SHANTI ENTERPRISES Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) IN this appeal under Section 24 (1) of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as the Act the appellant calls in question the order dated 31st March 1997 passed by the Addl. Commissioner of Commercial Taxes, Bangalore, in No. BCD I/smr/kst/cr 71/96-97, wherein he has restored the order passed by the Commercial Tax Officer levying the penalty.

(2.) FEW facts which are necessary for the disposal of this appeal can be stated briefly: the appellant is a registered dealer under the Karnataka Sales Tax Act and the Central Sales Tax who deals in electrical items. The appellant is also engaged in the execution of works contract in electrification, erection and maintenance of electrical machinery equipments, lights etc. The appellants case is that he purchases goods in the State as well as outside the State for the purpose of selling the electrical goods and for execution of the contract work. The appellant received an order from M/s. Rajkumar Cultural Cottages Pvt. Ltd; to execute electrification work of M/s. Rajkumar Resorts situated at Hosahoddya village, Doddaballapur Taluk, Doddaballapur, Bangalore. The said resort placed an order with MI s Oriental Electricals at Madras who in turn placed an order with M/s Boltan Cable Industries, Jaipur with instructions to supply the goods to the appellant. The goods in question were accompanied with an invoice No. 334 dated 19. 10. 1995. The goods reached Nelamangala on 23. 10. 1995. The driver of the vehicle in question was able to contact the appellant only on 25. 10. 1995 in view of the intervening Deepawali holidays. The appellant, it appears, informed the driver of the lorry to go towards Doddaballapur to unload the goods at the work spot situated at Rajkumar Resorts at Doddaballapur and to wait at the land mark at M/s. Venkateshwara Distilleries situated at Dodclaballapur Road. The driver was also informed that Form 39 would be sent to him showing the destination delivery. When the driver along with the goods was waiting at the spot as informed for Form 39, the Commercial Tax Officer Control Room Bangalore was on his rounds came to the driver and asked him to produce the relevant documents for movement of the goods. The driver produced the invoice No. 334 dated 19. 10. 1995 along with L. R. No. 8502888 and informed the officer that he was waiting for Form 39 which is to be sent by the appellant as according to him the goods were to be delivered to MI s Rajkumar Resorts. The Commercial Tax Officer found that the vehicle in question was carrying goods without proper documentation wherein the invoice which was issued by M/s Bolten Cable Industries was addressed to Oriental Electricals Madras showing the delivery point at Shanthi Enterprises Electricals Pvt. Ltd. , (which is the appellant in this proceedings ). On verification the Commercial Tax Officer found that. there is a difference in the weight of goods. In the circumstances, he initiated proceedings under section 28a (4} of the Act. He also further stated that a per the weighment slip the weight of the goods found to be 8765 kgs but as per L. R. No. 850288 it is 9185 kgs. The Commercial Tax Officer recorded the statement of the driver and a show cause notice was issued as to why a penalty as proposed should not be imposed. In response to the said notice one K. Dhanbalan appeared and filed his written reply. After due verification of all the relevant documents which were available with the driver, the Commercial Tax Officer recorded a finding that there is no proof as to why there is a difference between the weight mentioned in the invoice and that of L. R. receipt. He further found that the driver had failed to produce the required form Le. , Form 39. He further recorded a finding that the purchase order did not tally with the invoice No. 334 dated 19. 10. 1995 and that item No. 5 of the invoice was not found. He further recorded a finding that the, Accounts Manager i. e. , Dhanbalan agreed to pay penalty as proposed. Consequently he passed an order imposing penalty and until the said penalty is paid the goods should be held as security as provided under Section 28a (6) of the Act. The appellant aggrieved by the said order passed by the era preferred an appeal under section 20 (5) of the Act before the Deputy Commissioner of Commercial Taxes (Appeals ). He reiterated his stand that in view of the fact that the shop was closed for a period of three days for Deepawali holidays and the watchman at the shop had instructed the driver of the truck to take the vehicle directly to Rajkumar Resorts and wait near the deviation road to Doddaballapur. He accepted the explanation offered by the appellant and allowed the appeal setting aside the levy of penalty and directed refund of the said penalty which is already collected.

(3.) ONE of the reasons which weighed with the Appellate authority to upset the order passed by the Commercial fax Officer was that at a latter point of time Form 39 was produced and the same was not accepted by the Commercial Tax Officer. The Addl. Commissioner for Commercial Tax initiated suo motu revisional proceedings under section 22a ( 1) of the Act and he found that the explanation offered by the appellant did not stand to reason as he found that the vehicle in question with the goods was moving towards Doddaballapur cross via Gangamma Circle and it was checked at Yelahanka near Venkateshwar Distilleries; As per the version of the driver the goods were to be delivered at Rajkumar Resorts for which there was no prescribed document such as Form 39 or a bill or any other documentary evidence; the invoice produced by the driver of M/s Boltan Cable Industries in favour of Oriental Electricals Madras with a specific instruction to delivery the goods at dealers premises at Aga Abbas All Road, Bangalore and the goods were found elsewhere and as per the weightment slip, weight of goods was found to be 8765 kgs; whereas as per the weight mentioned in the L. R. receipt it was 9185 kgs. Thus, there was a difference of 420 kgs. He further recorded a finding that the appellant was blowing hot and cold and had given different versions at different times. He also found that the Accounts Manager of the appellant company had also agreed to pay the penalty. In view of this the revisional Authority disbelieved the version of appellant and has reversed the findings of the appellate authority and restored that of the Commercial Tax Officer. Aggrieved by the said order, the appellants have preferred this appeal.