IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR THURSDAY, THE 19TH JUNE 2008 / 29TH JYAISHTA 1930 WP(C).No. 11047 of 2005(M) -------------------------- PETITIONER: ------------ P.V.POULOSE, CONTRACTOR, PUTHEN VEETTIL HOUSE, CHOTTANIKKARA. BY ADV. DR.K.B.MUHAMED KUTTY (SR.) SRI.K.M.FIROZ RESPONDENTS: ------------- 1. THE INTELLIGENCE OFFICER, INVESTIGATION BRANCH, MATTANCHERY COMMERCIAL TAXES, PALARIVATTOM. 2. THE COMMISSIONER, COMMERCIAL TAXES, THIRUVANANTHAPURAM. BY G.P. SRI.TEKCHAND THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19/06/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX PETITIONER'S EXHIBITS: P1: TRUE COPY OF PENALTY ORDER FOR THE YEAR 1996-97 DT.20.5.2002. P2: .DO. 1997-98 DT.22.6.2002. P3: TRUE COPY OF REVISIONAL ORDER PASSED BY FIRST REVISIONAL AUTHORITY DT.17.12.2002 FOR THE YEAR 1996-97. P4: .DO. 1997-98. P5: .DO. BY SECOND REVISIONAL AUTHORITY DT.29.9.2004. TRUE COPY PA TO JUDGE C.N.RAMACHANDRAN NAIR, J. .................................................................... W.P.(C) No.11047 of 2005 .................................................................... Dated this the 19th day of June, 2008. JUDGMENT Heard counsel for the petitioner and Government Pleader. The case of the petitioner is that levy of penalty under Section 45A of the KGST Act for the assessment years 1996-97 and 1997-98 is arbitrary because there was no evasion of tax on the side of the petitioner. Counsel for the petitioner contended that tax is levied on contract receipts from Railways. Even though petitioner was not registered, Railways has not recovered the tax from the bills and remitted the same. However, petitioner later took registration under the KGST Act and remitted the tax, though with delay, with interest under the amnesty scheme. Admittedly penalty is not levied on the Railways for releasing payment without deduction of tax. In the normal course, awarder is subjected to penalty because the contractor is not responsible for releasing payment without deduction of tax. Since there is no evasion of tax and the tax stands paid with interest, I feel there is a case for further reduction of penalty. Accordingly Ext.P5 is modified by reducing the penalty to rupees twenty five thousand for the year 1996-97 and rupees fifteen thousand for 1997-98. However, if benefit under 2 amnesty scheme for settlement of penalty is lesser than these amounts, the petitioner is free to opt for that scheme and settle liability. C.N.RAMACHANDRAN NAIR Judge pms