IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN WEDNESDAY, THE 10TH AUGUST 2011 / 19TH SRAVANA 1933 ST.Rev..No. 76 of 2011() ------------------------ TA.218/2009 of S.T.A.T.ADDL.BENCH,ERNAKULAM .................... REVISION PETITIONER/RESPONDENT IN THE APPEALS -------------------------------------------------------- M/S.THOMAS KING ELECTRONICS, SARAPHIN BUILDING, II FLOOR, PUNNATH TEMPLE ROAD, KADAVANTHARA, KOCHI-682 020, REP. BY ITS PROPRIETOR MATHEW PADAMADAN. BY ADV. SRI.K.J.ABRAHAM RESPONDENT/APPELLANT ------------------------ STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM-695 001. BY G.P. SRI.MOHAMMED RAFEEQ THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 10/08/2011, ALONG WITH STRV NOS.77&78 OF 2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX (STRV 76/2011) ANNEXURE I: TRUE COPY OF ORDER NO.IBE.IV/OR.5/05-06 DT.11.5.2005 PASSED BY THE INTELLIGENCE OFFICER (IB), ERNAKULAM. ANNEXURE II: TRUE COPY OF ORDER NO.23173066/02-03 DT.6.12.2005 PASSED BY THE SALES TAX OFFICER, I CIRCLE, KALAMASSERY AT EDAPPILLY. ANNEXURE III: COMMON ORDER IN STRP 1644 DT.9.1.2009 PASSED BY THE DEPUTY COMMISSIONER(APPEALS), COMMERCIALTAXES, ERNAKULAM. ANNEXURE IV: THE ORIGINAL ORDER DT.30.11.2010 PASSED BY THE TRIBUNAL IN T.A. NO.218/09. TRUE COPY P.S. TO JUDGE C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... S.T. Rev. Nos.76, 77 & 78 of 2011 .................................................................... Dated this the 10th day of August, 2011. JUDGMENT Ramachandran Nair, J. Heard counsel for the petitioner and Government Pleader for respondents. 2. Orders under challenge are penalty orders issued for the years 2001-2002, 2002-2003 and 2003-2004 which are modified by the Tribunal by reducing penalty. While the case of the petitioner is that petitioner was not involved in evasion and has only delayed payment which is on account of delayed payment of subsidy by the MPEDA for the equipments sold to fishing boat owners, Government Pleader submitted that the Tribunal in fact allowed departmental appeals filed against orders of the first appellate authority. The case of the department is that without any justification petitioner declared turnover of first sale of equipments as exempt and no tax was paid along with the monthly returns. Since returns were filed misdeclaring taxable turnover as exempted turnover, there is conscious attempt of evasion of S.T.Rev.76,77&78/11 2 tax is the case of the Government Pleader. However, counsel for the petitioner referred to the findings of the Accountant Member in his dissenting order where he has stated default interest paid by the petitioner which is almost equal amount of tax. 3. After hearing both sides what we notice is that the Tribunal has shown leniency by reducing penalty for all the years. In our view, levy of penalty in principle is justified because the petitioner declared taxable turnover representing first sale of taxable goods as exempted turnover without any bonafides. There is nothing to indicate that full payment was received from MPEDA. On the other hand, petitioner was only entitled to get subsidy from MPEDA. Having regard to the fact that petitioner has remitted the admitted tax with interest and since penalty is levied based on declared turnover, we modify the Tribunal's orders for the years 2001-2002 and 2002-2003 by reducing the penalty by a further sum of Rs.25,000/- for each of the two years and refix the penalty for these two years at Rs.1.75 lakhs each. So far as the penalty fixed by the Tribunal for 2003-2004 is concerned, we do not find any ground to reduce the penalty. S.T. Rev. Nos.76 and 77 of 2011 are S.T.Rev.76,77&78/11 3 partly allowed and S.T. Rev. No.78 of 2011 is dismissed. C.N.RAMACHANDRAN NAIR Judge P.S.GOPINATHAN Judge pms