found that the date of detection was on 17.03.2016 and the date of invoice was on 12.03.2016 and there is a delay of four days. Accordingly, a notice in Form No.17-A was issued to the respondent affording an opportunity to show cause for the defects noted in the said notice or to furnish security for the release of the goods. The respondent approached this court by filing W.P. (C)No.11042 of 2016, and as per the judgment dated 22.03.2016 directed to release the goods and vehicle for payment of 30% of the security amount demanded and furnishing simple bond for the balance amount. Thereafter,

¶42

OT.REV NO. 21 OF 2020

¶43

-5-

¶44

the files were submitted to the Intelligence Officer, Squad No.IV, Commercial Taxes, Kannur, for conducting enquiry and after obtaining the reply filed by the petitioner, the Intelligence Officer found that Form No.15/delivery note which is a mandatory requirement for transportation of goods was not accompanied with the goods and hence, vide order dated 30.11.2017 assessed tax imposing penalty on the respondent. Against the order of Sales Tax Officer the respondent filed appeal as VATA No.1418/17 before the Assistant Commissioner Appeals. The first appellate authority, by Annexure-C order, modified the order of penalty and reduced the penalty to the tax effect. The petitioner filed TA(VAT) No. 967 of 2018 against the modified order of the first appellate authority before the

¶45

Tribunal.

¶46

OT.REV NO. 21 OF 2020

¶47

-6-

¶48

The Tribunal took up the appeal and held that the assessee had purchased steel from M/s.P.H.Mohammed Kunju and Brothers, Ernakulam, as per invoice No.4836 dated 12.03.2016 by paying tax at 5% and thereafter it is sold by the assessee in favour of M/s.T.A.Abdul Rahman, Tirur, as per invoice No.455 dated 16.03.2016. The assessee had collected tax at the rate of 5% from M/s.T.A.Abdul Rahman. The Tribunal also found that the purchase invoice and the sale invoice have been uploaded in KVATIS data for the month of March, 2016. The copy of invoice No.455 in favour of M/s.T.A.Abdul Rahman on 16.03.2016 after collecting VAT at 5% also substantiates the fact that there is no attempt to evasion of payment of tax. So the Tribunal from the available evidence on record, satisfied that absolutely there was no attempt of evasion of

¶49

OT.REV NO. 21 OF 2020

¶50

-7-

¶51

tax on the part of the assessee and hence, the Second Appeal was allowed and the impugned order modifying the First Appeal was set aside and the security amount already collected was directed to be refunded. Challenging the order of second appeal, this revision is filed by the State.

¶52

The learned counsel for the respondent/assessee

¶53

has produced the delivery note downloaded online, which shows that a delivery note was issued accounting for the sale of the goods as per invoice No.4836 dated 12.03.2016. When the delivery note was issued on 12.03.2016, at 10.25 a.m., it shows that tax at the rate of 5% amounting Rs.57,022.52 was already paid and there cannot be any element of suspicion that there is an evasion of tax. On going through the orders of the Tribunal and the delivery

¶54

OT.REV NO. 21 OF 2020

¶55

note produced, which is contemporaneous to the transport on 12.03.2016, we are of the considered opinion that the finding entered by the Tribunal is in order and there is no illegality or impropriety in the order passed and therefore the questions of law raised by the appellants/State are answered against them. Therefore the revisions fails and accordingly dismissed.

¶56

sd S.V.BHATTI, JUDGE

¶57

sd BASANT BALAJI, JUDGE

¶58

dl/

¶59

OT.REV NO. 21 OF 2020

¶60

-9-

¶61

APPENDIX OF OT.REV 21/2020

¶62

PETITIONER ANNEXURES

¶63

ANNEXURE A A TRUE COPY OF THE NOTICE IN FORM 17A DATED 17.3.2016 ISSUED BY THE INTELLIGENCE INSPECTOR UNDER SECTION 47(2) OF THE KVAT ACT. ANNEXURE B A TRUE COPY OF THE PENALTY ORDER NO.OR32/2016-17 DATED 20.11.2016 PASSED BY THE INTELLIGENCE OFFICER. ANNEXURE C A TRUE COPY OF THE FIRST APPELLATE ORDER IN KVATA NO.1418/17 DATED 16.2.2018. ANNEXURE D TRUE COPY OF THE ORDER PASSED BY THE KERALA VALUE ADDED TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, KOZHIKODE IN TA (VAT) NO.967/2018 DATED 16.4.2019.

The State of Kerala v. Steel Emporium

Case brief

What is this about?

What did the court decide?

The State of Kerala v. Steel Emporium

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

Similar cases

The Principal Commissioner of Central Tax / Central Excise, Vs M/S. South Indian Bank

The Pricipal Commissioner of Central Tax & Central Excise, Vs South Indian Bank

The State of Kerala Vs Sri. Abdulla Shafi

State of Kerala Vs M/S Agreenco Fibre Foam (P) Ltd.

State of Kerala Vs M/S.Agreenco Fibre Foam (P) Ltd.

The State of Kerala Vs Steel Emporium