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 2ND JUNE 2010 / 12TH JYAISTHA 1932 OT.Rev.No. 7 of 2010() ----------------------------- AGAINST THE ORDER DATED 30/11/2009 IN TA(VAT)321/2009 IN TAVAT.321/2009 of KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM. ................................. REVISION PETITIONER(S):/APPELLANT ----------------------------------------------------- P.K.ALI HAJI, STAR LIGHT FABRICATION WORKS, COIMBATORE ROAD, PALAKKAD. BY ADV. SRI.N.MURALEEDHARAN NAIR SMT.K.HYMAVATHY SRI.T.G.ABHILASH RESPONDENT(S): RESPONDENT ------------------------------------------- STATE OF KERALA. GOVERNMENT PLEADER MR. MOHAMMED RAFEEQ THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON 02/06/2010, ALONG WITH OTRV NO.8 OF 2010 THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. --------------------------- O.T.Rev Nos. 7 & 8 OF 2010 -------------------------- Dated this the 2nd day of June, 2010 J U D G M E N T Ramachandran Nair, J. Heard the learned counsel appearing for the petitioner and the learned Government Pleader appearing for the respondent. The revisions are filed against the orders of the Tribunal confirming the penalty at equal amount of tax for the years 2005-06 and 2006-07 for non payment of full rate of tax along with the returns. 2. The petitioner was a manufacturer of tractor trailer on which he has remitted tax at the rate of 4% treating it as an item falling under the third schedule. However the Assistant Commissioner have assessed the turn over of the item at 12.5%. Even though the petitioner remitted differential tax and interest, the assessing officer levied penalty for non payment of tax under Section 67(2) because even after notice the assessee did not revise the return and remit the differential tax voluntarily. It is seen from the provisions that the penalty for evasion of tax as well as for belated payment is one and the same, the maximum being twice the amount of tax. Even though in principle we uphold the levy of penalty, we feel the assessee is entitled to reduction, if his claim that business is closed on account of losses is genuine. O.T R.ev. Nos.7 & 8/2010 2 In the above circumstances, the revision cases are disposed of with a direction to the assessing officer to verify whether the very same business is continued by any other family member of the petitioner and if so, to reduce the penalty to 50% of the tax amount. However, if on verification the assessing officer finds that the business is closed and no other family member is continuing the same, he will reduce the penalty to 25% of the tax amount and recover only such amount. Petitioner will produce a certified copy of this judgment before the assessing officer to modify the penalty orders as above. Further, no interest on penalty should be recovered from the petitioner if reduced penalty is paid within three months from now. We make it clear that since reduction of penalty is granted to the particular facts of this case, the respondent need not treat this as a precedent in any other case. C.N.RAMACHANDRAN NAIR (JUDGE ) P.S.GOPINATHAN (JUDGE ) vps O.T R.ev. Nos.7 & 8/2010 3 O.T R.ev. Nos.7 & 8/2010 4