IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN THURSDAY, THE 15TH OCTOBER 2009 / 23RD ASWINA 1931 ST.Rev..No. 183 of 2009() ------------------------- TA.21/2009 of S.T.A.T.ADDL.BENCH,TVM. .................... REVISION PETITIONER/APPELLANT/ASSESSEE ---------------------------------------------------------- I.VARGHESE, PRINCE RUBBER TRADERS, KUNNICODE. BY ADV. SRI.S.ANIL KUMAR (TRIVANDRUM) RESPONDENT(S): RESPONDENT/REVENUE --------------------------------- STATE OF KERALA, REPRESENTED BY THE COMMISSIONER OF COMMERCIAL TAXES, THIRUVANANTHAPURAM - 695 033. BY G.P. SRI. MOHAMMED RAFIQ THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 15/10/2009, ALONG WITH WPC NO. 20014 OF 2007 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & V.K. MOHANAN, JJ. -------------------------------------------- S. T. Rev. No. 183 OF 2009 & W.P.C. No. 20014 OF 2007 -------------------------------------------- Dated this the 15th day of October, 2009 JUDGMENT Ramachandran Nair, J. Connected Tax Revision Case and the Writ Petition filed by the very same person pertain to his sales tax assessment confirmed by the Tribunal for the assessment year 2003-04 and the penalty order for the very same year issued by the Intelligence Officer confirmed in second revision by the Commissioner. We have heard senior counsel Dr. K.B. Mohamedkutty appearing for the petitioner in the WPC, Sri. S. Anil Kumar, counsel appearing for the petitioner in the connected ST Rev. and Government Pleader rperesenting respondents in both the cases. 2. After hearing both sides, we are not inclined to interfere with the findings of the statutory authorities with regard to evasion practised by another dealer with the active assistance of the petitioner. The department on enquiry found that the dealer located in the border area of Thiruvananthapuram District was engaged in smuggling of rubber 2 from out of Kerala evading payment of tax on rubber which during the year was at the point of last purchase in the State. On enquiry, it was found that the dealer closed the principal place of business in Kerala but was maintaining a Branch outside Kerala border sales tax checkpost. With the assistance of the petitioner herein, he accounted unaccounted inter-State sale of rubber made as local sales to the petitioner, is the case of the department. Petitioner issued statutory declaration in Form No. 25 in respect of bogus purchases of around about 200 tonnes valued at Rs. 95,55,800/-. In fact, if transactions are genuine, then the goods should have reached the petitioner from the supplier's place after crossing the border checkpost and the transport documents would have contained border checkpost seal. Petitioner could not prove the genuineness of the transactions by furnishing details of receipt of goods physically or the details of payments for the goods accounted as purchases from the said dealer at Thiruvananthapuram. We are in complete agreement with the findings of the Tribunal and the Commissioner of Commercial Taxes in regard to bogus transactions accounted by the petitioner, which facilitated unaccounted purchase and sale by another dealer in the State. In 3 principle, therefore we uphold the rejection of books of accounts and estimation of turnover for assessment and levy of penalty under Section 45A(h) for abetment of evasion of tax. 3. The next question to be considered is the quantum of addition in regard to turnover and the penalty levied for abetment of the offence of evasion of tax. Section 45A provides for maximum penalty at double the amount of tax sought to be evaded. In this case, the maximum penalty levied is confirmed by the Commissioner in revision proceedings. In the assessment the addition sustained is twice the value of the bogus transactions and since the petitioner already accounted bogus purchases, the total addition is actually three times the purchase value of the bogus transactions. In other words, for the manipulation done by the petitioner in effect, the total amount payable, that is tax and penalty, is five times the tax actually due on the value of the quantity. Since no action is taken against the dealer at Thiruvananthapuram, who accounted bogus sales to the petitioner, and against those who accounted bogus purchases from the petitioner, we feel quantum reduction can be given to the petitioner. Accordingly, we dispose of the S.T. Revision by modifying the 4 order of the Tribunal by reducing the addition to one time of the suppression to with declared turnover which would mean that the total addition of suppression including bogus purchases accounted will be twice the value of suppression as against three times sustained by the Tribunal. Similarly, for the penalty case, we reduce the penalty to equal amount of tax on the suppressed turnover as against two times the tax fixed by the Intelligence Officer and confirmed by the Commissioner. S.T. Revision and WPC are disposed of granting relief as above. The assessing officer and the Intelligence Officer are directed to modify the order as above for settlement of liability under Amnesty Scheme with reference to modified demands. (C.N.RAMACHANDRAN NAIR) Judge. (V.K. MOHANAN) Judge. kk 5