IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR FRIDAY, THE 22ND FEBRUARY 2008 / 3RD PHALGUNA 1929 OP.No. 35706 of 2000(A) ----------------------- PETITIONER: ------------ MOHAMMED HASSAN, S/O.ABUBAKER, AGED 65 YEARS, PROPRIETOR, KERALA TRADING COMPANY, VRINDAVAN LANE, CHALAI, TRIVANDRUM. BY ADV. SRI.ABRAHAM MATHEW (VETTOOR) RESPONDENTS: ------------- 1. STATE OF KERALA REP. BY THE SECRETARY TO GOVERNMENT, DEPARTMENT OF COMMERCIAL TAXES, TRIVANDRUM. 2. THE ADDITIONAL SALES TAX OFFICER, 2ND CIRCLE, TRIVANDRUM. 3. THE DISTRICT COLLECTOR, COLLECTORATE, VANCHIYOOR, TRIVANDRUM. 4. THE TAHSILDAR, (REVENUE RECOVERY), TALUK OFFICE, TRIVANDRUM. BY GOVERNMENT PLEADER SRI.K.P.PRADEEP THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 22/02/2008, ALONG WITH OP NO.16669 OF 2000, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ORDER ON CMP NO.60961/2000 IN OP NO.35706/2000 DISMISSED: 22.2.2008 SD/-(C.N.RAMACHANDRAN NAIR, JUDGE.) APPENDIX PETITIONER'S EXHIBITS: P1: TRUE COPY OF NOTICE U/S.19 OF THE KGST ACT 1963 TO R2 ISSUED BY PETITIONER DT.23.10.97. P2: TRUE COPY OF REPLY GIVEN BY PETITIONER TO R2 DT.3.11.97. P3: TRUE COPY OF ASSESSMENT ORDER U/S.19 OF THE ACT ISSUED BY R2 TO THE PETITIONER DT.10.11.97. P4: TRUE COPY OF NOTICE U/S.19 OF THE ACT ISSUED BY R2 TO PETITIOENR DT.5.12.97. P5: TRUE COPY OF REPLY TO EXT.P4 ISSUED BY PETITIONER TO R2 DT.26.12.97. P6: TRUE COPY OF REVISED ORDER U/S.19(3) OF THE ACT ISSUED BY R2 TO THE PETITIONER DT.29.12.97. P7: TRUE COPY OF NOTICE ISSUED BY R2 TO THE PETITIONER DT.5.12.97. P8: TRUE COPY OF REPLY TO EXT.P7 ISSUED BY PETITIONER TO R2 DT.26.12.97. P9: TRUE COPY OF REVISED ASSESSMENT ORDER ISSUED BY R2 TO THE PETITIONER DT.29.12.97. P10: TRUE COPY OF MEMORANDUM OF APPEAL FILED AGAINST EXT.P3 ORDER OF ASSESSMENT DT.9.1.98. P11: .DO. P6 .DO. DT.2.3.98. P12: .DO. P9 .DO. P13: TRUE COPY OF APPELLATE ORDER ISSUED BY R3 TO THE PETITIOENR DT.1.1.2000. P14: TRUE COPY OF ARTICLE PUBLISHED IN THE TAMIL NADU WEEKLY. P14(a): TRUE COPY OF MALAYALAM TRANSLATION OF THE RELEVANT PORTIONS OF EXT.P14. P15: TRUE COPY OF NEWS APPEARED IN THE MATHRUBHOOMI DAILY DT.24.4.95. P16: .DO. MALAYALA MANORAMA DAILY DT.1.4.95. P17: TRUE COPY OF DEMAND NOTICE DT.15.11.2000. P18: .DO. .DO. P19: TRUE COPY OF OBJECTION DT.9.12.2000. TRUE COPY PA TO JUDGE C.N.RAMACHANDRAN NAIR, J. .................................................................... O.P. Nos.35706/2000 & 16669/2001 .................................................................... Dated this the 22nd day of February, 2008. JUDGMENT Heard counsel for the petitioner and the Government Pleader. In one O.P. petitioner is challenging penalty levied under Section 45A of the KGST Act and partly sustained by the Deputy Commissioner in first revision for the assessment years 1993-94 and 1994-95. In the other O.P., petitioner is challenging revised assessment orders issued under the KGST Act for the assessment years 1992-93, 1993-94 and 1994-95. The petitioner, a dealer in cement in Kerala, issued C forms for purchase of cement from Tamil Nadu Cement Corporation which is a Government of Tamil Nadu undertaking. However, on checking the transactions covered by C Forms, the department noticed that petitioner has not accounted purchase or sales in Kerala. Consequently assessment was revised under Section 19 and penalty was levied under Section 45A of the KGST Act. Even though petitioner has remedy by way of appeal against assessments and second revision against penalty order, I do not think it is fair on the part of this court to direct the petitioner to pursue statutory remedies after admitting the O.Ps. and keeping it pending in this court for 7 to 8 years. 2 Therefore, I proceed to decide the matter on merits. 2. The contention of counsel for the petitioner is that petitioner has accounted the actual purchases and the transactions covered by C Forms do not represent purchases made by the petitioner. However, Government Pleader produced copies of C Forms obtained from the supplier in this court which show that reverse side of C Forms contain particulars of sale bills and petitioner has signed the C Forms issued to the supplier. The petitioner also is not disputing the fact that C Forms were issued to him by the Department in 1985 and were issued by him to the supplier outside Kerala. Since the C Forms were issued by the Department to the petitioner and since petitioner has signed the C Forms, there is certainly a presumption of correctness of the contents therein. Even though counsel contended that petitioner was not given opportunity to cross-examine the supplier and to verify transport details with the Check Post records, I do not think any of these are required for the purpose of assessment because the Assessing Officer is entitled to assume correctness of the contents of the C Forms signed by the petitioner. Strangely, the petitioner has not produced the original C Forms before the Assessing Officer to establish that the contents were different from what are there in the duplicate copy of the C Forms. Since assessment is based on contents of C Forms issued by the petitioner, there is no scope for interference with revised assessment orders demanding tax on the escaped turnover. However, so far as penalty is concerned, I feel 3 leniency is called for, for more than one reason. In the first place, department has not verified Check Post records to verify whether transactions covered by C Forms are entered therein. Moreover, pattern of payment for the goods purchased was not examined by the department. In any case I do not think there is any scope for ordering further enquiry because department obviously will not be able to trace Check Post records which are now around 15 years old. In the circumstances, I feel petitioner is entitled to benefit of doubt. Therefore, I cancel the penalty levied on the petitioner for both the years 1993-94 and 1994-95 and waive 40% of the interest based on the amnesty benefit granted during 2004 when the O.Ps. were pending and stay was in force, but on condition that petitioner clears arrears of tax for the three years with 60% interest thereon till date of payment on or before 30.5.2008. However, if payment of tax is not made as above, the waiver of interest granted herein will stand cancelled and respondents will proceed for recovery of the entire arrears of tax with full interest. The O.Ps. are disposed of as above. C.N.RAMACHANDRAN NAIR Judge pms