POWER MAX Vs. STATE OF KARNATAKA AND ANOTHER

JUDGEMENT

(1.) The assessee has preferred this appeal challenging the order passed by the Additional Commissioner of Commercial Taxes, Zone II setting aside the order passed by the first appellate authority and restoring the order passed by the check-post officer. On September 6, 2006 at 9.00 pm at KPN Speed Parcel and Service Private Limited, Kilari Road, Bangalore, the person in charge of the vehicle did not tender any documents for the movement of 24 carton boxes carried in the vehicle. Suspecting the genuineness of the transaction, G.C. endorsement was issued directing the transporter to inform the responsible person to attend for physical verification and to ascertain the value of the goods in order to impose penalty. Accordingly, the representative of the transporter filed a letter on September 19, 2006 stating that the assessee has received purchase order from M/s. Sarvodaya Electricals, Chennai on September 2, 2006 and has dispatched the goods in vehicle No. 2862 on September 6, 2006 through KPN Speed Parcel and Service Private Limited. The documents are pasted to the parcel and a copy of the said documents were put inside the carton boxes, therefore they requested for physical verification of the goods.

(2.) On September 22, 2006 a physical verification was done by opening the carton boxes. During such verification it was noticed no bill was fastened on any of the carton boxes. However, inside one of the boxes bill No. 2862 of September 16, 2006 issued by the assessee in favour of M/s. Sarvodaya Electricals, Chennai, of Rs. 3,99,472 was found. It was kept in between the goods in the carton box which could not be easily traceable. A mahazar was drawn. Therefore, the check-post officer came to the conclusion that it indicates an intention of evasion of tax. With an intention to avoid the collection of bill from the authorities the bill was kept in between the goods in the carton box which is not easily traceable. As per the provisions of the Karnataka Value Added Tax Act, 2003 the goods are required to be accompanied by valid documents and also it is to be tendered when the authority demand for checking, the documents were not produced at the time of checking, therefore the assessee has contravened the provisions of section 53(2) of the Act. Therefore, a show-cause notice on September 22, 2006 was issued after recording the reasons in detail and the total penalty proposed' was Rs. 1,73,880 on the estimated value of Rs. 4,63,680 after allowing 30 percent discount on MRP price. Notice was served on the transporter on September 22, 2006 and he was granted seven days time to file objections.

(3.) Objections were filed. After considering all the objections the check-post officer held that keeping the documents inside the boxes cannot be considered as the goods are accompanied by the valid bill since the documents could not be obtained without opening the box. Therefore, he proceeded to impose a penalty of Rs. 1,73,880.