IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY THURSDAY, THE 23RD JUNE 2011 / 2ND ASHADHA 1933 ST.Appl..No. 4 of 2009() ------------------------ AGAINST THE ORDER DATED 23/07/2009 IN R3 39667/06/TX&R3 43285/06/TX IN R3.39667/2006 of COMMR. OF COMMERCIAL TAXES, TRIVANDRUM .................... APPELLANT / ASSESSEE: ----------------------------- M/S.OMEGA PETRO PRODUCTS (P) LTD., G.T.TOWERS, KESAVADASAPURAM, THIRUVANANTHAPURAM REPRESENTED BY ITS MANAGING DIRECTOR, CYRIAC JOSEPH. BY ADV. SRI.S.SANTHOSH KUMAR RESPONDENT(S): REVENUE; ----------------------- STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. MR.MOHAMMED RAFEEQ, GOVERNMENT PLEADER THIS SALES TAX APPEAL HAVING BEEN FINALLY HEARD ON 23/06/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: STA NO.4/2009 APPENDIX APPELLANT'S EXHIBITS ANNEXURE-A : COPY OF LETTER DATED 29/10/2001 SENT BY THE APPELLANT TO THE ADDL.SALES TAX OFFICER, III CIRCLE, KOLLAM. ANNEXURE-B : COPY OF NOTICE NO.IBM.V/19/2000-01 DATED 09/12/2004 OF THE INTELLIGENCE OFFICER (IB), MATTANCHERRY. ANNEXURE-C : COPY OF LETTER DATED 18/12/2004 SUBMITTED BY THE APPELLANT. ANNEXURE-D : COPY OF ORDER DATED 24/01/2005 OF THE INTELLIGENCE OFFICER (IB), MATTANCHERRY. ANNEXURE-E : COPY OF ORDER DATED 11/08/2006 OF THE DEPUTY COMMISSIONER, COMMERCIAL TAXES, KOLLAM. ANNEXURE-F : COPY OF NOTICE DATED 26/09/2007 ISSUED BY THE COMMISSIONER OF COMEMRCIAL TAXES, THIRUVANANTHAPURAM. ANNEXURE-G : CERTIFIED COPY OF ORDER DATED 23/07/2009 OF THE COMMISSIONER OF COMMERCIAL TAXES, THIRUVANANTHAPURAM. //TRUE COPY// PA TO JUDGE. jg C.N.RAMACHANDRAN NAIR & BHABANI PRASAD RAY, JJ. ---------------------------------- S.T.Appeal No.4 of 2009 --------------------------------- Dated, this the 23rd day of June, 2011 J U D G M E N T Ramachandran Nair, J. Heard learned counsel for the appellant and learned Government Pleader for the State. 2. Challenge is against the order of the Commissioner of Commercial Taxes issued in suo motu revision proceedings restoring the penalty originally levied at double the amount of tax by reversing the first revisional authority's order reducing penalty to equal amount of tax. Even though learned counsel for the appellant contended that the Commissioner was not justified in exercising suo motu revisional power to deny the partial relief granted by the first revisional authority, we are unable to accept the contention because from the facts available on record, it is seen that the appellant made major manipulations in the accounts to show first sales, which are S.T.Appeal No.4/2009 -2- taxable, as second sales. In fact, even though after notice the appellant has filed return declaring taxable turn over, the appellant did not pay full amount of tax admitted by him. The manipulation in accounts is established with evidence and the Commissioner has also stated instances where the appellant produced purchase bills obtained from a dealer who has closed business shortly after issuance of the same and has in fact accounted purchases made in the succeeding year as relatable to this year. It is seen that the Commissioner has furnished details of the parties with quantity and value of the goods accounted as purchases by the appellant in collusion with them to evade payment of tax. The first revisional authority granted relief merely because the appellant filed revised return and remitted tax after receipt of penalty notice. What is proved from this conduct is that but for the inspection that led to penalty, the appellant would have evaded massive amount of tax due from him, which is over Rs.11 lakhs. We, therefore hold that the Commissioner was perfectly justified in S.T.Appeal No.4/2009 -3- invoking suo motu revisional powers to restore the penalty particularly because the first revisional authority has not taken into account the above proved facts. Learned counsel for the appellant submitted that the appellant suffered heavy loss and closed down the business in the succeeding year. Considering the fact that the appellant has closed the business and since tax on the disputed turnover is later paid, we allow the appeal by modifying the penalty to 1½ times of tax as against two times levied by the Officer and confirmed by the Commissioner. This Sales Tax Appeal is allowed as above. (C.N.RAMACHANDRAN NAIR, JUDGE) (BHABANI PRASAD RAY, JUDGE) jg