IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR FRIDAY, THE 26TH SEPTEMBER 2008 / 4TH ASWINA 1930 WP(C).No. 4390 of 2006(V) ------------------------- PETITIONER(S): --------------- R.VASANTHA KUMAR, K.R.GARDENS, KATTUPUTHUSSERY, NAVAIKULAM PO, THIRUVANANTHAPURAM DISTRICT. BY ADV. SRI.E.P.GOVINDAN SRI.P.VISWAMBHARAN RESPONDENT(S): --------------- 1. THE INTELLIGENCE OFFICER,S QUAD NO.I, COMMERCIAL TAXES, KOLLAM. 2. THE COMMISSIONER OF COMMERCIAL TAXES, KERALA, PUBLIC BUILDING, NEAR MUSEUM JUNCTION, TRIVANDRUM. 3. THE DEPUTY TAHSILDAR (RR),CHIRAYINKIL TALUK, TRIVANDRUM DISTRICT. 4. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY, TAXES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. BY G.P. SRI. TEKCHAND THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 26/09/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 APPENDIX PETITIONER'S EXHIBITS: EXT.P1 TRUE COPY OF THE SHOP INSPECT9ION REPORT NO. 114777 DATED 25.2.2003 EXT.P2 TRUE COPY OF THE PENALTY ORDER DATED 30.6.2003 FOR 1995-96 EXT.P3 TRUE COPY OF THE PENALTY ORDER FOR THE YEARS 1996-97 DATED 30.6.2003 EXT.P4 TRUE COPY OF THE PENALTY ORDER FOR THE YEARS 1997-98 DATED 30.6.2003 EXT.P5 TRUE COPY OF THE PENALTY ORDER FOR THE YEARS 1998-99 DATED 30.6.2003 EXT.P6 TRUE COPY OF THE PENALTY ORDER FOR THE YEARS 2000-01 DATED 30.6.2003 EXT.P7 TRUE COPY OF THE PENALTY ORDER FOR THE YEARS 2001-02 DATED 30.6.2003 EXT.P8 TRUE COPY OF THE PENALTY ORDER FOR THE YEAR 2002-03 DATED 30.6.2003 EXT.P9 TRUE COPY OF THE MODIFIED ORDER DATED 20.10.2003 EXT.P10 TRUE COPY OF THE COMMON ORDER IN STRP 250/03 TO 256/03 DATED 7./7.2004 BY THE DY. COMMR. KOLLAM. EXT.P11 TRUE COPY OF THE ORDER DATED 15.11.2005 BY THE 2ND RESPONDENT. EXT.P12 TRUE COPY OF THE NOTICE DATED 17.2.2004 BY THE THIRD RESPONDENT. RESPONDENTS' EXHIBITS: NIL. TRUE COPY P.S. TO JUDGE. C.N. RAMACHANDRAN NAIR, J. -------------------------------------------- W.P.C. NO. 4390 OF 2006 -------------------------------------------- Dated this the 26th day of September, 2008 JUDGMENT Petitioner is challenging Ext.P11 order by which the Commissioner of Commercial Taxes has confirmed penalty levied on the petitioner under Section 45A of the KGST Act for the assessment years 1995-96 to 2002-03 except for the year 1999-2000. Inspection was conducted in the business premises of the petitioner on 25.2.2003 when it was noticed that petitioner has not remitted any sales tax on bus body building work done for the vehicles owned by petitioner's wife, children, daughter-in-law, etc. Counsel for the petitioner contended that materials were supplied by registered owners of the vehicles, who are close relatives of the petitioner, and they have paid wages to the employees separately. Consequently no sale is involved and so much so tax is not payable, is his case. It is stated that assessments are under contest in appeals. Government Pleader contended that petitioner is liable to pay sales tax on the sale of bus body built on the chassis of the vehicles of petitioner's wife, children and other close relatives, because 2 Act does not grant any exemption from tax on sales made to close relatives. 2. There is no dispute that body building unit belongs to the petitioner and petitioner is a registered dealer pertaining to business carried on therein. When body is built on the chassis of bus and lorry, whether it belongs to petitioner's wife, children or any other close relative, there is clear sale and so much so tax was payable on the sale. Exemption claimed by the petitioner on the ground that purchasers, namely, his wife, children or relatives, etc. supplied parts and paid labour charges, etc., does not stand proved with any evidence. In fact, if petitioner has any such case, he would have included the turnover claimed exemption, and produced contracts and other records in support of the same. In the absence of any such material, the authorities below rightly levied penalty. Therefore the levy of penalty confirmed by the Commissioner is sustained. 3. Even though counsel for the petitioner prayed for reduction of penalty, I do not think any reduction is called for because interest on tax payable will be more than any reduction in penalty. 3 In the circumstances, W.P. is devoid of any merit and is dismissed. However, petitioner is free to approach the Government for settlement under Amnesty Scheme. (C.N. RAMACHANDRAN NAIR) Judge kk 4