IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR MONDAY, THE 17TH DECEMBER 2007 / 26TH AGRAHAYANA 1929 OP.No. 7779 of 2001(A) ---------------------- PETITIONER: ------------ P.K.SHAHUL HAMEED, PROPRIETOR, M/S.EMPIRE MACHINE TOOLS, KALATHODE, THRISSUR. BY ADV. SRI.C.K.THANU PILLAI SRI.T.K.SHAIJ RAJ RESPONDENTS: ------------- THE ADDITIONAL SALES TAX OFFICER I, SALES TAX OFFICE, FIRST CIRCLE, THRISSUR. BY GOVERNMENT PLEADER SRI.PRADEEP THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 17/12/2007, THE COURT ON 17/12/2007 DELIVERED THE FOLLOWING: ORDER ON CMP NO.12679/2001 IN O.P. NO.7779/2001 DISMISSED: 17.12.2007 SD/-(C.N.RAMACHANDRAN NAIR, JUDGE.) APPENDIX PETITIONER'S EXHIBITS: P1: TRUE COPY OF ORDER NO.O.P. 384/96 DT.28.10.1997 OF THE COURT OF CONSUMER DISPUTES REDRESSAL FORUM, MALAPPURAM. P2: TRUE COPY OF ORDER NO.2511/95-96 DT.29.12.1999 OF THE RESPONDENT. P3: TRUE COPY OF REPLY DT.20.12.99 FILED BY PETITIONER BEFORE THE REPSONDENT. P4: TRUE COPY OF ORDER NO.2511 2278/95-96 DT.21.1.2000 OF THE RESPONDENT. TRUE COPY PA TO JUDGE C.N.RAMACHANDRAN NAIR, J. .................................................................... O.P. No.7779 of 2001 .................................................................... Dated this the 17th day of December, 2007. JUDGMENT The petitioner is challenging Ext.P4 order whereunder the Assessing Officer has levied penalty under Section 45A of the KGST Act for evasion of sales tax for the year 1995-96. Even though a revision is maintainable against Ext.P4 order, petitioner approached this court directly on the ground that penalty order issued is arbitrary and without any jurisdiction. Counsel for the petitioner relied on judgment of this court in VARKEY & CO. V. SALES TAX OFFICER (1999(2) KLT 430 wherein this court has held that penalty cannot be levied in cases where compounding is made under Section 47 of the KGST Act. However, Government Pleader submitted that the said judgment is overruled in W.A. No.1736/1999 on 21.11.2005 2. I have gone through the impugned order Ext.P4 and the assessment order produced as Ext.P2. Section 47 of the KGST Act provides for composition of offence provided under the Act which are dealt with in Section 46 of the Act. Moreover, composition under Section 47 is complete on payment of compounding fee along with tax payable. In this case it is seen that even though bill was recovered from the purchaser for the 2 machinery purchased from the petitioner, petitioner suppressed the sale and on detection he admitted the suppression and remitted compounding fee of Rs.18,500/-. However, petitioner later backed out of the admission and denied the transaction in the assessment proceedings. In other words, even after admission of the offence and remittance of compounding fee, petitioner refused to pay tax on the transaction and is contesting the demand of tax which is evident from the assessment. Petitioner cannot back out of the admission given in the compounding application and therefore, the contest against assessment is not complete. In the circumstances, the officer had no choice but to proceed against the petitioner for levying penalty under Section 45A of the Act. Even in the course of penalty proceeding, petitioner was not willing to reconfirm the suppression admitted by him in the compounding application or remit the tax with interest to avoid penalty. These are the findings in the assessment order and the penalty order. Since petitioner himself admitted suppression and remitted compounding fee, there is no need to look into any other evidence or conduct any enquiry to prove the fact admitted by the petitioner. The fact is deliberate non-payment of tax for which penalty is the only remedy. No mitigating circumstance is made out except the compounding which is now challenged by the petitioner by filing appeal against assessment. In the 3 circumstances, the penalty levied vide Ext.P4 is upheld and the O.P. is consequently dismissed. C.N.RAMACHANDRAN NAIR Judge pms