IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER TUESDAY, THE 17TH JUNE 2008 / 27TH JYAISHTA 1930 S.T.Rev.No.473 of 2005 --------------------------------------- T.A.NO.482/2004 OF THE KERALA SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, KOZHIKODE - ORDER DATED 24.08.2005. (ASSESSMENT YEAR 2002-03) .................... REVISION PETITIONER:- ---------------------------------- CLASSIC MARBLES, PALLIKUNNU, KANNUR, REPRESENTED BY MANAGING PARTNER, K.P. SHABEER. BY ADV. SRI.M.C.MADHAVAN. RESPONDENT:- ----------------------- STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY TO GOVERNMENT, SECRETARIAT, THIRUVANANTHAPURAM. BY SENIOR GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ. THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 17/06/2008, ALONG WITH S.T.REV.NOS.11 OF 2006 & 47 OF 2006 THE COURT ON THE SAME DAY PASSED THE FOLLOWING: H.L.Dattu,C.J. & A.K.Basheer,J. --------------------------------------------------------------- S.T.Rev.Nos.473 of 2005, 11 of 2006 & 47 of 2006 --------------------------------------------------------------- Dated, this the 17th day of June, 2008 ORDER H.L.Dattu,C.J. The petitioner in all these revision petitions is a dealer in marble slabs. He has effected inter-State purchase of marbles from a dealer in Rajasthan. It appears, the seller had identified the transporter and the lorry and had arranged to transport the marble slabs sold to the petitioner. It is his specific case that the transporter was carrying all the documents prescribed under Section 29(2) of the Kerala General Sales Tax Act (“Act” for short). 2. The vehicle was detained by the Check Post Officer at Manjeshwar. On physical verification of the stocks, the Check Post Officer was of the opinion that - (i) the goods transported are in excess quantity than what is reflected in the sale invoice; (ii) the rate of marble shown in the sale bills is less than the actual value and (iii) freight charges shown in the sale bills is less than the actual transportation charges. After accepting the security deposit offered by the petitioner, the vehicle and the goods in the vehicle came to be released in favour of the petitioner. Thereafter, the Inspecting Officer has transmitted the relevant papers and the documents procured from the petitioner and the notice issued by him, to the Enquiry Officer to inquire and pass appropriate orders as provided S.T.Rev.473/2005 & connected cases. - 2 - in Section 29A(4) of the Act. 3. The Enquiry Officer, after notice to the petitioner, has converted the security deposit offered by the petitioner as penalty. 4. Being disturbed by the orders passed, the assessee had filed appeals before the first appellate authority and the same came to be confirmed by the said authority. However, in the second appeals filed before the Tribunal, the Tribunal has granted some relief to the petitioner. Still not being satisfied with the orders passed by the Tribunal, the assessee is before us in these Sales Tax Revisions. 5. The assessee has framed the following questions of law for our consideration and decision. They are as under: “1) Whether the provisions of Section 29A of the Kerala General Sales Tax Act, 1963 - the Act which provides for levy of a tax on the sale or purchase of goods in the State of Kerala - can be legally invoked against an assessee and penalty under sub-section (4) thereof imposed on him when admittedly the transaction concerned is inter- State purchase of goods? 2) Assuming without agreeing that the levy of penalty under section 29A(4) of the Act on inter-State purchase of goods is in order, can the said levy be made simply based on the finding entered by the Intelligence Inspector that excess quantity than that shown in the documents is being S.T.Rev.473/2005 & connected cases. - 3 - transported or on “physical re-verification” of the goods and consequent finding that excess quantity than what is shown in the documents that accompanied the transport have been transported? 3) Is the finding in the order of the Sales Tax Appellate Tribunal that measurement was taken in the presence of the appellant and that that was not disputed is justified in law in view of the endorsement made by the Intelligence Inspector on Annexure-A and the relevant grounds of appeal at Annexure E? 4) Is it legally justifiable to penalise an assessee under section 29A(4) of the Act on the ground of “attempt to evade tax due under the Act” when the goods are actually sent to him by an outside agency and there is no actual finding that the assessee is involved or is aware of having shown a lesser quantity in the documents accompanying the transport with a view to evade payment of tax due to the State? Is it not illogical to presume that a seller of goods would show reduced quantity of goods in the documents which would only cause loss to him? 5) When a person (consignor) from outside the State despatches a particular quantity of goods to a person (consignee) in the State, is it within the power of the sales tax authorities in the State to conclude, on their own, without actually examining the consignor and/or consignee or without actually measuring or weighing, as the case may S.T.Rev.473/2005 & connected cases. - 4 - be, the entire quantity of goods in the presence of at least either the consignor or the consignee after unloading the goods from the vehicle concerned, that quantity of goods in excess of that shown in the documents has been transported. 6) Can the actual quantity of goods (marble slabs in this case) transported in a goods vehicle be correctly arrived at on “physical verification” without the same being unloaded and measurement of each slab taken separately?” 5. Sri.M.C.Madhavan, learned counsel appearing for the petitioner would submit that the Inspecting authority, without physically verifying the goods being transported in the vehicle, could not have presumed that there is excess quantity of goods than what is declared in the sale invoice/purchase invoice. Therefore, it is submitted that the orders passed by the authorities and the Tribunal require to be annulled by this Court and the questions of law framed by the assessee require to be answered in favour of the assessee and against the Revenue. In aid of his submission, the learned counsel has taken us through the notice issued by the Check Post authority who had detained the vehicle at Manjeshwar Check Post and the orders passed by the Enquiry Officer. This is the only submission made by the learned counsel at the time of hearing these revision petitions. 6. In the notice issued, the Check Post Officer has clearly S.T.Rev.473/2005 & connected cases. - 5 - stated that, at the request of the owner of the goods, a physical verification of the goods transported in the vehicle was made and after such remeasurement in the presence of the assessee, it was still found that the assessee was transporting excess quantity of goods than what is reflected in the sale invoice. 7. In the orders passed also, there is a finding by the Enquiry Officer. It is as under: “As regards to the excess quantity of marble slabs transported the dealer's request for measuring the quantity of slabs in his presence had been allowed and the remeasurement with the presence of both side proved that there was 3900 sq. ft. of marble slab after allowing cracks and wastage etc. as against the quantity of 3400.05 sq. ft. accounted by the dealer”. 8. Based on the physical verification of the goods, that too in the presence of the assessee, the Check Post authority has given a clear finding that the dealer was transporting excess quantity of goods than what was declared in the sale invoice and this has resulted in the Check Post Officer coming to the conclusion that there is an attempt to evade payment of tax due to the State. This finding of fact by the Enquiry Officer is approved by the first appellate authority and the Tribunal. S.T.Rev.473/2005 & connected cases. - 6 - Therefore, it cannot be said that the order of the Tribunal is either illegal, irregular or arbitrary. 9. The findings of fact by the authorities under the Act cannot be disturbed by this Court in a petition filed under Section 41 of the Act, since the parameters of the revisional jurisdiction is very much limited to decide only the questions of law raised, if the Tribunal has either decided erroneously or has failed to decide any question of law. In that view of the matter, these revision petitions require to be rejected and they are rejected and the questions of law framed by the assessee are answered against the assessee and in favour of the Revenue. Ordered accordingly. Sd/- H.L.Dattu Chief Justice Sd/- A.K.Basheer Judge vku/dk. - true copy -