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2010 DIGILAW 828 (KER)

A. John Kennedy v. State of Kerala

2010-10-26

C.K.ABDUL REHIM

body2010
JUDGMENT C. K. Abdul Rehim, J. 1. The common petitioner in all these 3 cases claims to be the authorised promoter in the State of Kerala for lottery organised by the State of Sikkim, coming within the definition of promoter under S.2(1) of the Kerala Tax on Paper Lotteries Act, 2005 (hereinafter referred as the Taxation Act, for short). The cause of action in these cases relates to actions initiated by the 6th respondent pursuant to detention of a consignment of paper lotteries transported to the State of Kerala, in vehicle bearing No. TN - 07 / AD - 5566. 2. WP (C) No. 26912/2010 was filed seeking to quash Ext. P10 & P11 notices and Ext. P13 order issued by the 6th respondent, invoking powers under S.30(1) & (2) of the Taxation Act. Through Ext. P13 order the 6th respondent took a decision to detain and seize the goods along with the vehicle, to be produced before the 5th respondent for proceeding with further steps under S.30(1) & (2). 3. On the basis of Ext. P13 order in WP (C) 26912/2010, proposal notices were issued by the 5th respondent for imposition of penalty under S.27(1) and S.30(1) of the Taxation Act. Challenge in WP (C) No. 28060/2010 is against Ext. P18 therein, notice proposing penalty under S.27(1). Challenge in WP (C) 28081/2010 is against Ext. P16 therein, notice proposing penalty under S.30(1). The 5th respondent was restrained by this Court through an interim order, from passing final orders based on such notices, and no order of penalty was issued till date. 4. A brief history of the case is narrated here under, referring to exhibits marked in WP (C) 26912/2010. On interception of the transport the 6th respondent issued Ext. P10 notice alleging that, on verification of documents accompanying the transport, certain discrepancies were noticed regarding change in the scheme from 19/08/2010 onwards, with respect to Draw No. 232 of Sikkim Super Deluxe and Sikkim Super Classic lotteries, resulting in doubling of the prize to Rs.50 lakhs and increase in the price of lotteries to Rs.20/-. As Advance Tax was remitted without considering such change, a willful plan to evade payment of tax and fraudulent movement of lottery tickets was suspected. Hence, the person in charge of the vehicle was requested to make necessary arrangements for physical verification, in order to quantify the number of tickets transported. 5. As Advance Tax was remitted without considering such change, a willful plan to evade payment of tax and fraudulent movement of lottery tickets was suspected. Hence, the person in charge of the vehicle was requested to make necessary arrangements for physical verification, in order to quantify the number of tickets transported. 5. After conducting physical verification, Ext. P11 notice was served on the petitioner and on the driver of the vehicle. In Ext. P11 it is alleged that the petitioner has not produced certificate obtained from the Assistant Commissioner to prove payment of the Advance Tax with respect to the newly launched scheme and the details regarding the scheme was not informed to the Assistant Commissioner, enabling verification regarding correctness of the tickets transported. It is further alleged that the Advance Tax already remitted is for the old scheme which was discontinued with effect from 18/08/2010, and the said payment could not be considered as remittance for the newly introduced draws. Yet another allegation is that, on verification of the lottery tickets it was revealed that the draws will be conducted on 30/08/2010 and on 31/08/2010, which is Onam and Ramzan festival seasons in Kerala, and therefore the draws are to be treated as Bumper draws, as defined under S.2(c) of the Taxation Act, which will attract payment of Advance Tax at the rate of Rs.17 lakhs per draw, and that remittance of such amount was not made. It is alleged that the transport was without proof regarding payment of tax and therefore liable for detention under S.30(1). The petitioner was requested to file objections if any against the proposal for seizure of the goods and the vehicle, to be produced before the 5th respondent under S.30(1) & (2) of the Taxation Act. The objections in this regard was requested to be filed within 3 hours and an opportunity of hearing was afforded within that time. In the copy of Ext. P11 which was served on the driver of the lorry the time for filing objection was stipulated as 24 hours. 6. Ext. P12 & P12(a) are objections filed by the petitioner and the Assistant Director (Lottery), Government of Sikkim, respectively. Ext. P13 is the order issued by the 6th respondent after considering such objections. In the copy of Ext. P11 which was served on the driver of the lorry the time for filing objection was stipulated as 24 hours. 6. Ext. P12 & P12(a) are objections filed by the petitioner and the Assistant Director (Lottery), Government of Sikkim, respectively. Ext. P13 is the order issued by the 6th respondent after considering such objections. It is found that the Advance Tax already remitted by the petitioner, for draws to be conducted upto 31/08/2010 under the old scheme, could not be considered as remittance for the newly introduced draws. Further, in the light of the definition in S.2(c) of the Taxation Act, the lotteries under transport need be treated as lotteries for Bumper Draw, which attracts payment of Advance Tax at the rate of Rs.17 lakhs per draw, and the same was not seen remitted. Under such circumstances, alleging that the transport was without proof of payment of tax, it was held that the lottery and the vehicle is liable to be detained under S.30(1). The (6th respondent observed that, since there is an increase in prize money to Rs.50 lakhs from Rs.20 lakhs and since the draws are proposed to be conducted on 30/08/2010 and on 31/08/2010 which is Onam and Ramzan festival season in Kerala, the ingredients of Bumper Draw was satisfied and it should be considered as a special draw conducted on festival season promising more amount as prize, than it was promised in the usual draws. Thus, on the basis of the conclusion that the tickets pertain to Bumper Draw of Sikkim Super Deluxe and Sikkim Super Classic lotteries for which Advance Tax was not remitted, the movement of lottery tickets was held to be illegal and fraudulent, warranting action under S.30(1) & (2) of the Taxation Act. Hence the 6th respondent in exercise of powers conferred upon him under S.30(1) & (2) read with R.19 of the Kerala Tax on Paper Lotteries Rules, 2005 (hereinafter referred to as the Rules), ordered seizure of the goods and the vehicle, for production before the 5th respondent for initiating further proceedings. 7. Challenge against Ext. Hence the 6th respondent in exercise of powers conferred upon him under S.30(1) & (2) read with R.19 of the Kerala Tax on Paper Lotteries Rules, 2005 (hereinafter referred to as the Rules), ordered seizure of the goods and the vehicle, for production before the 5th respondent for initiating further proceedings. 7. Challenge against Ext. P10, P11 & P13 is on the ground that the action initiated by the 6th respondent was totally illegal and erroneous and had resulted in a total erroneous exercise of jurisdiction vested on him and such action had resulted in infringement of fundamental rights of the petitioner protected under the Constitution of India. The consequent actions initiated by the 5th respondent for imposing penalty under S.27(1) & S.30(1) of the Taxation Act, were also challenged contending that such actions were proposed only on the basis of findings in Ext. P13 with a predetermination, only for quantifying the penalty based on such findings. 8. A scanning of the relevant provisions will be beneficial in this context. Conduct of lotteries within the country is regulated by a central legislation, the Lotteries (Regulation) Act, 1998, (hereinafter referred to as the Central Act). S.3 of the Central Act prohibits conduct of lotteries within the country otherwise than as provided under S.4, subject to restrictions imposed thereunder, in sub-sections (a) to (k). S.4 permits the State Governments to organize, conduct, or promote a lottery, subject to such conditions. The Taxation Act is intended only to provide levy and collection of tax on the conduct of paper lotteries within the State. S.6 of the Taxation Act prescribes the rate of tax, at Rs.17 lakhs for every Bumper Draw and at Rs.7 lakhs for any other draw. S.8 deals with filing of returns, completion of assessments, payment of tax, collection and recovery etc: S.8 insists upon every promoter to get himself registered under the Act and it cast obligation on the promoter for submission of returns. Sub-section (3) of S.8 enables the Assistant Commissioner to make assessment on the basis of the return. Sub-section (4) of S.8 further enables best Judgment assessment in where the return submitted is incorrect or incomplete. Sub-section (5) of S.8 enables imposition of penalty equal at two times of the tax amount in addition to collection of tax, when there is any non - disclosure in the return. Sub-section (4) of S.8 further enables best Judgment assessment in where the return submitted is incorrect or incomplete. Sub-section (5) of S.8 enables imposition of penalty equal at two times of the tax amount in addition to collection of tax, when there is any non - disclosure in the return. Sub-section (2) of S.8 prescribes that before submission of the return the promoter is bound to pay Advance Tax, as provided under S.10, to the extent of full amount tax payable by him and to furnish satisfactory proof of such payment along with the return. It is mentioned therein that the payment of such Advance Tax will be deemed as payments effected towards final assessment. 9. S.10 of the Taxation Act which deals with Payment of Advance Tax, is extracted below: 10. Payment of tax in advances.-- (1) Subject to such rules as may be prescribed, every promoter shall submit on the 1st day of every month, if the first day being a holiday, on the immediate next working day, to the Assistant Commissioner a statement containing such particulars, as may be prescribed relating to the draws to be conducted during the month commencing from the next succeeding month and shall pay in advance the full amount of tax payable by him under this Act, in respect of the draws shown in the Statement and the amount so payable shall for the purpose of S.12, be deemed to be an amount due under this Act from such promoter. (2) If default is committed in the payment of tax for any month, whether a statement as required under sub-section (1) is filed or not, or if the amount of tax paid is less than the amount of tax payable for any month, the promoter defaulting payment of tax or making short payment of tax shall, in addition to the tax, pay interest calculated at the rate of two per cent per month from the date of such default or short payment to the date of payment of such tax. (3) If no such statement is submitted by a promoter under sub-section (1), before the date specify or if the statement submitted by him appears to the Assistant Commissioner to be incorrect or in complete, the Assistant Commissioner may assess the promoter provisionally for that month to the best of his judgment, recording the reasons for such assessment, and proceed to demand and collect the tax forthwith on the basis of such assessment, the above said tax shall immediately be adjusted towards the security amount paid under sub-section (1) of S.7. (4) Without prejudice to the actions contemplated under sub-sections (2) and (3) above, the Assistant Commissioner shall cancel the registration of the promoter granted under this Act and on such cancellation of registration, the promoter shall not be entitled to sell lottery tickets within the State: Provided that before taking action under this sub-sections (3) and (4), the promoter shall be given a reasonable opportunity of being heard: Provided further that if the promoter makes payment of the defaulted tax with interest the Assistant Commissioner, on application, may register the promoter or such person on payment or registration/renewal fees and security at the prescribed rate 10. On the facts of the case at hand it is admitted that the petitioner is the registered promoter for the lottery organized by the state of Sikkim and he had remitted Advance Tax on the first day of July, 2010 (revised payment made on 03/07/2010 also). It is also admitted that the organizing State (Government of Sikkim) had revised the scheme with respect to draws proposed on 30/08/2010 and on 31/08/2010, which pertain to the detained lottery tickets. Admittedly, by virtue of the revision in the scheme the prize money as well as the price of tickets were enhanced. It is very pertinent to note that the levy and collection of the tax is on the basis of Draw and not on the basis of Scheme, going by S.6, S.8 and S.10 of the Taxation Act. As per S.6, there is no difference in the rate of tax with respect to any draw other than a Bumper Draw. There is no prohibition or restriction either in the Central Act or in the Taxation Act with respect to change or revision of the scheme, at any time. But what is required is only a notification by the organising state. There is no prohibition or restriction either in the Central Act or in the Taxation Act with respect to change or revision of the scheme, at any time. But what is required is only a notification by the organising state. There is some controversy with respect to the fact of receipt of intimation regarding change of the scheme. But that controversy is totally irrelevant for deciding the issue involved, which basically pertains to payment of Advance Tax. Provisions contained in the Taxation Act or in the Rules does not indicate anything to the effect that, the Advance Tax received with respect to a particular draw proposed on a specific date under a particular scheme could not be reckoned as payment of Advance Tax for the draw to be conducted on that particular day, even if there any change in the scheme is effected in between. No deficiency in payment of Advance Tax can be attributed, merely because there occurred a change or revision in the scheme in between the date of payment and the date of draw. Deficiency in payment of Advance Tax will arise only in a case where the organizer is changing the nature of draw to a Bumper draw, after payment of the Advance Tax for an ordinary draw. Therefore the prime question arising for consideration is; (i) whether the detained lottery tickets pertains to a Bumper draw or not and (ii) whether the actions contemplated under S.30(1) & (2) and S.27(1) were warranted in a case where there is only a deficiency or short - remittance in the amount of Advance Tax. 11. Before considering the issues as mentioned above, a more fundamental question regarding maintainability of these writ petitions need be looked into. On behalf of the respondents it was contended that the proceedings initiated under S.30 has not yet been culminated in an order imposing penalty. It is only at the stage of a show - cause notice and therefore the writ petition is highly premature. It is also contended that the Taxation Act provides alternate remedy by way of statutory appeal which is efficacious in nature, and therefore this Court should refrain from invoking its discretionary jurisdiction vested under Art.226 of the Constitution of India. 12. It is also contended that the Taxation Act provides alternate remedy by way of statutory appeal which is efficacious in nature, and therefore this Court should refrain from invoking its discretionary jurisdiction vested under Art.226 of the Constitution of India. 12. Per contra, it was contended by the petitioner that the proceedings initiated by the 6th respondent is per se illegal, erroneous and unsustainable and there is total erroneous exercise of jurisdiction vested on the 6th respondent. Since the 6th respondent had conducted a full fledged adjudication and arrived at conclusions touching merits of the issue, further actions now being pursued by the 5th respondent are only consequential. If the basis upon which the proceedings now being pursued, which is the findings contained in Ext. P13, is found to be illegal and unsustainable, then there is no justification in permitting the 5th respondent to continue with such proceedings, is the argument. Further contention is that the action now being pursued by the 5th respondent is totally pre - conceived and predetermined, based on conclusions contained in Ext. P13. Considering those findings, only a quantification of penalty alone is left to be decided. Therefore the alternate remedy, even if available, is not a bar in entertaining the writ petition, is the contention. 13. Mr. Althaf Ahammed, senior counsel appearing on behalf of the petitioner, placed reliance on various decisions of the Hon'ble Supreme Court to canvass the position that, availability of an alternate remedy is not a bar for entertaining writ petition under Art.226. In Siemens Ltd. v. State of Maharashtra, 2007 (1) KLT 88 the Hon'ble Supreme Court observed that, when a statutory authority had already applied its mind and formed an opinion regarding liability or otherwise of the petitioner, and if in passing such an order the authority had already determined the liability, it does not remain in the realm of a show - cause notice and in such case the writ petition is maintainable. Learned senior counsel contended that the 6th respondent after conducting adjudication, had already arrived at conclusions regarding liability and what remains is only a quantification. Therefore correctness of such findings are amenable to challenge under Art.226, is the contention. 14. Learned senior counsel contended that the 6th respondent after conducting adjudication, had already arrived at conclusions regarding liability and what remains is only a quantification. Therefore correctness of such findings are amenable to challenge under Art.226, is the contention. 14. In M.P. State Agro Industries Development Corporation Ltd. and Another v. Jahan Khan, 2007 (10) SCC 88 , the Hon'ble Supreme Court observed that there is no gainsaying that in a given case the High Court shall not entertain a writ petition on the ground of availability of alternate remedy, but the said rule could not be of universal application. The exclusion of writ jurisdiction due to availability of alternate remedy, is a rule of discretion and is not one of compulsion. In an appropriate case, inspite of availability of alternate remedy, a writ Court may still exercise its discretionary jurisdiction for a judicial review in at least 3 contingencies; viz., (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is under challenge. According to learned senior counsel, there is clear infringement of fundamental rights in this case, because the proceedings initiated is wholly without jurisdiction. 15. Yet another decision of the Hon'ble Supreme Court in Dhampur Sugar Mills Ltd. v. State of U.P. and Others, 2007 (8) SCC 338 was pointed out to contend that once a policy decision is taken by the Government touching the issue involved, then the remedy of appeal cannot be termed as alternative or equally efficacious. In such cases filing of appeal is virtually from Caesar to Caesar wife and it will be an empty formality orfutile attempt. On the basis of the dictum, learned senior counsel pointed out that ample evidence is available to show that the Government have adopted a policy to restrain selling of lottery tickets organised by other states, and it is as part of such policy that the proceedings for detention was initiated. In this regard, attention was drawn to an order issued by the State Government, which is extracted in & writ petition filed by the very same petitioner. By the said order the State Government had suspended its officers on the allegation that they have erroneously accepted payment of Advance Tax from the petitioner. In this regard, attention was drawn to an order issued by the State Government, which is extracted in & writ petition filed by the very same petitioner. By the said order the State Government had suspended its officers on the allegation that they have erroneously accepted payment of Advance Tax from the petitioner. However, learned counsel appearing for the respondents objected such reference contending that the said document could not be taken note of as it is not part of pleadings in the present cases. 16. Mr. Jaideep Guptha, senior counsel appearing on behalf of respondents, raised contentions to the effect that none of the legal precedents cited above are applicable to the context of the present cases. It was pointed out that the issue involved in Dhampur Sugar Mills Ltd. case (cited supra) is one regarding territorial jurisdiction and lack of jurisdiction was alleged in that case. It was also contended that in the present cases there is no involvement of any Government policy in order to attract the dictum laid in M.P. State Agro Industries Development Corporation case (cited supra). According to learned senior counsel, the proceedings now initiated invoking S.30 has not culminated in any order imposing penalty and the petitioner could not preempt that penalty will be imposed by the 5th respondent. Therefore the apprehension expressed is highly premature, and availability of alternate remedy will prevent the petitioner from agitating the issue in these writ petitions, is the contention. 17. An in - depth consideration of the provisions contained in S.30 of the Taxation Act will be beneficial in deciding the issue, which is extracted hereunder: 30. Fraudulent transport of lottery tickets. Therefore the apprehension expressed is highly premature, and availability of alternate remedy will prevent the petitioner from agitating the issue in these writ petitions, is the contention. 17. An in - depth consideration of the provisions contained in S.30 of the Taxation Act will be beneficial in deciding the issue, which is extracted hereunder: 30. Fraudulent transport of lottery tickets. -- (1) The transporting of lottery tickets without the authority of the Certificate of Registration and proof of payment of tax provided under this act is subject to detention by the officer authorized in this behalf and the transporter is liable to pay a penalty of Five Lakh Rupees or double the amount of the tax sought to be evaded, fraudulently from payment, whichever is higher: Provided that if the aforesaid amount is not paid, without prejudice to the recovery of the aforesaid fine, the vehicle through which the lottery tickets were transported shall liable to be confiscated, and the Assistant Commissioner shall sell them in public auction and the proceeds thereof equivalent to five lakh rupees or double the amount of the tax sought to be evaded whichever is higher shall be remitted to Government and the balance if any due after deducting the incidental expenses shall be refunded to the person from whom the lottery tickets and vehicle are confiscated: Provided further that penalty under this sub-section shall not be imposed or no action shall be taken without giving an opportunity to show - cause and without giving a reasonable opportunity of being heard to the transporter, person in charge, or the registered owner of the vehicle. (2) The officer authorized to detain the lottery tickets shall seize the lottery tickets along with the vehicle in which they were transported and cause to he produced it before the Assistant Commissioner of competent jurisdiction within forty eight hours of such detention and seizure 18. As indicated in the heading, S.30 contemplates actions when a fraudulent transport of lottery tickets is suspected. Penalty is liable to be imposed only when it is proved that the transport of lottery tickets was effected without authority of the certificate of registration and / or proof of payment of tax, and only when it is established that there was a fraudulent attempt for evasion of tax. Sub-section (1) & (2) enumerate two distinct steps in the proceedings. Sub-section (1) & (2) enumerate two distinct steps in the proceedings. Under sub-section (2) an officer can detain and seize the lottery tickets along with the vehicle and cause its production before the Assistant Commissioner, within 48 hours. Sub-section (1) says that on such detention by an authorised officer, the transporter is liable to pay penalty of Rs.5 lakhs or double the amount of tax sought to be evaded fraudulently, whichever is higher. R.19 authorises all officers of the Commercial Tax Department not below the rank of Assistant Sales Tax Officer / Inspector as officer authorised to inspect and seize the vehicles and they should produce the same before the Assistant Commissioner concerned. The proviso to S.30(1) as well as sub-section (2) of S.30 will clearly indicate that the power to impose penalty is vested only with the Assistant Commissioner, even though power of detention and seizure is conferred on officers in the rank of Assistant Sales Tax Officers / Inspectors. 19. Going by the above provisions, it is doubtful as to whether an adjudication is contemplated at the level of the officer detaining or seizing the transport. It is clear and evident that if the detaining authority is conducting a full fledged adjudication with opportunity provided to the party for filing objections and for personal hearing, and if such authority is arriving at conclusions justifying the seizure, then the Assistant Commissioner can proceed further only on the basis of such findings. According to Mr. Althaf Ahammed such a full fledged adjudication by the detaining authority was not contemplated under the provisions. But on the other hand Mr. Jaideep Guptha had pointed out that going by the second proviso to sub-section (1) of S.30, issuance of a show - cause notice and affording personal hearing are mandatory with respect to every actions taken under S.30(1). I am of the considered opinion that the above controversy need not be resolved in these cases. It is an undisputed fact that in the case at hand, the detaining authority had conducted an adjudication and arrived at conclusions. Therefore the question remains only as to whether such conclusions are legally sustainable or not, and as to whether the party aggrieved by such conclusions is entitled to challenge it at this stage, in a writ petition without resorting to statutory remedy. 20. Therefore the question remains only as to whether such conclusions are legally sustainable or not, and as to whether the party aggrieved by such conclusions is entitled to challenge it at this stage, in a writ petition without resorting to statutory remedy. 20. While considering the question as mooted above, an examination of the provision relating to appellate power provided under S.14 of the Taxation Act will be beneficial. The provision enables any person objecting to an order affecting him passed by the Assistant Commissioner, to file appeal to the Deputy Commissioner (Appeals). But there is no provision enabling a statutory appeal against an order passed by any officer other than the Assistant Commissioner. Hence it is evident that Ext. P13 order passed by the 6th respondent is not an appealable order under S.14. The revisional powers enumerated under S.15 and S.16 are also not providing any remedy for challenging Ext. P13. Under such circumstances, it is clear and evident that there is no statutory remedy available against Ext. P13 order and contentions of the respondents in this regard need be discarded. 21. A further contention of the respondents seems to be that, the petitioner should wait till the outcome of the final proceedings for imposing penalty, for resorting to the appellate remedy. In my considered opinion it will be highly unjustifiable to hold that a person who is aggrieved by an order which was issued on the basis of an adjudication conducted by a statutory authority and which contains conclusions affecting his rights, should wait for a consequential order to be passed by another higher authority, for challenging correctness of such an order. It is true that an order imposing penalty can be issued only by the Assistant Commissioner, that too after affording an opportunity to show - cause against the proposal and opportunity of personal hearing. But the crucial question is as to whether the Assistant Commissioner is in any way prejudiced or predetermined on the basis of conclusions contained in Ext. P13. Mr. Althaf Ahammed draws my attention to the relevant portions of Ext. P13, which is extracted below: But the verification of the lottery tickets brought in this consignment revealed that the prize money is increased to 50 lakhs from the 20 lakhs in the usual scheme. The draw will be conducted on 30/08/2010 and on 31/08/2010 which is Onam and Ramzan festival season in Kerala. P13, which is extracted below: But the verification of the lottery tickets brought in this consignment revealed that the prize money is increased to 50 lakhs from the 20 lakhs in the usual scheme. The draw will be conducted on 30/08/2010 and on 31/08/2010 which is Onam and Ramzan festival season in Kerala. Considering these facts in the light of definition for bumper draw in S.2(c) of KTPL Act, 2005, the criteria such as 1) special draw conducted on festival seasons - this is Onam and Ramzan season. 2) Promising more amount as prize than that is promised in usual draw of lotteries - here dealer increased prize money to 50 lakhs instead of prize money of 20 lakhs in usual draws. Hence all the serials for bumper draw is clearly applicable for the paper lotteries in this consignment. But Advance Tax for this number draw of Sikkim super deluxe and Sikkim super classic on 30/08/2010 and 31/08/2010 has not been remitted at special circle. Hence the movement of these lottery tickets is illegal and fraudulent. It is clearly a fraudulent movement of goods attracting S.30(1) and (2) of the Act. Further, the senior counsel had drawn my attention to contents of the show - cause notices issued by the 5th respondent under S.27(1) and S.30(1). In Ext. P16 in WP (C) 28081 of 2010 it is observed as follows: I have gone through the documents submitted and verified the seized lotteries. I am convinced that the lotteries are Bumper draw tickets as falling within the definition of S.2 (b) of the Lotteries (Regulation) Act, 1998 and S.2(c) of the Kerala Tax on Paper Lotteries Act, 2005 for the reasons stated in the notice of seizure by the Commercial Tax Inspector, CTCP, Walayar. So also the observations in Ext. P18 in WP (C) 28060/20l0 is as follows: Accordingly the Commercial Tax Inspector, CTCP, Walayar ordered seizure of the lotteries defining the lotteries as Bumper draws within the meaning of S.2(b) of the Lotteries (Regulation) Act, 1998 and 2(c) of the Kerala Tax on Paper Lotteries Act, 2005, and finding fraudulent transportation within the meaning and content of S.30 of the Act and entrusted vehicle No. TN - 07 / AD - 5566 with lotteries of the following description for further action under S.30(1) of the Act, as per Order No. 6866/01/10-11 dated 24/08/2010. From the above extracts it is evident that the 5th respondent is only pursuing further actions based on Ext. P13. Hence I find merit in the contentions of the petitioner that the consequential proceedings now being pursued by the 5th respondent is predetermined and prejudiced based on the findings contained in Ext. P13. Under the scheme of the statute, the Assistant Commissioner is not an appellate authority with respect to decision if any taken by the detaining authority. Further, it could not be presumed that the petitioner is at liberty to challenge the findings contained in Ext. P13, while submitting objections to the consequential notices issue proposing imposition of penalty based on the conclusions in Ext. P13. Hence I find merit in the contentions of the petitioner that, the opportunity for show - cause and personal hearing offered by the 5th respondent will result only in an empty formality and quantification of the amount of penalty alone is left to be decided. Under such circumstances, considering non - availability of appellate remedy against Ext. P13, exercise of discretionary jurisdiction under Art.226, in order to examine legality, propriety and correctness of that order, is justified and warranted. 22. While considering sustainability of Ext. P13 the main question to be decided is as to whether there existed a fraudulent transport with an attempt in evasion of payment of tax. In other words, whether there was a willful and fraudulent act on the part of the petitioner in transporting lottery tickets without authority of registration certificate and / or without proof regarding payment of tax due. As enumerated in the foregoing paragraphs, regarding registration of the petitioner and regarding remittance of Advance Tax for the draws proposed on 30/08/2010 and on 31/08/2010, there is no dispute on facts. The findings in Ext. P13 is to the effect that the payment of Advance Tax already made could not be considered as payment for the draws proposed under the revised scheme, since such draws are bumper draws. In this context an examination of the definition of Bumper draw may be useful. The findings in Ext. P13 is to the effect that the payment of Advance Tax already made could not be considered as payment for the draws proposed under the revised scheme, since such draws are bumper draws. In this context an examination of the definition of Bumper draw may be useful. S.2(a) of the Central Act defines Bumper draw as follows: 2(a) of the Lotteries (Regulation) Act, 1998.-- Bumper draw of a lottery means a special draw of lottery conducted on or during any festival or other special occasion wherein the prize money offered is greater than the prize money offered in the case of other ordinary draw of lotteries S.2(c) of the Taxation Act defines Bumper draw as follows: 2(c) of the Kerala Tax on Paper Lotteries Act, 2005.--Bumper draw means special draw of paper lottery conducted in festival seasons, special occasions or other circumstances, promising more amount as prize, than that is promised in usual draw of lotteries 23. It is worth noticing that ingredients which constitute a Bumper Draw are almost identical in both the definitions. It should be a draw promising more prize money than promised in usual draw and it should be conducted in festival seasons or special occasions or other circumstances. Even though the wording other circumstances is also included in the taxation statute, its meaning can be interpreted only as an ejusdem generis which qualifies festival seasons and special occasions. Going by S.4(j) of the Central Act it is noticed that there is a restriction imposed on any State Government or organiser of a paper lottery to conduct more than 6 Bumper Draws in a calendar year. It is brought out from the records that on 03/07/2010, through Ext. P2 revised statement the petitioner had submitted all details of draws proposed during the month of August, 2010, and Advance Tax was remitted on that basis. Ext. P13 certificate issued by the Assistant Commissioner reveals that the petitioner is a registered promoter and he had filed statements regarding the draws intended for the period from 01/08/2010 to 31/08/2010. Ext. P4 is the letter issued by the Joint Director of Sikkim State Lotteries intimating that Sikkim Government is proposing to revise schemes with respect to the set of weeklies namely, Sikkim Super with effect from 231st draw, from 23/08/2010 onwards. The details regarding the revised scheme was enclosed along with the letter. Ext. Ext. P4 is the letter issued by the Joint Director of Sikkim State Lotteries intimating that Sikkim Government is proposing to revise schemes with respect to the set of weeklies namely, Sikkim Super with effect from 231st draw, from 23/08/2010 onwards. The details regarding the revised scheme was enclosed along with the letter. Ext. P6 is the notification issued by the Government of Sikkim with respect to change of the scheme containing details annexed thereon. The said notification was issued in compliance with the mandatory requirements contained in the Central Act and the Rules framed thereunder. Even though the respondents are disputing receipt of Ext. P4 & P6, despatch of the same by registered post on 17/08/2010 to various authorities concerned, is evident from the postal receipt produced as Ext. P5. However, the said dispute is of not much relevance, because the change of scheme effected in between is admitted. 24. Under the above mentioned circumstances, question to be decided is as to whether the change of scheme will attract any further payment of Advance Tax? And, even on assuming that there is deficiency or short fall in the payment of Advance Tax, any proceedings under S.30 was warranted or not? As stated above, only if the change is with respect to a Bumper draw, the liability fo payment of additional tax will arise. Mr. Althaf Ahammed pointed out that in a case of Bumper draw there will be specific reflection on the lottery tickets itself. Samples of lottery tickets organized by the State of Kerala for conduct of Bumper Draw has been produced for my perusal. The samples of the tickets detained are also produced, which will prove that there is no indication on the tickets to the effect that the same is with respect to any Bumper draw. It is further pointed out that the scheme introduced through Ext. P6 notification is continuing from 23/08/2010 onwards and is still in force. There was no further notification or further change of scheme. This is a clear indication that the change of scheme was not with respect to any Bumper draw. Merely because the prize money was increased, the characteristics of the draw will not be changed, is the contention. It is pointed out that changing of schemes is a usual practice prevalent in conduct of lotteries. This is a clear indication that the change of scheme was not with respect to any Bumper draw. Merely because the prize money was increased, the characteristics of the draw will not be changed, is the contention. It is pointed out that changing of schemes is a usual practice prevalent in conduct of lotteries. The petitioner had produced various documents issued by the State of Kerala which will indicate that in organizing lotteries the State Government was also practicing such changes from time to time. With respect to the allegation that, the date of draw being 30/08/2010 and 31/08/2010 is Onam and Ramzan festival seasons, Mr. Althaf Ahammed pointed out that Ramzan is not a festival but it is a holy month of sacrifice which was observed from 09/08/2010 till 09/09/2010. Even assuming that the reference is with respect to Id - Ul - Fitr, it was on 10th September, 2010. The Onam festival was during the 3rd week of August, 2010 and the dates of Onam was from 23rd to 25th of August. Therefore at any stretch of imagination it could not be presumed that 30th and 31st of August were the dates of Onam or Ramzan (Id - Ul - Fitr), is the contention. Under such circumstances, it is contended that a penal action initiated on the basis of a presumption that the draws in question relates to festival season is absolutely unsustainable. 25. Sri. Jaideep Guptha, learned senior counsel appearing on behalf of respondents kept himself abstained, from elaborating arguments to substantiate that the seized tickets pertain to Bumper draw. According to him, it was not proper on his part to raise any such arguments, because the matter need further consideration by the Assistant Commissioner. But it is pertinent to note that in Ext. P13 there is a clear finding that the tickets in question was intended for a Bumper draw, and the 5th respondent was proceeding further on the basis of such conclusions. The 5th respondent is not an appellate authority and the petitioner could not challenge the findings in Ext. P13, before the 5th respondent. If the basis upon which the detention and seizure ordered is not sustainable, then further proceedings initiated based on such action need be set aside. 26. The 5th respondent is not an appellate authority and the petitioner could not challenge the findings in Ext. P13, before the 5th respondent. If the basis upon which the detention and seizure ordered is not sustainable, then further proceedings initiated based on such action need be set aside. 26. From the rival contentions as illustrated above, it is evident and clear that the entire proceedings initiated under S.30(1) and (2) and under S.27(1) are based on a presumption adopted by the 6th respondent that the proposed draws pertaining to the detained tickets are Bumper draws. The above presumption is very much rebuttable and is strongly refuted on enumerating various factual aspects from the side of the petitioner. But before I proceed to evaluate the question as to whether the presumption arrived at by the 6th respondent is legally valid and sustainable, yet another intrinsic issue need be taken note of. As observed in the foregoing paragraphs an action under S.30 of the Taxation Act is warranted only when it is convinced that there was fraudulent attempts in evasion of payment of tax. In other words, a willful omission or a willful non - disclosure or a willful attempt in evasion, is an essential ingredient to be established in order to attract provision of S.30. Being a proceeding which is purely penal in nature the degree of proof required for initiating steps is distinctly at a higher pedestrial. The element of willfulness or mens rea is an essential ingredient in such case. Learned senior counsel for petitioner placed reliance on various decisions of the Hon'bleApex Court reported in J.K. Synthetic Ltd. v. Commercial Taxes Officer, 1994 (4) SCC 276 , Mukerian Papers Ltd. v. State of Punjab, 1991 (2) SCC 580 and Commissioner of Central Excise, Pune v. SKF India Ltd., 2009 (13) SCC 461 in support of the above proposition. Even otherwise it is well settled principle in taxation law that an action which contemplates penal consequences is essentially distinct from an action fixing liability for payment of tax. In all physical statutes, imposition of penal consequences are provided only with an intention to curb fraudulent and contumacious acts being perpetuated with oblique motives of evading payment of tax. 27. Question to be considered on the facts of the case at hand is, as to whether a penal action as contemplated in the nature of S.30 was warranted. In all physical statutes, imposition of penal consequences are provided only with an intention to curb fraudulent and contumacious acts being perpetuated with oblique motives of evading payment of tax. 27. Question to be considered on the facts of the case at hand is, as to whether a penal action as contemplated in the nature of S.30 was warranted. In a case where only a suspicion is raised, or in a case where there is no specific materials available to prove such fraudulent, wilful or contumacious acts, the penal actions could not be sustained. Much less is in a case where the fraudulent act is alleged on the basis of a presumption or on the basis of an interpretation regarding a factual situation in a particular manner. It is evident that the allegation of fraudulent attempt to evade payment of tax is raised merely on the basis of a presumption evolved by the 6th respondent that due to the change effected in the scheme and due to increase in the prize money offered, and further due to connection with the festival seasons, the tickets in question can be considered as tickets pertaining to Bumper draw Is it a proper and justifiable reason for initiating action for detention and seizure alleging fraudulent attempt in evasion of payment of Advance Tax? The answer can only be an emphatic no Even assuming, without admitting, that the seized tickets pertain to ˜Bumper draw, at the most what exists is only a short fall in payment of Advance Tax. Whether a detention and seizure of the transport and consequent imposition of a huge amount of penalty, coupled with confiscation of the vehicle was warranted? Again the answer can only be a more emphatic no 28. In this regard Mr. Althaf Ahammed had pointed out various other provisions in the Taxation Act which enables appropriate remedial actions, even assuming that there is short fall in remittance. Referring to S.8 of the Taxation Act it was pointed out that, if the Assistant Commissioner is of the opinion that the returns submitted by the promoter contained incorrect details then a best judgment assessment can be finalized. Further, under S.8(5) imposition of penalty equal to two times of the tax amount is possible in such cases, over and above the liability for payment of the tax. Further, under S.8(5) imposition of penalty equal to two times of the tax amount is possible in such cases, over and above the liability for payment of the tax. Further in S.9 of the Taxation Act the Assistant Commissioner is entitled for finalising any assessment or reassessment in case he had reason to believe that any draw had escaped assessment and also in case where it is revealed that the tax had been paid only at a lower rate than the rate which is applicable. S.9(2) further enables imposition of penalty equal to two times of the tax over and above payment of the tax amount, in case it is revealed that the escapement was due to any willful non - disclosure of such Draw Pointing out to sub-S.2 of S.10 itself, it is brought to my notice that, when any default is committed with respect to payment of Advance Tax in relation to any month or in case the amount of tax paid is less than the amount payable, the assessee is liable for payment of interest calculated at the rate of 2% per month, apart from payment of deficit amounts. When all such enabling provisions provide adequate measures for ensuring collection of Advance Tax, imposition of penalty for non - disclosure, assessment of escaped turnover, recoupment of short fall in payments etc: are available, there is no justification at all for initiating steps under S.30 of the Taxation Act, suspecting fraudulent transport of tickets with motive of evading payment of tax, merely on the basis of a presumption that the draw in question can be considered as a Bumper draw when evaluated on the basis of definitions contained in the Act. Therefore I have no hesitation to hold that the actions initiated under S.30(1) was highly unjustifiable, unreasonable and disproportionate. 29. Under the above mentioned circumstances, even without arriving at a final decision as to whether the seized lotteries pertain to Bumper draws or not, it is held that the action of detention and seizure ordered under S.30(1) and (2) of the Taxation Act and the further proceedings now being pursued by the 5th respondent based on findings contained in Ext. P13, are liable to be quashed. Consequently Ext. P16 in WP (C) 28081/10, the show - cause notice issued proposing penalty under S.30(1) as well as Ext. P13, are liable to be quashed. Consequently Ext. P16 in WP (C) 28081/10, the show - cause notice issued proposing penalty under S.30(1) as well as Ext. P18 in WP (C) 28060/10, the show - cause notice issued proposing penalty under S.27(1) are also liable to be quashed, since such steps are initiated based on Ext. P13 order of detention and seizure. It is pertinent to note that under S.27(1) imposition of penalty is warranted only when it is established that the promoter had produced a false declaration, certificate or other document with a view to support his claim that tax has been paid in relation to a lottery ticket held by him. As discussed in the foregoing paragraphs, the declaration, certificate or other document which accompanied the transport was only with respect to Advance Tax already remitted by the petitioner in relation to draws proposed on 30/08/2010 and on 31/08/2010. Therefore it could not be held that the petitioner had furnished any false declaration with respect to such payments made. Therefore the proposal for imposition of penalty under S.27(1) is equally unsustainable, even assuming that such an action was initiated for any reasons other than what is mentioned in Ext. P13. 30. In the result all the 3 writ petitions are allowed. Ext. P10, P11 and P13 in WP (C) 26912/2010, Ext. P16 in WP (C) 28081/2010 and Ext. P18 in WP (C) 28060/2010 are hereby quashed. The respondents are directed to release the detention forthwith, in case it is not already released. 31. With respect to rights of the respondents to finalize the assessments based on the allegation of deficit/ short fall in payment of Advance Tax, as contemplated under S.8, S.9 and S.10 of the Taxation Act, it is pointed out by the petitioner that due to detention and seizure of the lottery tickets the draws in question could not be conducted and no lottery tickets pertaining to the draws proposed on the dates were sold in the state. Hence, according to the petitioner, he is entitled for adjustment / refund of the Advance Tax already remitted. However, the matter is left open for appropriate decision by the competent authority.