WIPRO GE HEALTHCARE PRIVATE LIMITED (FORMERLY WIPRO GE MEDICAL SYSTEMS LIMITED) Vs. THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES

JUDGEMENT

(1.) This appeal is by the appellant challenging the order passed by the Additional Commissioner of Commercial Taxes setting aside the order passed by the Joint Commissioner of Commercial Taxes who had set aside the order imposing the penalty and restoring the penalty. The appellant-M/s. Wipro GE Healthcare Private Limited is a private limited company dealing with manufacturing and sale of medical diagnostic equipments and also trades in these commodities by importing the same from other countries. M/s. Vijaya Medical Centre, Vishakapatnam has obtained quotation from M/s. GE Pacific Private Limited, Singapore for purchase of used medical diagnostic equipments by name a magnetic resonance imaging system. The purchaser M/s. Vijaya Medical Centre who is at Vishakapatnam informed the seller that the site for installation will be ready by the end of March 2002. Meanwhile, the appellant received the goods from the customs authorities on an authorisation from M/s. Vijaya Medical Centre and the goods, after release, were stored with Transport Corporation of India, a transporting agency for the purpose of shifting the goods to Vishakapatnam from Bangalore. The goods consignment notes were also raised by consignment Nos. 04990 and 04991, both dated 26-3-2002. These consignment notes were raised without delivery of the goods to the transporting agency. The goods were transported by air way Bill No. 546717863T, dated 29-3-2002. The goods were cleared by the customs authorities on 25-5-2002. The goods were under the custody of C and F agent M/s. Jayem Impex Private Limited, Bangalore till it was delivered to the transporting agency TCI. These goods, in the meanwhile was shifted to the appellant's godown in the compound of Alembic Glass Company. M/s. Vijaya Medical Centre requested the appellant to transport the goods to Vishakapatnam. Therefore, these goods were moving from godown of TCI to Vishakapatnam with necessary documents on 23-12-2002. On 24-12-2002, the vehicle was intercepted by the Check-post Authorities. On such interception, it was called upon to produce documents. 14 documents were tendered to the authorities. The said documents are as under:

(2.) On verification of the said documents, authorities got certain doubts. The same was brought to the notice of the Joint Commissioner of Commercial Taxes (Vigilance) who directed the authorities to cause verification at the transport godown and accordingly, verification was done. After verification, a notice was duly served on the driver on 2-1-2003 proposing as to why a penalty of Rs. 78,44,555/- being thrice the amount of tax applicable on the value of the goods at Rs. 3,92,22,776/- should not be levied. On 8-1-2003, the assessee appeared before the authorities, filed their reply to the notice. After considering their objections, the authority was of the view that there are various inconsistencies in the transaction and establishes a case of evasion of sales tax. Therefore, he deemed it fit to confirm the penalty proposed in the notice issued and therefore, the penalty of Rs. 78,44,555/- was levied. Aggrieved by the same, the appellant preferred an appeal under Section 20(5) of the Karnataka Sales Tax Act, 1957 (for short, hereinafter referred to as 'the Act').

(3.) The Appellate Authority, after considering the entire material on record, was of the view that the goods were imported from outside the country and were on movement to Vishakapatnam. There was a delay in the process of movement because of the purchaser's instruction, not to transport the goods till the site is ready. Therefore, these goods were lying in the city of Bangalore, sometimes in the Transport Corporation of India and sometimes with the appellant's godown in Alembic Glass Factory's compound. Therefore, the Taxing Authorities looked at them with suspicious eyes and inferred mala fide intention in the movement of the goods. The appellant, instead of clarifying the confusion, has adopted a policy of confrontation. However, the material on record discloses that there is no mala fide intention of evading tax. When these goods were imported goods with valid documents from customs authorities, the goods being technically sensitive, they had to be transmitted from one place to another to keep them in good condition, which happened in this case. The purchaser created unnecessary problems in requesting not to transport the goods till the site is ready, but for this lapse, the documents produced clearly shows the transaction in question is a bona fide one. The authorities, without verifying carefully the documents, in the facts of this case, have proceeded to impose a penalty which is unsustainable. Therefore, the appeal came to be allowed setting aside the penalty imposed.