M/S.Indus Ind Bank Ltd vs The Intelligence Inspector on 4 September, 2012
7. Section 47(6) of the Act says that the Officer
authorised under sub-section (5) shall, before conducting the
inquiry, serve notice on the owner of the goods and give him an
opportunity of being heard and if, after the enquiry, such officer
finds that there has been an attempt to evade tax due under this
Act, he shall, by order, impose on the owner of the goods a
penalty not exceeding twice the amount of tax attempted to be
evaded, as may be estimated by such officer. So, it is clear from
this that the adjudicating officer must give an opportunity to the
owner of the goods and come to the conclusion, on the basis of
the materials available, that there has been an attempt to evade
tax due under the Act and only if such a conclusion has been
arrived at by the Officer, he is expected to impose penalty under
this Section. This was supported by the decision reported in
Ranganathan v. Commercial Tax Inspector (2011(3) KLT SN
22 (Case No.24), wherein it has been held that the crucial
difference between the provisions contained in Section 47(2)
WA.NOS.1714/12 & 121/13 &
O.T.REV.NO.9/13 78
and 47(6) is that the detaining authority is authorised to intercept
and demand security deposit if he has reason to suspect that
the person transporting the goods is attempting to evade
payment of tax or the goods are not covered by proper and
genuine documents in cases where such documents are
necessary. But, in Section 47(6), the authorised Officer
conducting the enquiry is empowered to impose penalty only if
such Officer finds that there has been an attempt to evade the
tax due under the Act. From the scheme of the statute, it is clear
and evident that if any detention is made on the basis of a
reasonable suspicion regarding attempt to evade payment of tax
or on the basis of not accompanying proper and genuine
documents, it shall be succeeded by an enquiry by another
officer of higher rank. Culmination of such enquiry should result
in an adjudication as to whether there was an actual attempt to
evade payment of tax due under the Act. Hence it is evident that
even if there exists a reasonable suspicion regarding attempt of
evasion of payment of tax, penalty can be imposed after
completing an enquiry only if the Officer arrives at a conclusive
WA.NOS.1714/12 & 121/13 &
O.T.REV.NO.9/13 79
finding that such an attempt was there in existence. Conclusive
finding contemplated under Section 47(6) of the Act, regarding
the attempt to evade tax could not be on mere presumption.
There should not be any missing link between the suspicion of
attempt of evasion of tax and the existence of an intention of
attempting to evade tax by the owner of the goods.