Karnataka High Court
M/S Shree Jagadamba Traders vs The Additional Commissioner on 11 August, 2011
Bench: V.G.Sabhahit, B.Manohar
-1l- IN THE HIGH COURT OF KARNATAKA CIRCUIT BENCH AT DHARWAD _ DATED THIS THE 11th DAY OF AUGUST, 2U11. _ PRESENT a THE HON'BLE MR. JUSTICE V.G. SABHAHIT AND a 7 THE HON'BLE MR.JUSTICE B. MANOHAR a S.T.A.NO.74/2009. Between: M/s. SHREE JAGADAMBA TRADERS, © co PATIL GALLI, HUBLL Appellant (BY SRI.N.P.VIVEX, MEHTA, ADVOCATE FOR SRI. ATUL K. ALUR, ADVOCATE) | And: THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE- 1 VANIJAYA THERIGE KARYALAYA, GANDHINAGAR, BANGALORE--560 009. ... Respondent (BY SRI.MAHESH WODEYAR, AGA) ; _ THIS APPEAL IS FILED UNDER SECTION 66(1) OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 AGAINST THE. JUDGMENT AND ORDER DATED 04/07/2009 PASSED IN NO.ZAC-1/DWD/SMR-17/09-10 PASSED BY THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES ZGNE-1, BANGALORE. oo THIS APPEAL COMING ON FOR HEARING THIS DAY, aa V.G.SABHAHIT.J, DELIVERED THE FOLLOWING: JUDGMENT
This appeal is filed by the assessee being aggrieved by the order passed by the Addl. Commissioner of Commercial Taxes, Zone-1, Bangalore, in ZAC- ae -2- 1/DWD/SMR-17/09-10 dated 04.07.2009 wherein. in exercise of the power u/s 64 (1 ) of the Karnataka Vatue. Added Tax Act, 2003, it has set aside the order passed by - ' the first Appellate Authority dated 29.09. 2007 setting aside the order passed by the Assistant Commercial Taz Officer holding that when the vehicle i is not stupped, 'there was no duty on the part. of the assessce to produce the documents and therefore that would 'not. | invite imposition of duty or penalty. ae 4
2. The app peal. has: been admitted on 18.11.2009 for consideration of the e folowing substantial questions of law which have been rais sed in the appeal memo:
"y - Whether .... under the _ facts and fee circumstances of the case, the Revisional _ Authority Le., the respondent herein is | right in reversing the order of the FAA and restoring the order of the check post : authority who had levied a penalty of Rs.21,730/-?
| it) Whether under the _-- facts and circumstances of the case the respondent herein is right in holding that merely because the documents were not sealed at La' -3- the entry check post itself suffice to hold a that there is evasion of tax due to 'the : :
government? 7 a wi) Whether under the _ facts. - a .
circumstances of the case the. respondent - is right in reversing the: order of the first = appellate authority who had passed a reasoned order? re a tv) Whether under' . the facts and circumstances of the case 'the ACCT (Int) has Si risdiction to, le Uy penalty u/s 53 of the KVAT T Act, 20932" oo
3. The 'asa iabtbikding up to this appeal are as follows: ONS :
It is the case "of 'the revenue that on receiving . information, 'the intelligence Authority intercepted the "gocds vehicle bea: aring No.KA-24/1911 at KMC gate, Hubli, on 05, 09. 2005, 'which was carrying 250 bags of jeera : (weighing 190 kg per bag) valued Rs.5,55,629/- from M/s
- ; Punit Traders, Merchant and Commission Agents, Railway ae Station Road, Unjha-384170 (N.Guj) being interstate | ~~. consignor in favour of the assessee under invoice No.03 dt.23.08.2005. There was change of goods vehicle from sy"-4-
GJ-2T/6820 to KA 24/1911. The Intelligence authority found that the goods vehicle has passed through the -
border check post in its journey through Mahar ashtr a into , - = Karnataka. The driver of the gooc s vehicle adimitied 'this. discrepancy and submitted that the. documents were not got checked at the border check Post across" "Karnataka. No reasons with evidences if any were produced for this discrepancy in reply to GS endorsement issued. In view of this reason, the Intelligence Authoriy found contravention of Section 53, 2) (a) of KVAT Act, 2003. Hence, the Assessing Officer imposed penalty of Rs.21,370/-. Being agerieved by the said order of the ACCT (Int) Hubli, the ASSESSEE preferred an appeal before the First Appellate "Author ity in AP/VAT. 552/05-06/B wherein the Appellate Authority by ¢ a. short order held that non-stopping of the | vehicle at. the: 'check post en-route to get the documents oe - cannot be held against the assessee since he possessed correet" and proper document cannot and _ that just because the lorry driver has come in a different route, it "cannot be held as an attempt to evade tax. Accordingly, it set aside the order passed by the Assessing Officer and Los TT Ty -5- allowed the appeal by order dt.29.09.2007. Being aggrieved by the same, a show cause notice issued u/s 64_ (1) of KVAT Act, 2003, has been issued to the assessee to - * the effect that why the order passed by the. Appellate Authority should not be set aside and the order of the Assessing Officer be restored. "The Revisional Authority after considering the contention of the assessee and the revenue by order dated 04.. 07. 2009. held 'that there is contravention of ' 'Section | 53 12) Act 2003, as no documents were produced al at the "check post while crossing 'the: order "from: Gujerat to Karnataka and a deviation was taken to avoid 'checking at the check post and therefore the order passed by the Appellate Authority was: liable to be set aside by restoring the order passed by the Assessing Auchority. Being aggrieved by the same, | this appeal is filed by the assessee.
: 4 _ I have heard learned counsel for the appellant and the learned counsel for the respondent.
- 5. Learned counsel for the appellant submitted that there was no intention on the part of the appellant in \ee documents. Merely, because he did not stop the vehicle fat. Post after Producing the documents in "the border, while entering Karnataka from Gujarath, would not by itself bea ground to impose penalty and therefore the order passed by the Revisional Authority is liable to be Set aside.
6. Learned Government ntvoat -- that the material on record would clear show that the driver of the lorry had. "vaken: lorry i in a 'deviated route to avoid checking at the check post and therefore there was clear intention to "avoid » checking and the fact that the o documents have not been submitted for checking in first check | Post immediately after entering the Karnataka State
- order passed by the Revisional Authority is justified. ~ .
fe We have given careful consideration to the
- contentions of the learned counsel appearing for the Parties and scrutinized the Material on record. 438
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8. The material on record would clearly show that admittedly the documents which were being carried bby ¢ the, driver of the lorry bearing KA 24-1911] wherein the goods - :
was being transported from Guj: arat to. Hubli wer € not presented at the first check post after entering the border of Karnataka and there has been no 'endorsement 1 to that effect is not disputed. The Appellace Authority 0 on n holding that merely because the vehicle wes not stopped at the check post would not t be a ground to- impose penalty and there was no intention of avoiding payment of tax, has set aside the order oassed | by. the Assessing Officer which is clearly illegal and. unsustainable. Having regard to the above facts, iti is clear that there was an intention on the
- part of of the appellant to avoid payment of duty and penalty as requisite documents were not being carried and was not shown at the first check post after entering the border _ of the Karnataka State and a deviated route had been taken to avoid evading of tax. Accordingly, the order "passed by the Revisional Authority is justified and . accordingly we answer the substantial question of lawe "ye -8- against the appellant and hold that the appeal is devoid of merits and pass the following order:
Appeal is dismissed.
wi UDGE Safe _ IUDGR Jm/-