IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 5TH AUGUST 2011 / 14TH SRAVANA 1933 WP(C).No. 16944 of 2003(P) ---------------------------------- PETITIONER(S): ------------------- M/S. AYDEE SYNDICATE, RICE BAZAR, THRISSUR. REPRESENTED BY M.D.ANTONY, MANAGING PARTNER. BY ADV. SRI.JOSE JOSEPH RESPONDENT(S): --------------------- 1. THE ASST. COMMISSIONER (ASSMT.)III, COMMERCIAL TAXES, SPECIAL CIRCLE, THRISSUR. 2. THE DEPUTY COMMISSIONER, COMMERCIAL TAXES, THRISSUR. 3. THE COMMISSIONER OF COMMERCIAL TAXES, PUBLIC OFFICE BUILDING, THIRUVANANTHAPURAM. BY GOVT.PLEADER SRI.V.K.SHAMSUDHEEN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 05/08/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: svs W.P.(C). NO. 16944/2003 APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF ORDER OF 1ST RESPONDENT IMPOSING PENALTY DATED 30/11/1998. P2: COPY OF ORDER OF THE 2ND RESPONDENT IN STRP 12/99. DATED 16/08/1999. P3: COPY OF ORDER OF THE 3RD RESPONDENT DATED 17/08/2002. RESPONDENT'S EXHIBITS: NIL /TRUE COPY/ P.A. TO JUDGE. svs P.R.RAMACHANDRA MENON, J. ------------------------------------------- W.P.(C) No.16944 of 2003 ---------------------------------- Dated this the 5th day of August 2011 J U D G M E N T The assessee is before this Court challenging the correctness and sustainability of the order imposing penalty under Sec.45A of the KGST Act. 2. The sequence of events narrated in the writ petition shows that the petitioner, a rice dealer, was assessed in respect of the year 1994-'95. The Assessing Authority rejected the returns and books of accounts and completed the assessment on 'best judgment' basis. It appears that the Assessing Authority computed the tax element referring to suppression stated as made by the dealer, which however is stated as having undergone some modification in the appeal, as to the quantum of tax payable. 3. The case in the writ petition is that, pursuant to W.P.(C) No.16944 of 2003 -: 2 :- the steps taken by the concerned authority, ie; the first respondent, a penalty to the tune of `23,322/- was imposed upon the petitioner as per Ext.P1 order dated 30.11.1998. The petitioner took up the matter in revision under Sec.45A of the Act before the 2nd respondent, who set aside the impugned order passed by the first respondent. The said order dated 16.8.1999 (Ext.P2) was sought to be reviewed 'suo-motu' by the 3rd respondent/revisional authority, invoking the power vested under Sec.37 of the KGST Act. As per Ext.P3 order, the 3rd respondent set aside Ext.P2 order passed by the first revisional authority and restored the original order passed by the first respondent, which forms the subject matter of challenge in this writ petition. 4. Heard learned Government Pleader as well. 5. On going through the materials on record, particularly the contents of Ext.P3, it is seen that, in the course of steps taken by the 3rd respondent to have suo- W.P.(C) No.16944 of 2003 -: 3 :- motu revision, notice was issued to the petitioner/dealer who however sought for several adjournments. In spite granting the adjournments, the party did not appear for hearing before the said authority; nor did he file any objection as to the cause of action proposed. It was in the said circumstance, that the case was disposed of on the basis of available materials on record, as clearly observed in paragraph 2 and 3 of Ext.P3, which read as follows :- “The Asst. Commissioner (Asst.), Special Circle, Thrissur had imposed on the dealer a penalty of Rs.23,322/- under section 45A of the KGST Act for suppression of taxable turnover in his order No.25010469/94-95 dated 30.11.1998. This was taken up in revision before the Deputy Commissioner. The assessment had been completed on a best judgment basis, which according to the Deputy Commissioner, is not sustainable. He therefore took the view that the penalty following from such an assessment is also not sustainable, and cancelled the penalty. Subsequently the Asst.Commissioner, Assessment requested for suo motu revision of the case, as the dealer had paid the entire tax due as per the best of judgment assessment and the court rulings relied upon by the Deputy Commissioner for his decision are not applicable. W.P.(C) No.16944 of 2003 -: 4 :- A notice proposing to set aside the order of the Deputy Commissioner and to restore the order of the assessing authority was therefore issued to the dealer. Though the dealer had requested for and was granted a number of adjournments he did not appear for hearing or file objections. The case is therefore disposed of on merits.” After considering the materials on record as above, the 3rd respondent arrived at a finding in the following terms :- “From the records of the case, I find that the dealer had not been maintaining any stock records showing daily purchases and sales or any separate accounts of taxable and non taxable sales. No reasons have been furnished for the loss claimed in respect of taxable sales. In the absence of any explanation it is not possible to accept the claim that non taxable sales of the same commodity would generate a substantial profit, whereas taxable sales result in a substantial loss. Apart from this, it is also pertinent to note that the dealer has not challenged the assessment made for the year, and has paid the entire tax due as per that assessment. The materials available show clearly that the dealer has not maintained true and complete accounts and that he had filed untrue and incorrect returns. Thus the dealer is liable to penalty under section 45A of the Act. Under these circumstances, the finding of the Deputy Commissioner that the best judgment assessment is not warranted in this case is prejudicial to revenue.” W.P.(C) No.16944 of 2003 -: 5 :- Accordingly, the revision was finalised, setting aside Ext.P2 and restoring Ext.P1. Going by the contents of the said order, this Court finds that, the findings arrived at by the 3rd respondent is based on the materials on record. The petitioner did not have any case as now projected in the writ petition, before the said authority, as he did not turn up, despite the several adjournments given, as seen from the 3rd paragraph of Ext.P3 order. In the above circumstance, this Court finds that nobody else can be blamed for the lapses on the part of the petitioner and no interference is warranted. The writ petition fails and the same is dismissed accordingly. P.R. RAMACHANDRA MENON, JUDGE. Jvt