BABU SEBASTIAN Vs. ADDITIONAL SALES TAX OFFICER THRISSUR
LAWS(KER)-2005-1-46
HIGH COURT OF KERALA
Decided on January 06,2005

BABU SEBASTIAN Appellant
VERSUS
ADDITIONAL SALES TAX OFFICER THRISSUR Respondents


Referred Judgements :-

STATE OF KERALA V. JAYAN MEDICAL STORE [REFERRED TO]
MAHADAYAL PREMCHANDRA VS. COMMERCIAL TAX OFFICER CALCUTTA AND AN [REFERRED TO]
ORIENT PAPER MILLS LIMITED VS. UNION OF INDIA [REFERRED TO]
HEMA V KUMAR VS. ADDL SALESTAX OFFICER [REFERRED TO]


JUDGEMENT

- (1.)Petitioner is an assessee under the Kerala General Sales Tax Act, 1963 for the assessment years 1991-92 and 1992-93. Originally the assessments were completed based on the return filed by the assessee. Final assessment for the year 1991-92 was thus completed as per office proceedings No. 25131716/91-92 dated December 4, 1992. Likewise for the year 1992-93 final assessment was completed as per proceedings No. 25131716/92-93 dated April 20, 1994. Later on the Intelligence Officer, Sales Tax, Thrissur detected certain unaccounted purchase made by the dealer during the year 1992-93. For the assessment year 1991-92 also he detected certain inter-State purchase which were not accounted in the books of accounts maintained by the petitioner. The assessee admitted the facts before the Intelligence Officer and compounded the offence for the year 1991-92 as evidenced by exhibit P1 proceedings of the Intelligence Officer dated January 31, 1995. Likewise for the assessment year 1992-93 also the offence was compounded as evidenced by exhibit P2 proceedings of the Intelligence Officer dated December 31, 1994. The operative portion of the orders exhibits P1 and P2 would clearly show that it is the offence of non-maintenance of true and complete accounts committed by the dealer, which was compounded departmentally in lieu of prosecution and a sum of Rs. 48,874 towards compounding fee for the year 1991-92 and maximum amount of Rs. 1,00,000 towards compounding fee for the year 1992-93 were paid by the assessee. Thereafter by exhibit P3 proceedings dated June 30, 1995 original assessment was revised on finding that a portion of the turnover of the business had escaped assessment. Likewise by exhibit P4 dated June 30, 1995 revised assessment orders were passed for the year 1992-93 invoking Section 19(1) of the KGST Act. There is no dispute that the assessee had paid the balance tax due as per the revised assessment orders exhibits P3 and P4. Later, by exhibits P5 and P6 notices under date June 3, 1996 the Sales Tax Officer proposed to impose penalty of Rs. 1,03,458 under Section 45A(1)(d) read with Section 19(2) of the Act relating to the year 1991-92. Likewise an amount of Rs. 4,01,025 was proposed to be levied as penalty for the assessment year 1992-93. The assessee requested time for filing objection as he has strong objection against the proposed penalty proceedings. He also referred to the fact that he had already paid huge amounts towards compounding fee. However further time for filing objection was not granted and proceedings were finalised as per exhibits P7 and P8 orders. As per exhibit P7 an amount of Rs. 1,03,458 was imposed by way of penalty for wilful non-disclosure of taxable turnover for the year 1991-92 in exercise of power under Section 45A(1)(d) of the KGST Act as provided under Section 19(2) of the Act. Likewise as per exhibit P8 an amount of Rs. 4,01,025 was imposed by way of penalty for wilful non-disclosure of taxable turnover for the year 1992-93 under the said Act. Aggrieved thereby the petitioner has preferred this original petition seeking to quash exhibits P7 and P8 orders.
(2.)One of the contentions raised by the petitioner impugning exhibits P7 and P8 is that since no penalty was imposed on the petitioner while making an assessment under Section 19(1) of the Act, as evidenced by exhibits P3 and P4, the officer has no jurisdiction to levy a penalty by separate order. The imposition of penalty, unless it is made in the course of the assessment, is opposed to Section 19(2) of the KGST Act. It is also contended that the notices proposing to impose penalty as per exhibits P5 and P6 were dated June 3, 1996, after the revised orders of assessment, exhibits P3 and P4 were passed under Section 19 of the Act. It is further contended that proceedings were initiated after a period of one year of completion of the revised orders of assessment under Section 19 of the Act. Yet another contention raised by the learned counsel for the petitioner is that the penalty proceeding being a quasi-judicial proceeding the assessing authority has to apply his mind and take an independent decision uninfluenced by any orders of the superior officer and in the present case the order was issued under threat and pressure of the superior officer and he referred to the averments made in paragraph 5 of the original petition to support his contention. The learned counsel for the petitioner also contended that after the offence was compounded under Section 47 of the KGST Act, no penalty could be imposed and it is an accepted practice in the Sales Tax Department that no penalty is imposed in a case where the assessee admitted the offence and compounded the same after remitting the prescribed compounding fee.
(3.)The learned Government Pleader, Sri Soman on the other hand contended that the offence compounded is "non-maintenance of true and correct accounts" as is evidenced by the orders, exhibits P1 and P2. Whereas the penalty now imposed is for a different offence, i.e., for "wilful non-disclosure of the taxable turnover". As such the offence compounded was a different offence and in no way absolve his liability to be proceeded with under Section 19(2) of the Act. It is also his contention that there is nothing to indicate in Section 19(2) of the Act that the penalty should also be imposed simultaneously with the order of revised assessment passed under Section 19(1) of the Act. However, he was unable to make any submission as to whether the officer had passed an order as dictated by the superiors in the absence of any counter-affidavit filed in the case.


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