JUDGMENT T. L. VISWANATHA IYER, J. - Petitioner is the manufacture of Ujala, a liquid blue. He has distributors all over Kerala. The item is taxable at the first point of sale in the State. Petitioner has been assessed to tax under the Kerala General Sales Tax Act, 1963 (the KGST Act) and the Central Sales Tax Act, 1956 (the Central Act) for the years up to 1989-90. 2. Along with the business of manufacture and sale of Ujala, the petitioner is also running a transport business by name Deepti Road Lines. Separate accounts are maintained by the petitioner for the two lines of business, namely, Ujala and Deepti Road Lines. The transport of Ujala for the distributors is undertaken by the Deepti Road Lines for which separate payments are made to the said concern, apart from the price paid for Ujala. The charges for transport are at a flat rate of 25 paise per bottle stated to be for the purpose of ensuring a uniform price for the product in all places in Kerala. The petitioner is an assessee to income-tax and according to him he is keeping separate sets of accounts for the two lines of business for the purpose of claiming depreciation appropriately for the purpose of income-tax. 3. There was an inspection of the business premises of the petitioner on October 15, 1991 and consequent thereon the first respondent, namely, the Inspecting Assistant Commissioner (Intelligence) issued a notice, exhibit P1, to the petitioner alleging failure to keep true and complete accounts as also submission of untrue or incorrect returns constituting offences under sub-clauses (b) and (d) of section 45A of the KGST Act. It was the first respondent's case in the notice, exhibit P1, that the transport charges collected from the distributors were not really transport charges actually incurred for transporting the Ujala to different places, but they really represented the cost of goods which the petitioner was cleverly excluding from the taxable turnover by showing them as transport charges. For making this allegation the first respondent relied, besides the material gathered at the inspection held on October 15, 1991, also on the statements that he had taken from the distributors. The first respondent based his above statement on the fact that the petitioner was collecting a fixed rate of transport charges of 25 paise per bottle irrespective of the distance covered for the transport. The first respondent based his above statement on the fact that the petitioner was collecting a fixed rate of transport charges of 25 paise per bottle irrespective of the distance covered for the transport. The first respondent pointed out that as per rule 9(f) of the KGST Rules, freight was eligible for deduction if it was specified and charged separately by the dealer without including it in the price. But in this case the amount charged in the guise of transportation was not the amount incurred for transportation of goods, but part of the price for Ujala shown in a separate set of bills purposely and deliberately, to evade payment of sales tax. The first respondent therefore proposed to impose the maximum penalty of Rs. 16,53,000, the amount of tax evaded being Rs. 8,26,959. 4. Petitioner sent a detailed reply in which he refuted the allegation of any attempt at evasion of tax. According to him, there is nothing illegal or wrong in carrying on a separate transport business or in undertaking the transport of his goods to the distributors for charges paid by them. He had absolutely no mens rea, so essential to constitute the offences under section 45A. 5. This reply was not acceptable to the first respondent, who sent a further notice, exhibit P3, informing the petitioner of the materials relied on by him in support of his notice, exhibit P1, and posting the case to January 11, 1993. He also stated that since the transportation bills and other documents relied on were those of the petitioner's own dealers, there was no need to cross-examine them, but if the petitioner desired to cross-examine them he may produce them for the purpose. This was in reply to the petitioner's statement in exhibit P2 that the dealers who were to be cross-examined had informed him that they will appear only on summons from the first respondent. 6. This was in reply to the petitioner's statement in exhibit P2 that the dealers who were to be cross-examined had informed him that they will appear only on summons from the first respondent. 6. The petitioner sent a further reply, exhibit P4, in which he raised a plea that since the assessment for the year 1991-92 had not been completed and since the question as to whether there was any evasion of tax or the correctness of the turnover returned was a matter arising in the course of the regular assessment, the files may be transferred to the assessing authority at Trichur or at least the proceedings under section 45A may be deferred until the regular assessment was completed so that the entire matter could be decided by the assessing authority. 7. The first respondent replied by exhibit P5 by which he adjourned the hearing to January 23, 1993 to afford one more opportunity to the petitioner. He reiterated his earlier charge in exhibit P1 that the charges collected by the petitioner for transporting charges were not freight, but a part of the price in disguise. This was a modus operandi to reduce sale price to evade payment of legitimate tax. But the first respondent did not refer to the petitioner's plea for transferring the file to the assessing authority or for postponement of the proceedings till after the assessment was completed. 8. On receipt of the notice, exhibit P5, the petitioner filed this original petition substantially raising two points, namely, one that the proceedings were premature and secondly that there was no case for the respondents on the merits. These contentions were reiterated before me at the time of hearing of the original petition. 9. The petitioner contends that the proceedings initiated under section 45A are premature because according to him the proceedings under section 45A can be initiated in such circumstances only after the assessment for the year is completed. He points out that the authority competent to take such action under section 45A is the assessing authority or the Appellate Assistant Commissioner though the assessing authority includes an officer not below the rank of a Sales Tax Officer as may be specified by notification by the Government, by virtue of explanation II. He points out that the authority competent to take such action under section 45A is the assessing authority or the Appellate Assistant Commissioner though the assessing authority includes an officer not below the rank of a Sales Tax Officer as may be specified by notification by the Government, by virtue of explanation II. The point involved, namely, as to whether the transportation charges really formed part of the sale price was a matter which will arise for consideration in the assessment proceedings and it will therefore be inappropriate for penalty proceedings to be initiated before the assessment is completed. Either the proceeding should be transferred to the assessing authority for him to pass orders consequent on the assessment or at least they should be deferred till after the assessment is completed. Counsel for the petitioner referred to the decisions of the Supreme Court in Jain Brothers v. Union of India [1970] 77 ITR 107; AIR 1970 SC 778 arising under the Income-tax Act, as also a decision of Sankaran Nair, J., in O.P. No. 7003 of 1990 arising under the Kerala Agricultural Income-tax Act. 10. The Government Pleader, however, points out that so far as the proceedings under the aforesaid Acts are concerned, they arise only consequent on the completion of the assessment and the decisions are therefore not applicable to a case under the KGST Act where simultaneous proceedings for imposition of penalty are contemplated and authorised. 11. The fact that the first respondent who has issued the notices, exhibits P1, P3 and P5 is a competent authority to initiate the proceedings cannot be disputed, in the light of explanation II to section 45A(1) as also because of the decision of this Court in Intelligence Officer v. Swarnambhal Jewellers [1988] 69 STC 175. The question whether the proceedings under section 45A could be carried on simultaneously or whether they will have to wait the result of the assessment proceedings has again been answered by a Bench of this Court in Intelligence Officer v. Hotel Ambassador [1980] 45 STC 425. The learned Judges observed that it could not be stated that the power of imposing penalty under section 45A could be exercised only in the course of assessment proceedings. The learned Judges observed that it could not be stated that the power of imposing penalty under section 45A could be exercised only in the course of assessment proceedings. It was a separate and independent section and irrespective of whether the assessment has been completed or not, it is open to the requisite authority to take action under that section provided the conditions for action are satisfied. This decision of a Division Bench under section 45A itself, is binding on me. 12. Even otherwise a perusal of section 45A shows that it is not dependent on a finding made in the course of the assessment. On the other hand it postulates an independent proceeding either by the assessing authority or any officer not below the rank of a Sales Tax Officer, with a separate hierarchy of remedies for getting redress under sub-sections (3) and (5) thereof. It is therefore not part of the assessment, nor related to it though it will be advisable to have the matter related to the assessment proceedings when questions of the nature raised in the instant proceedings, namely, as to what is taxable turnover, are involved. A separate proceeding can lead to conflict of decisions between the authority functioning under section 45A and the assessing authority. But this will not enable this Court to strike down the proceedings initiated under section 45A when they are otherwise within the competence of the first respondent under the Act and the statute does not require the postponement of such proceedings till after the assessment is completed. I cannot therefore accede to the first proposition put forward by counsel for the petitioner that either the proceedings initiated as per exhibit P1 should be postponed till after the assessment is completed or that the proceedings should be transferred to the assessing authority. So far as the latter is concerned, the question does not arise in this original petition so long as the first respondent is a competent authority under section 45A. 13. So far as the merits of the case are concerned, counsel for the petitioner refers to the decisions in State of Madras v. S. G. Jayaraj Nadar & Sons [1971] 28 STC 700 (SC), Cement Marketing Co. of India Ltd. v. Assistant Commissioner of Sales Tax [1980] 45 STC 197 (SC) and Kollanur Agencies v. Assistant Commissioner [1991] 80 STC 177 (Ker). of India Ltd. v. Assistant Commissioner of Sales Tax [1980] 45 STC 197 (SC) and Kollanur Agencies v. Assistant Commissioner [1991] 80 STC 177 (Ker). In the first of these cases it was pointed out that the penalty for submission of an incomplete or incorrect return will arise only if an assessment had to be made to the best of his judgment by the assessing authority. When certain items which are not included in the turnover are discovered from the dealer's own account books and the assessing authority includes these items in the dealer's turnover that was not a case for imposition of penalty. The same view was reiterated in the third of the cases mentioned. In the second case, the question was as to when a return could be stated to be false and the Supreme Court stated that failure to include railway freight in turnover in the bona fide belief that it did not form part of the sale price will not make the return a false one liable to imposition of penalty. 14. These are all relevant matters to be considered by the first respondent at the time he completes the proceedings initiated as per exhibit P1. As at present the proceedings are only in the preliminary stage and the facts and motives if any are yet to be adjudicated upon. It will be premature for this Court to enter a finding on the questions raised when the proceedings are only at the preliminary stage of notice to show cause and reply. The enquiry is yet to be made. It will be for the first respondent to deal with the matter as to whether the petitioner is guilty of the charges levelled against him of violation of section 45A(1)(b) and (d) and in doing so he must certainly bear in mind the principles laid down by this Court in Sudhi v. Intelligence Officer [1992] 85 STC 337, where this Court observed that the exercise of the power under section 45A should not be illegal, unfair or irrational or unreasonable and that in any case the levy of penalty is not compulsive, but only enabling or permissive. This Court also observed with reference to the meaning of the word "evasion" for the purpose of section 45A that it is not mere default that is made the foundation for penalty. This Court also observed with reference to the meaning of the word "evasion" for the purpose of section 45A that it is not mere default that is made the foundation for penalty. It is contumacious or fraudulent or other blameworthy or objectionable conduct of an assessee in fulfilling the obligation mentioned in section 45A(1) that will attract the levy of penalty. Mens rea or the mental element is embedded in the crucial words "evaded" or "sought to be evaded" occurring in section 45A(1) of the Act. As mentioned earlier, having regard to the preliminary stages of the proceedings, it is not for this Court to adjudicate on the points raised at this stage. Needless to say, the first respondent will have to keep the principles laid down in Sudhi's case [1992] 85 STC 337 (Ker) in mind while dealing with the matter on its merits and if any penalty is to be imposed regarding the quantum of penalty. I leave the matter there without expressing any opinion on the merits. 15. The petitioner had a further contention in the original petition that the principles of natural justice are being violated in the enquiry in that the first respondent is relying on the statements recorded from the distributors without producing them for being cross-examined despite request. This point does not require any further consideration, inasmuch as the first respondent has in his counter-affidavit filed in this Court stated that he has issued summons to all the distributors to appear before him on February 12, 1993, for being cross-examined by the petitioner. The proceedings could not, no doubt, go on on February 12, 1993, because of the pendency of this original petition, but the first respondent shall issue summons to these persons whose statements he intends to rely on, to appear for being cross-examined by the petitioner. The original petition is dismissed subject to the above observations. Petition dismissed.