KARNATAKA JEWELS LIMITED v. ASSISTANT COMMERCIAL TAX OFFICER, COMMERCIAL TAX CHECK-POST — 1998 DIGILAW 409 (KAR)

S. R. VENKATESHA MURTHY, J. ( 1 ) THIS revision is directed against the order dated October 13, 1995 in S. T. A. No. 1093 of 1994 on the file of the Sales Tax Appellate Tribunal. ( 2 ) ON August 6, 1992, a Maruti van bearing No. CAT 1717 was intercepted at about 12 noon and inspected by Assistant Commercial Tax Officer, Hosur Road, Commercial Tax Check Post, attibele. At that time the car was found to be carrying 11,400 watch dials as against 7,185 watch dials noted in the delivery note bearing No. 41103 in form No. 39. The first respondent having found that there was variance between the delivery note referred to above and the goods carried in the van, regarding the number of dials, notice under Section 28a (2) of the Karnataka Sales tax Act, 1957 (hereinafter called "the Act" for short) was issued proposing a penalty of Rs. 86,482. The revision petitioner did not show any cause to the notice. Consequently a penalty of rs. 86,482 was levied and communicated to him on August 9, 1992. ( 3 ) THE petitioner being aggrieved by the order, annexure B, preferred an appeal to the Deputy commissioner of Commercial Taxes (Appeals), Bangalore and contended that annexure B was unsustainable and produced certain other documents such as gate pass, invoice, etc. The appellate authority rejected the appeal on merits as per annexure C, dated February 14, 1994. The second appeal to the Sales Tax Appellate Tribunal proved futile. Hence, this revision. ( 4 ) IN this revision, the following questions of law arised for decision : " (i) Whether, on the facts and circumstances of the case, the Tribunal is correct in law holding that the penalty can be levied on entire consignment ? (ii) Whether on the facts and circumstances of the case the Tribunal is correct in holding that penalty can be levied on 7,185 pieces also ? (iii) Whether, on the facts and circumstances of the case, Tribunal was right in law confirming the lower authorities order ? (iv) Whether, on the facts and circumstances of the case, the order passed by the Tribunal is valid and sustainable in law ? (v) Whether, on the facts and circumstances of the case, the respondent 1 was right in estimating the value of goods ? (iv) Whether, on the facts and circumstances of the case, the order passed by the Tribunal is valid and sustainable in law ? (v) Whether, on the facts and circumstances of the case, the respondent 1 was right in estimating the value of goods ? (vi) Whether, on the facts and circumstances of the case, respondent 1 was right in rejecting form 39 ? (vii) Whether, on the facts and circumstances of the case, the penalty levied Rs. 86,482 is proper and correct ?" ( 5 ) THE learned counsel for the revision petitioner sought to contend that the imposition of penalty of Rs. 86,482 is illegal and cannot be sustained ; that the Tribunals' rejection of additional evidence tendered by the petitioner before the appellate authority is improper and that the order impugned is otherwise illegal and should be set aside. ( 6 ) THE facts are not in dispute and they are governed by Section 28a of the Act as it stood at the time of interception in question. On the day the interception took place, admittedly there was variance between the number of watch dials mentioned in form No. 39 and the actual number being transported. The learned counsel for the revision petitioner sought to contend that there was no basis for the first respondent to have imposed a penalty of Rs. 86,482 and that the first respondent could at best have imposed a penalty on the number of watch dials actually transported in excess of what was mentioned in form No. 39 and not on the entire number of watch dials being transported. This submission in our opinion is baseless and cannot be sustained. 86,482 and that the first respondent could at best have imposed a penalty on the number of watch dials actually transported in excess of what was mentioned in form No. 39 and not on the entire number of watch dials being transported. This submission in our opinion is baseless and cannot be sustained. Section 28a, sub-claues (4) and (5) reads as follows : " (4) The officer-in-charge of a check-post or a barrier or any other officer not below the rank of a Commercial Tax Inspector and not higher in rank than an Assistant Commissioner of commercial Taxes may, in respect of any contravention of or non-compliance with the provisions of Sub-section (2) or (3) or (3a) or (3b) and for which sufficient cause is not furnished, levy a penalty not exceeding the limits specified in Sub-section (5), The aforesaid officer may also levy penalty where the declaration made under Subsection (2) is false in respect of the materials furnished therein or where the particulars furnished in the records do not tally with the goods actually being transported or are found to be not relating to such goods : provided that before levying any penalty under this sub-section, the officer shall give the person-in-charge of the goods vehicle or boat a reasonable opportunity of being heard. (5) The penalty leviable under Sub-section (4) shall not exceed double the amount of tax leviable in respect of the goods under transport : provided that in the case of goods specified in the Second, Third and Fourth Schedules, if the owner or the person in-charge of the goods vehicle or boat produces at the time of interception of the goods vehicle in question proof to show that the goods in question have already suffered the single point tax under this Act, no penalty shall be leviable. " The power of the officer in-charge of the check-post to levy penalty depends on the findings regarding the infractions enumerated in Subsection (4) of Section 28a of the Act. Admittedly, the revision petitioner carried form No. 39 and disclosed a certain number of watch dials but actually there was excess watch dials. It is clear therefore, that the first respondent had the factual basis for imposing the penalty as the particulars furnished in form No. 39 did not tally with the goods actually being transported at the time of interception. It is clear therefore, that the first respondent had the factual basis for imposing the penalty as the particulars furnished in form No. 39 did not tally with the goods actually being transported at the time of interception. ( 7 ) THAT the petitioner was given a reasonable opportunity of being heard regarding the proposed penalty is not in dispute. The grievance is that the imposition of penalty was in contravention of the law, inasmuch as, the declared goods had to be excluded for the purposes of imposition of penalty. This submission in our opinion cannot be sustained in view of the clear mandate of sub-section (5) of Section 28a of the Act. A penalty leviable under Sub-section (3) of Section 28a of the Act is unrelated to the question of tax leviable in respect of the goods declared in form No. 39. It cannot be denied that the goods under transport at the time of interception was 11,400 watch dials. The penalty that is leviable is double the tax payable in respect of the goods under transport and is not related to the extent of evasion, as sought to be suggested. The penalty that has been imposed is double the tax at the rate of 12 per cent on 11,400 watch dials namely rs. 86,482. In the circumstances, the order impugned is in accordance with law. ( 8 ) THE other contention is regarding rejection of documents subsequently produced in support of the petitioner's case. It essentially related to questions of fact found against the petitioner and cannot be challenged in this revision. No case of failure to decide or decided erroneously, the question of law by the Appellate Tribunal, has been made out, calling for interference in revision under Section 23 of the Act. The revision has no merit and is dismissed.