GAYATHRI MOTORS Vs. STATE OF KERALA

JUDGEMENT

(1.) This revision petition is filed challenging the order of the Kerala Value Added Tax, Additional Appellate Tribunal, Palakkad in TA (VAT) 889/2013 through which the Appellate Tribunal reversed the finding of the first Appellate Authority that no penalty need be imposed on the revision petitioner. The Tribunal found that Annexure-A order of the Intelligence Officer, Squad No. III, Department of Commercial Taxes, Palakkad, was correct in law and required no interference at the hands of the first Appellate Authority.

(2.) The brief facts of the case are that the revision petitioner is an authorised distributor for Hero Honda Motor Cycles and an assessee under the provisions of the Kerala Value Added Tax Act, 2003 (for short KVAT Act). On 2.11.2007 a vehicle carrying 8 motor cycles was intercepted by the Intelligence Inspector, Squad No. III, Commercial Taxes, Palakkad. On inspection, it was noticed that the motor cycles were being transported under cover of delivery notes which were not accompanied by other documents, such as invoice, which are mandatory u/s.46 of the KVAT Act. It is the case of the petitioner that this was a genuine mistake at the hands of the driver of the vehicle carrying the motor cycles and that the motor cycles were sold to a dealer named M/s. Wheels Automobiles in Trichur. It is stated that the vehicle carrying the goods was intercepted very near to the business premises of the revision petitioner and immediately the necessary documents were brought and produced before the Intelligence Inspector. The Intelligence Inspector however, allowed the transport of the goods only on payment of security of Rs. 1,00,000/-. Thereafter, vide Annexure-A order a penalty of Rs. 1,00,000/- has been imposed u/s.47(6) of KVAT Act, after due enquiry. The first Appellate Authority by Annexure-B order set aside the penalty imposed holding that even if the necessary documents were not available at the time of inspection, the documents produced at the time of enquiry have to be taken into consideration before deciding whether to impose any penalty. The first Appellate Authority also relied on the judgment of this Court in M.C. Dowell and Co. Ltd. v. Sales Tax Officer (Enquiry), Kasaragod reported in (1993) KTR 447 (Ker) to reach its conclusion that no penalty was liable to be imposed. The Tribunal reversed the said finding of the first Appellate Authority, holding as under:

(3.) As noticed, the Tribunal therefore set aside the order of the 1 Appellate Autority and restored the order of the Intelligence Officer. The order of the Tribunal is now assailed before us.