IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY MONDAY, THE 17TH JANUARY 2011 / 27TH POUSHA 1932 ST.Rev..No. 218 of 2010() ------------------------- AGAINST ORDER IN TA.185/2009 of S.T.A.TRIBUNAL,ADDL.BENCH,PALAKKAD .................... REVISION PETITIONER / APPELLANT --------------------------------------- M/S.WHIRLPOOL OF INDIA LIMITED, BLDG.NO.18/10A, ST.JOSEPH'S MINOR SEMINARY, COCHIN UNIVERSITY P.O, COCHIN-682 022. BY ADV. SMT.K.LATHA RESPONDENT(S): / RESPONDENT --------------- THE STATE OF KERALA. THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 17/01/2011, ALONG WITH STRV NO. 219 OF 2010 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & BHABANI PRASAD RAY, JJ. ---------------------------------- S.T.Rev.Nos.218 & 219 of 2010 --------------------------------- Dated, this the 17th day of January, 2011 J U D G M E N T Ramachandran Nair, J. These two cases are filed by the assessee challenging the penalty levied for alleged evasion of tax in respect of sale of refrigerators made for Coco-Cola India Limited. Goods were detained and penalty levied on alleged undervaluation, and for want of proof that the goods sold were on discounted price. The assessee's case is that 35 numbers of refrigerators transported by one vehicle and another 38 numbers of refrigerators transported by another vehicle were made for Hindustan Coco-Cola Ltd., and the supply was against bulk orders issued by the purchaser for distribution on national level. According to the assessee, based on an agreement between them and the Coco Cola Company Ltd., specific type of refrigerators, which are only coolers, were manufactured and despatched to various States, wherefrom sales were made to dealers of Coco-Cola Company Limited. To our query, S.T.Rev.Nos.218 & 219 of 2010 -2- learned counsel for the assessee clarified that these refrigerators do not have freezing zones and these are used only for cooling purpose. 2. After hearing both sides, we feel if what is stated by the assessee is true, then there is no case for levying penalty against them because refrigerators seen used in soft drink shops are not ordinary refrigerators but are only coolers. Unfortunately, the Inspecting Officer did not inspect the products under transport and strangely the assessee also did not ask for inspection of the products, and if this was done, the assessee could have convinced the Department that the products are not ordinary refrigerators and are products manufactured in bulk for the same company. 3. Since facts are wanting, we feel the matter should be reconsidered by the Tribunal along with Assessment Appeals which are stated to be pending before the Tribunal for the very same year, i.e. 2002-2003. In our view, the Tribunal should order physical verification of the products in the outlets of soft drink dealers and the inspection report will reveal the type of products and justification for lower value at which it is sold by the assessee. If S.T.Rev.Nos.218 & 219 of 2010 -3- supplies are against bulk orders and the products are not ordinary refrigerators, then, there is no justification for making additions on the turn over or levying penalty on the ground of undervaluation. Based on the details of marketing done by the assessee, the Intelligence Wing can conduct inspection and identify the products and it's use, and verify whether it has freezing zone like ordinary refrigerators, and if not, include the same also in the report, for the Tribunal to decide the appeals. Since further enquiry and verification are required, the Revision cases are allowed vacating the orders of the Tribunal and we restore the appeals back to the Tribunal for fresh hearing and decision along with Assessment Appeals pending for the same year. Even though there is allegation in the finding by the authorities including the Tribunal that rate of tax applied is also not correct, the pettioner's counsel has denied the same referring to Annexures A1 & A3 produced in ST.Rev.No.218/2010. According to her, tax at the applicable rate is collected by the petitioner. But we feel the Tribunal should be directed to look into the rate of tax applicable on the product and to decide on this dispute also. Therefore, there will S.T.Rev.Nos.218 & 219 of 2010 -4- be a direction to that effect. Both the assessee and the Department will furnish more details as stated above to assist the Tribunal to decide the case afresh. (C.N.RAMACHANDRAN NAIR, JUDGE) (BHABANI PRASAD RAY, JUDGE) jg