Karnataka High Court
The State Of Karnataka vs M/S Krypton Ceramic Centre on 26 March, 2018
Author: P.S.Dinesh Kumar
Bench: P.S.Dinesh Kumar
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STRP No.299/2016
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 26TH DAY OF MARCH 2018
PRESENT
THE HON'BLE MR.JUSTICE H.G.RAMESH
AND
THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR
S.T.R.P.NO.299/2016
IN
S.T.A.NO.198/2014
BETWEEN:
THE STATE OF KARNATAKA
REPRESENTED BY THE SECRETARY
FINANCE DEPARTMENT
VIDHANA SOUDHA
BENGALURU-560 001 ... PETITIONER
(BY SRI VIKRAM ADITYA HUILGOL, HCGP)
AND:
M/S KRYPTON CERAMIC CENTRE
NO.913-570/2, ANSARI ROAD
BUNDER, MANGALURU-575 001 ... RESPONDENT
(BY SRI ATUL K. ALUR, ADVOCATE)
THIS STRP IS FILED UNDER SECTION 66(1) OF THE
KARNATAKA VALUE ADDED TAX ACT, 2003, AGAINST THE
JUDGMENT DTD:19.02.2016 PASSED IN STA.NO.198/2014 ON
THE FILE OF KARNATAKA APPELLATE TRIBUNAL., BENGALURU,
ALLOWING THE APPEAL FILED UNDER SECTION 63 OF KVAT ACT,
2003 AGAINST THE ORDER DTD:19.11.2013 PASSED BY JCCT
APPEALS (DIVISION) MYSORE IN APPEAL NO.KVAT.AP.394/12-
13.
THIS STRP, HAVING BEEN HEARD AND RESERVED FOR
ORDERS ON 07.02.2018, COMING ON FOR PRONOUNCEMENT OF
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STRP No.299/2016
ORDERS, THIS DAY, P.S.DINESH KUMAR J., PRONOUNCED THE
FOLLOWING:-
ORDER
1. This Sales Tax Revision Petition is filed by the State challenging order dated 19.2.2016 passed by the Karnataka Appellate Tribunal, Bengaluru ('KAT' for short), in STA No.198/2014, framing following two questions for consideration of this Court:
(a) In the facts and circumstances of the case, whether the Karnataka Appellate Tribunal is right in allowing the appeal filed by the Respondent?
(b) The question is, whether Karnataka Appellate Tribunal is right in law even though e-sugam produced by the Respondent at the time of interception is beyond the time prescribed in the Notification issued by the Commissioner of Commercial Taxes under Section 53(2-A) of the KVAT Act?"
2. Briefly stated the facts of the case are, Assessee- respondent placed order to purchase ceramic glazed tiles from a firm in Gujarat. Accordingly, 9071 boxes of tiles were dispatched through a ship M.V.Oel which reached Mangaluru Port on 27.12.2012. Customs clearance was completed on 31.12.2012.
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3. On 3.1.2013, the vehicle carrying tiles was intercepted by the check-post officer. On behalf of assessee, following documents were produced:
"(a) Invoice No.1057 dtd.20.12.2012, 1359 boxes for Rs.6,88,505/-.
(b) e-sugam bearing S.No.8924216667 dtd. 22.12.2012 for Rs.6,88,505/-."
4. It was observed by the Commercial Tax Officer ('CTO' for short) that the validity of e-sugam had expired. Accordingly, he proposed to levy penalty under Section 53(12) of KVAT Act, 2003 and levied Rs.1,99,666/- as penalty. The assessee unsuccessfully challenged the order passed by the CTO before the Joint Commissioner of Commercial Taxes(Appeals) and further before the KAT.
5. The point for consideration before the KAT was, whether the cause shown by the assessee in carrying goods under e-sugam which had expired as on the date of transit was satisfactory?
6. After considering various judicial interpretations, the KAT has recorded its reasons as follows: -4- STRP No.299/2016
"On plain reading of this provisions of law, this provisions of law empowers officer concerned to impose penalty if sufficient cause is not furnished regarding contravention of the Act or non-compliance of the act. But on perusal of the averments of the appeal memo as well as the averments of the order passed by the CTO and the First Appellate Authority, it is seen that there is e-sugam in connection with the transportation of the goods involved in this case. But the said e-sugam date is expired on 31/12/2012. The observation of the CTO is that e-sugam is expired is 31/12/2012. Thus the provision of Sec.53(2)(A) have been contravened. The observation of the First Appellate Authority as disclosed in page no.3 of the order passed in KVAT AP.394/2012-13 dated 19/11/2013 is that .................... Since there is a contravention of sec.53(2) and 53(2-A) by the Appellant by carrying a e-sugam the validity period of which expired the Respondent is fully justified in levying the penalty at twice the amount of tax payable which is the minimum.................................... With this observation, the First Appellate Authority has dismissed the appeal. In this order of the First Appellate Authority in page no.2 the First Appellate Authorty has also referred the submission of the agent of the party i.e., Sri. Abdul Kader Iddya the DAR of the Appellant argued that goods where accompanying by the prescribed documents such as invoice, e-sugam and the particulars of the e-sugam and invoice perfectly tallied with each other. Due to the circumstances beyond his control i.e. due to bad weather there was a delay in arrival goods by which time the validity of e-sugam had expired. There was no intention at all to evade any tax nor there was contravention of the any provision of the Sec.53(2) and hence the levy of penalty was unwarranted. This submission is not taken into consideration by the First Appellate Authority and has passed the order of dismissal of appeal by upholding the order of the CTO, on the ground that the date of e-sugam is expired. But it is pertinent to note that the goods are carried in the vessel from its destination i.e. from Gujarat in the vessel (Ship). Under the circumstances, the check post Authority as well as the First Appellate Authority ought to have taken into the factum of bad whether to the navigation of the vessel. More over it is not the case of transporting the goods outside the state but whereas it is a case of entering of the goods within the state with concerned document among which e-sugam is out dated for which there is sufficient clarification found in the submission as well as contents of the appeal memo which is the bad whether. Under the circumstances we are of the considered view that the delay -5- STRP No.299/2016 caused is due to unforeseeable event of the nature calamity like bad weather. Under the circumstances, the finding of the CTO and that the Appellant has contravenes the provision of law laid down u/s.53 of the KVAT Act and is liable to pay the penalty itself is an erroneous unsustainable findings. Hence we are of the considered view that the Appellant has proved the point No.I. Accordingly we answer the point no.I in the Affirmative."
(Emphasis Supplied)
7. Admittedly, goods were indented from Gujarat. They reached Penambur Port on 27.12.2012. Customs formalities were completed on 31.12.2012. The cause shown by the assessee is that the delay in transshipment occurred as the goods arrived belatedly due to bad weather, which was beyond assessee's control. The explanation given by the assessee has found favour with the KAT and the KAT has set aside the order passed by the first appellate Authority.
8. Though the State has urged two questions recorded hereinabove for consideration of this Court, in our considered view, the entire case rests upon factual matrix. It is not a case in which goods were being transported without an e-sugam. The assessee had obtained e-sugam but it had expired. The cause shown is reasonable. In the circumstances, we are at one with the view taken by the KAT.
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9. Resultantly, this revision petition fails and is accordingly dismissed.
We make no order as to costs.
Revision Petition dismissed.
Sd/-
JUDGE Sd/-
JUDGE Yn.