VELIMALI RUBBER COMPANY LIMITED Vs. INSPECTING ASSISTANT COMMISSIONER OF AGRICULTURAL INCOME TAX AND SALES TAX

JUDGEMENT

(1.) THIS is an original petition filed by an assessee under the Kerala Agricultural Income-tax Act, 1950 (hereinafter called the "Act"), to quash exhibit P-4 order dated March 9, 1988, passed under Section 17A(3) and to quash the order passed in revision exhibit P-6 confirming exhibit P-4 order.

(2.) THE short facts relevant for decision of this original petition are as follows : THE petitioner is a registered company and is an assessee under the Act. For the assessment year 1987-88, it had to file a return on or before June 1, 1987, as per Section 17(1) of the Act. On May 28, 1987, it had applied under Section 65 for extension of time for filing the return up to September 15, 1987. No communication was received for exhibit P-1 application filed under Section 65 and the assessee was under the impression that its request was granted. THEn, on August 22, 1987, a return was filed paying the admitted tax of Rs. 7,11,669 on the basis of self-assessment. THE petitioner was surprised when he received exhibit P-2 notice dated December 22, 1987, asking it to explain why penalty should not be levied under Section 17A(3) for the delay in payment of the tax and failure to file the return on June 1, 1987. Elaborate objections under exhibit P-3 were filed on December 25, 1987. Without a proper consideration of exhibit P-3 objections, and the correct legal position, exhibit P-4 order was passed levying a penalty of Rs. 42,700. This order was passed on January 9, 1987. Immediately exhibit P-3 revision was filed on March 22, 1987, before the Commissioner, Board of Revenue. THE Commissioner as per his order, exhibit P-6, rejected the revision and confirmed the order in exhibit P-4, Hence, this original petition is filed to quash exhibit P-4 and exhibit P-6 order confirming exhibit P-4.

(3.) THE crucial question that arises for consideration in this case is whether, in exercise of the powers under Section 17A(3), it is open to the Revenue to levy a penalty when the petitioner pays the admitted tax on the basis of self-assessment and produces proof of the same along with the return when the return is filed after the due date, namely, June 1, of the concerned year.