P.K. THOMAS Vs. INTELLIGENCE OFFICER

JUDGEMENT

(1.) WP (C) No. 10532/06 has been filed seeking to quash Ext.P5 to the extent gurgan has been included at item No.91(1)(i) and to quash Ext.P6, the order passed under Section 47(6) of the KVAT Act levying penalty on the petitioner.

(2.) BRIEFLY stated, the case of the petitioner is that he is engaged in the manufacture and sale of veneers. For manufacturing purpose, petitioner imports soft wood from different countries including Myanmar. In so far as this case is concerned, Ext.P1 is the commercial invoice by which the petitioner purchased Gurjan logs from Myanmar. The logs were delivered at the Port of Tuticorin for onward transmission to the petitioner's place of business at Perumbavoor. Ext.P2 is the delivery note in Form No.15 of the KVAT Rules. En route, at the Meenakshipuram check post, the goods were detained demanding payment of Rs.53,750.00 as entry tax, which was paid. Thereafter, Ext.P3 notice under Section 47(2) was issued demanding security deposit on the ground that the timber in question is a hard wood and therefore is liable to pay tax @12.5% instead of 4%. This proceedings finally culminated in Ext.P6 order under Section 47(6) by which rejecting the contentions of the petitioner that his liability is only to pay tax @4% payable for soft wood, it was held that, tax payable is @ 12.5%. On that basis, penalty of Rs.1,07,500.00 was levied on the petitioner. In this order, reliance has been placed on Ext.P5, a notification issued by the Commissioner for Commercial Taxes in exercise of his powers under Section 6(1)(d) of the KVAT Act notifying the list of goods taxable @12.5%. In that notification, as item No.91(1)(i), gurgan/gurjan also has been included. Since penalty has been levied on the petitioner in view of Ext.P5 notification, petitioner is seeking to challenge Ext.P5 also. This is the background in which WP(C) No. 10532/06 has been filed.

(3.) THE contention raised by the learned counsel for the petitioners is that SRO 82/06 on the basis of which the circular referred to above has been issued is illegal and without jurisdiction. Therefore, according to him, the levy of penalty as per Ext.P6 in WP(C) No. 10532/06 and the completion of assessment as per Ext.P2 in WP(C) No. 18081/08 is illegal.