STATE OF KERALA Vs. SURFACE COATS NEELIMANGALAM

JUDGEMENT

(1.) Heard the counsel for both the parties.

(2.) Leave granted.

(3.) These appeals are preferred against the judgment of a division bench of the Kerala High court allowing the appeals preferred by the respondent and deleting the penalty levied upon it. The respondent filed returns for three assessment years, namely 1983-84, 1984-85 and 1985-86. In these returns, the respondent disclosed certain turnover, but claimed that the entire turnover was exempt from tax on the ground that the products were of an industry which were exempted from sales tax by a government order. In support of the said returns, the respondent produced a certificate issued by the District Industries Centre, Kottayam, dated 27/10/1986 granting sales tax exemption for the said three years. On the basis of the said certificate, the sales tax officer granted exemption to the extent of ninety per cent of the turnover. Subsequently, however, it appears to have come to the knowledge of the authorities that the said certificate dated 27/10/1986 was a false and forged one. Accordingly, proceedings were taken under Section 45-A (1 (f) against the respondent. After hearing the respondent, penalties were levied. When the matter came to the High court, the High court allowed the appeals on the following ground: the charge against the assessee was one of filing "untrue or incorrect return" within the meaning of Section 45-A (1 ((d) of the Act and not that he tried to substantiate his returns by producing a false certificate; the said false certificate was not filed along with the return but much later, i. e. , about a year later, and that, therefore, the levy of penalty under Section 45-A (l) (ct) is unsustainable in law. So far as the reasoning of the High court, as contained in the order under appeal is concerned, we find it difficult to agree with it. In the returns filed by the respondent, it claimed a total exemption of its turnover from the levy of sales tax on the ground that the same is exempted by virtue of a government order. It is only in support of the said plea that it purported to obtain and file a certificate which was found to be forged. In the circumstances, it must necessarily follow that the returns filed were indeed untrue and incorrect. The claim for exemption was undoubtedly a false one, i. e. , an untrue and incorrect one. The fact that thecertificate in support of the said plea was filed later does in no way detract from the fact that the returns filed were untrue and incorrect. In any event, it makes no difference whether the forged certificate was filed along with the returns or at a later point of time.