STATE OF KARNATAKA Vs. CENTURY AUTOMOBILES

JUDGEMENT

(1.) THE State has preferred this revision against the order passed by the Karnataka Appellate Tribunal in S.T.A. No. 69 of 2002, dated December 31, 2002 allowing the appeal and setting aside the levy of penalty under Section 28A(4) of the Karnataka Sales Tax Act, 1957 (for short, hereinafter referred to as "the Act").

(2.) THE facts leading to this dispute are as under: THE respondent is a registered dealer under the provisions of the Act dealing in Hero Honda Motor cycles. THE goods vehicle bearing No. KA 14/8117 was transporting ten Hero Honda Motor cycles belonging to the respondent on August 28, 2001 to Harihar. As the said goods vehicle did not stop at the sales tax check-post, Harihar, it was chased, intercepted and brought to the sales tax check-post. THE person-in-charge of the goods vehicle tendered a letter head issued by the respondent wherein it was stated that they are dispatching ten motor cycles to Nandi Motors, for demonstration. He did not produce the declaration in form 39 or any sale bill. THErefore, the authorities held that it violated the provisions of Section 28A(2) of the Act. THE check-post authority issued a show cause notice proposing a penalty of Rs. 1,54,058.40 for violation of Clause (b) of Sub-section (2) of Section 28A of the Act. THE person-in-charge of the goods vehicle filed a reply requesting the authorities to reduce the penalty. In the light of the request made for reduction of penalty, the authorities reduced the penalty to Rs. 1,02,706 equal to twice the rate of tax on the value of the goods which were being transported, by means of an order dated August 29, 2001. THE penalty was paid without protest and the vehicle was released.

(3.) PER contra, the learned Counsel for the respondent submitted that the material on record discloses that the vehicles were transported from Shimoga to Harihar for the purpose of demonstration and it was sent along with a letter showing the purpose for which it was transported, which constitutes "such other document" referred to in Clause (b) of Sub-section (2) of Section 28A. As a motor vehicle could not be sold without registration and valid documentation, there cannot be any tax evasion as the respondent being a registered dealer. Therefore, he submits that the Tribunal was fully justified in its finding and in setting aside the penalty imposed.