IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR THURSDAY, THE 3RD APRIL 2008 / 14TH CHAITHRA 1930 WP(C).No. 30581 of 2006(N) -------------------------- PETITIONER: ------------ ANASWARA GOLD, WANDOOR, REPRESENTED BY ITS PARTNER, P.R. RAHIMAN, S/O.LATE KUTTIYALI, PUTHIYAPURAYIL HOUSE, KADAVATHOOR P.O.,KANNUR. BY ADV. SRI.DILIP MOHAN RESPONDENTS: ------------- 1. STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, DEPARTMENT OF TAXES, TRIVANDRUM. 2. THE COMMISSIONER OF COMMERCIAL TAXES, TRIVANDRUM. 3. DEPUTY COMMISIONER OF COMMERCIAL TAXES, MALAPPURAM. 4. INTELLIGENCE OFFICER, SQUAD NO.1, MALAPPURAM. 5. THE SALES TAX OFFICER, NILAMBUR. BY GOVERNMENT PLEADER G.P. SRI. E.P. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03/04/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 APPENDIX PETITIONER'S EXHIBITS: EXT.P1 TRUE COPY OF THE NOTICE UNDER SECTION 45A OF THE KGST ACT DATED 20.2.2005 EXT.P2 TRUE COPY OF THE ORDER DATED 28.4.2005 ISSUED BY THE FOURTH RESPONDENT. EXT.P3 TRUE COPY OF THE ORDER PASSED BY THE THIRD RESPONDENT DATED 21.10.2005 EXT.P4 TRUE COPY OF THE ORDER DATED 26.9.2006 ISSUED BY THE 2ND RESPONDENT IN THE SUO MOTU REVISION. EXT.P5 TRUE COPY OF THE REVENUE RECOVERY NOTICE ISSUED BY THE 5TH RESPONDENT DATED 17.10.2006 EXT.P6 TRUE COPY OF THE DEED OF RETIREMENT OF THE PARTNERSHIP. RESPONDENTS' EXHIBITS: NIL. TRUE COPY P.S. TO JUDGE. C.N. RAMACHANDRAN NAIR, J. -------------------------------------------- W.P.C. NO. 30581 OF 2006 -------------------------------------------- Dated this the 3rd day of April, 2008 JUDGMENT Petitioner is challenging Ext.P2 order whereunder the Commissioner suo motu revised the Deputy Commissioner's order interfering with penalty order. Petitioner is a partnership firm engaged in business in gold jewellery. Even though petitioner had turnover above the limit that attracts tax for the year 2004-05, petitioner did not take registration. While conducting inspection, the Intelligence Officer noticed shortage of 3.78 Kgs. of gold ornanments. Penalty is levied on account of shortage in stock by treating it as unaccounted sale. Petitioner offered explanation that shortage represents gold given to the partner who retired three months prior to the date of inspection, as his share. Though the Deputy Commissioner accepted the same, the Commissioner noticed that documents produced namely retirement deed is not a genuine one in as much as the stamp paper was purchased much after retirement date. I do not find any ground to interfere with the order of the Commissioner because on facts he found manipulation 2 of document by the petitioner. However, since shortage is noticed from the petitioner's own account and petitioner has raised legal ground and retirement of the partner is not found against the petitioner, I dispose of the W.P. by modifying Ext.P4 order by reducing the penalty to Rs. 1.25 lakhs. On payment of this amount, security will be released to the petitioner. Petitioner is granted one month's time to make payment and get the security released. If payment is not made as above, security will be encashed. (C.N. RAMACHANDRAN NAIR) Judge kk 3