SHRI GOPALAKRISHNA SHETTY Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THIS Sales Tax Revision Petition is filed against the order passed by the Karnataka Appellate Tribunal in appeal No. 1219/2004 dated 21st day of October, 2004 by the petitioner, being aggrieved by the same.

(2.) A brief reference to the facts may be necessary to resolve the legal issues raised by the petitioner in this revision proceedings. They are: Petitioner is a transporter and owner of vehicle bearing registration No. KA -19 A -3435. On several occasions, in the month of May and June, 2002, he had transported superior kerosene oil and naptha from Mangalore Port or stock points at Mangalore to a place outside the State -Pondicherry/Chennai, consigned by companies like M/s PAS Petro Products, M/s Vivek Petro Chemicals Private Limited, who are registered dealers under the provisions of Karnataka Sales Tax Act, 1957 ('Act' for short), having their branch office at Mangalore and Head Office at Pondicherry/Chennai, etc., on stock transfer basis. According to the petitioner, the goods in question were imported by the consignors into the country from abroad and formed part of their stock at Mangalore after clearance from the Mangalore Port. To reach the consignors Head Office, the transport vehicle has to pass through the State of Karnataka. If the vehicle has to move from Mangalore, in the normal course, it has to pass through Check Post at Kannur, Mangalore, which is the entry or inward Check Post in Karnataka and either the Sales Tax Check Post at Hosur Road, Attibele or N. Vaddarahalli Check Post, Mulabagal Taluk, Kolar District, which are known as exit or outward Check Posts.

(3.) THE owner of vehicles/drivers have failed to surrender the transit passes at the Attibele Check Post within the stipulated date as prescribed under Section 28AA(2) of KST Act and 23(F) (13) of KST Rules. But, it is found that fictitious documents were created for having surrendered at the N. Vaddarahalli Check Post and sent to this Check Post. The goods transported in the transit passes were not transported to the place Pondicherry mentioned in the document but were unloaded in the Karnataka State and thereafter were sold unauthorisedly defrauding (evading) the taxes to be paid to the State has been proved and hence, the goods sold in the State has to be brought to assessment and assessed to tax for the goods involved in the transit passes as per Section 28AA(4) of KST Act, 1957.' 4. After receipt of the show cause notice, the owner of the goods vehicle had raised all possible objections to the proposal made in the show cause notice. The Check Post Officer after affording a reasonable opportunity of hearing to the owner of the vehicle and after considering several objections raised in the reply to the show cause notice had passed an order levying tax under Section 28AA(4) of the Act and penalty as provided under Section 28AA(5) of the Act for contravention of the provisions of Section 28AA(2) of the Act. The order passed by the Check Post Officer under Section 28AA(4) of the Act reads as under: