IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC WEDNESDAY, THE 30TH SEPTEMBER 2009 / 8TH ASWINA 1931 WP(C).No. 2251 of 2007(R) ------------------------- PETITIONER(S): --------------- SUTHAR KHIMRAJ, RAJADHANI COLLECTIONS, MARKET ROAD, ERNAKULAM. BY ADV. SRI.R.MURALIDHARAN (AROOR) RESPONDENT(S): --------------- 1. THE INTELLIGENCE OFFICER (INVESTIGATION BRANCH), COMMERCIAL TAXES, ERNAKULAM. 2. THE DEPUTY COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM. 3. THE COMMISSIONER OF COMMERCIAL TAXES, THIRUVANANTHAPURAM. BY SPL GOVT PLEADER SRI. PRADEEP THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 30/09/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX Ext.P1. True copy of the final assessment order passed by the Asst. Commissioner(Assmt)-III, Special Circle-II, Ernakulam dt. 28.1.2004. Ext.P2. True copy of the Penalty Order passed by the Ist respondent dated 12.5.2005. Ext.P3. True copy of the order passed by the 2nd respondent in STRP.151/2005 dt.22.03.2006 Ext.P4. True copy of the order passed by the 3rd respondent I the revision petitions dated 19.12.2006. // true copy // P.A to Judge. ANTONY DOMINIC,J. --------------------- W.P.(C).No.2251 OF 2007 ------------------------ Dated this the 30th day of September, 2009. JUDGMENT Petitioner is a dealer in textiles and readymades. Ext.P1 is the order of assessment for the Assessment Year 2002-03 by which assessment was completed accepting the accounts of the petitioner. 2. Subsequently, penalty proceedings were initiated against the petitioner under Section 45A of the KGST Act and after enquiry, penalty of Rs.14,16,000/- was imposed by Ext.P2 order. Petitioner preferred a revision before the Deputy Commissioner. The revisional authority passed Ext.P3 order limiting the turn over of the petitioner at Rs.69,83,614/- and refixing the penalty at Rs.10,62,000/-. This was treating 25% of the turn over as textile sales exempted from tax. Further revision filed before the Commissioner was rejected by Ext.P4 order. It is challenging Exts.P2 to P4 the writ petition is filed. WP(c).No.2251/07 2 3. Counsel for the petitioner contends that the levy of penalty was totally unwarranted and that the grounds on which the penalty has been levied and confirmed against him are baseless. However, a reading of the orders shows that the notices issued to the dealers from whom the petitioner is alleged to have purchased the readymade articles were returned with the postal endorsement `not known'. It is also seen that the petitioner could not produce proof of movement of goods to Kerala from outside State and also the details or evidence regarding the payments made to the alleged suppliers or their agents. Not only that the aforesaid documents were not produced, the petitioner in fact confessed the nonavailability of any such documents. 4. The investigation conducted also revealed that the accounts maintained by the petitioner were also not correct in as much as many of the transactions shown in the petitioner's books of accounts and day books were not reflected in the books of account maintained by the dealers and vice versa. Since the factual details are shown in Ext.P2 order passed by the first respondent, those details are not reiterated in this judgment. It was on account of all this that the first respondent held that readymade goods purchased were from WP(c).No.2251/07 3 unaccounted sources and the dealer sold it unaccounted with the willful intention to evade tax. On this ground concluding that the fraudulent, contumacious and blameworthy act of the dealer deserves maximum penalty of Rs.14,16,000/-, being double the amount of tax, levied on the petitioner. Revisional orders are Exts.P3 and P4 and these orders show that revisional authorities are also dealt with the details and the first revisional authority has in fact reduced the penalty. 5. Having gone through Exts.P2 to P4 orders, I am not persuaded to held that, the concurrent conclusion that tax was attempted to be evaded, calls for any interference. However, a reading of the orders show that no circumstances have been shown by the respondents to impose maximum penalty, of double the amount of tax. A reading of Section 45A shows that double the amount indicated in the section is the upper limit and it is for the adjudicating authorities to exercise the discretion and pass appropriate order on the penalty to be levied on the dealer. In this case, on facts I am satisfied that there is no justification to impose maximum penalty . Therefore I direct that the penalty levied shall be limited to the tax payable and interest thereon. WP(c).No.2251/07 4 6. It is submitted by the petitioner that he has already paid Rs.6 lakhs towards the liability under Exts.P2 to P4. Limiting the penalty as above, if the payment already made by the petitioner is in excess, the excess amount will be refunded to the petitioner. On the other hand, if any further amount is due from the petitioner it will be open to the respondents to realise the same. Writ Petition is disposed of as above. (ANTONY DOMINIC) JUDGE vi/