M/S. GAJANANA AGENCIES Vs. INTELLIGENCE OFFICER

JUDGEMENT

(1.) APPEAL is filed by the petitioner against the judgment of the learned Single Judge refusing to set aside the penalty levied under Section 45A of the KGST Act. Learned Single Judge, however, reduced the interest payable under Section 23(3) on balance penalty to 50% on condition that the petitioner remits the balance penalty on or before 15.2.2008.

(2.) THE facts involved in the case would disclose that the Intelligence Squad No. II, Kasaragod had collected duplicate copy of the delivery note No.279219 dated 12.12.1996 used by the petitioner for the transport of 10,000 kgs. of raw rubber valuing Rs.4,30,000/ - to M/s.Kottacherry Trading Company, Panathur. Subsequently, the books of account of the petitioner for the assessment year 1996 -97 were called for and verified. On verification, it was found that the petitioner had effected purchase of raw rubber from places within a distance of 40 to 50 kms and it was transported to the business place of petitioner at Kottachery using delivery note in form No.26 in Mini lorries and heavy vehicles plying with National permit having capacity to have 6000 kgs. to 10,000 kgs. of raw rubber. On verification, the Intelligence Officer found that the quantity accounted as revealed from the books of account and available in the original copies of the delivery notes was 400 kgs. to 1,000 kgs of raw rubber. This anomaly lead the officer in suspecting tax evasion and, therefore, further verification was done with reference to the duplicate copy of the delivery notes. Petitioner produced the duplicate copy of the delivery note in respect of delivery note No.279219 dt.12.12.1996. The Intelligence Officer found certain discrepancies in the same.

(3.) LEARNED Single Judge found that it was very strange that the quantity recorded by the petitioner as transported in trucks with six tonnes to ten tonnes capacity is 400 kgs and 1000 kgs. It was also found that the petitioner is bound to maintain the delivery note for transport under Rule 32(18) read with sub - rule 21 of the KGST Rules. Having not produced the document, there is substantial evasion of tax and, therefore, there is no reason to interfere with the orders passed by the assessing officer and the appellate authority.