RAMA ROLLER FLOUR MILLS Vs. ASST COMMR

JUDGEMENT

(1.) Petitioner is questioning Ex.p6 order passed by the Member, Board of Revenue in a suo motu revision setting aside the lst revisional authority s order and confirming the order imposing penalty by the assessing authority. Facts are not disputed in this case as can be sen from the averments in the original petition and counter affidavit. Petitioner is engaged in the business of roller flour mills at Kanjikode Palakkad and it is a registered small scale industrial unit. Petitioner is manufacturing wheat products, such as atta, maida and sooji from wheat in its factory at Kanjikode. During the year 1992-93 petitioner filed tax returns claiming exemption for the entire turnover being sales turnover of wheat products. Petitioner, being the first seller of wheat product in the state, according to the sales tax authorities he has to pay tax at the rate of4%.The Karnataka High court in New Swastik Flour Mills & Another v. State of Karnataka & others((1992)84 STC 49) as well as the patna High court in Dhanbad Flour Mills v. State of Bihar & other((1989) 75 STC47) held that atta, maida and sooji are products made out of wheat though were different in form but wheat in substance and that tax is leviable only first stage by virtue of section 15 of the Central Sales Tax Act. It is also held that once tax is paid on the purchase of wheat locally, no tax was collected from the customers in nearby states of Karnataka and Tamilnadu, to face competition, petitioner claimed exemption . Therefore, petitioner claimed exemption in the returns filed from 1991 June onwards and was not paying the tax subsequently for the wheat products. Tax was also not collected from the customers, like their counter-parts in Karnataka and Madras, so that there was uniformity of price. Petitioner also got stay order from this court in O.P.NO.6500 of 1991. In the above writ petition, in an interim order this court directed the assessing authority not to collect sales of wheat and wheat products. Petitioner, even though disclosed the entire turnover, claimed exemption based on the decision of the Karnataka High Court in the returns for the years 1991-92 and 1992-93.

(2.) Supreme Court overruling the judgments of the high Court, referred above, in the decision reported in Rajasthan Roller Flour Mills Association and Another v. State of Rajasthan and others(91993 91 STC 4080 held that wheat and wheat products are different commodities and tax has to be paid separately. Therefore, for subsequent years petitioner has filled correct returns. The stay obtained by the petitioner was vacated in 1994. Petitioner paid the entire amount of tax due in installments. After payment of the entire amount, assessment was made by Exts.p7 and p8. Therefore Deputy Commissioner issued notice regarding imposition of penalty in view of the filing of the incorrect returns under section 45A of the Kerala General Sales Tax Act. Section 45A(1)(d) of the Act is as follows.

(3.) After issuing notice, by Ext.p1 order penalty was imposed for not filing correct return for the year 1991-1992. Operative portion of the order is quoted as follows. Wheat and wheat products are different commodities. The Hon ble Supreme court has clarified this position. Even after the supreme court decision, the dealer has filed incorrect return with intention to evade tax. Hence, there is no reason to deviate from the proposal. Hence, I impose a penalty 12,08,775/- (Rupees twelve lakhs eight thousand seven hundred and seventy five only) on the dealer viz.M/S.Sreeram Roller Flour Mill, Kanjikode u/s.45A of the KGST Act 1963 for the offence detailed above. The Tax due and penalty imposed will be paid as per demand notice attached . Similarly for 1992-93 Ext.p2 order was passed. Petitioner filed revision before the second respondent. Second respondent passed Ext.p3 common order. Since the entire facts are stated in the above order, I am quoting the above order as follows: