MONSON JOB Vs. COMMISSIONER OF COMMERCIAL TAXES

JUDGEMENT

(1.) The petitioner is a works contractor. For the assessment year 2004-2005, the 3rd respondent initiated penalty proceedings under Section 45A of the Kerala General Sales Tax Act (hereinafter referred to as 'the KGST Act' for short) on the ground that there was a portion of the turnover that was not declared by the petitioner. By Ext. P1 order dated 29.07.2007, the 3rd respondent confirmed a penalty of Rs. 5,60,280/- on the petitioner. The said amount represented twice the amount of tax, that was determined by the 3rd respondent as being due on the turnover of Rs. 43,25,000/- that was not declared by the petitioner. Aggrieved by Ext. P1 order of the 3rd respondent, the petitioner filed a revision before the 2nd respondent which was dismissed by Ext. P3 order dated 18.01.2008. In a further revision filed before the 1st respondent, the 1st respondent, by Ext. P5 order dated 15.07.2009, reduced the penalty amount by confining it to the actual amount of tax involved. While quantifying the reduced penalty, as equal to the actual amount of tax involved, the 1st respondent took the figure of tax, assessed on the petitioner for the assessment year 2004-2005 by the 4th respondent assessing authority, in Ext. P2 order dated 16.02.2009. In other words, while reducing the penalty to the actual amount of tax involved, the 1st respondent adopted the figure of tax, as arrived at by the assessing authority and not the figure of tax that was arrived at by the 3rd respondent Intelligence Officer. It would appear that the petitioner preferred a rectification application before the 1st respondent for rectifying the said order to confine the penalty amount to only such portion of the tax as was attributable to the turnover that was found to be not declared in the proceedings before the 3rd respondent Intelligence Officer. According to the petitioner, the tax due on the said undeclared turnover would have come to only Rs. 11,110/- and therefore, this ought to have been the penalty imposed on him as a consequence of Ext. P5 order of the 1st respondent. By Ext. P8 order dated 30.03.2010, the contention of the petitioner, with regard to confining the penalty amount to the tax on the suppressed turnover, was rejected. Minor modifications were however, effected in respect of the rate of tax. Thereafter, when the petitioner did not pay the penalty amounts due in terms of Ext. P5 order, revenue recovery steps were initiated through Ext. P9 notice dated 19.12.2007. In the writ petition, Exts. P1, P3, P5 and P8 orders as also Ext. P9 notice are impugned.

(2.) A counter affidavit has been filed on behalf of the respondents wherein the stand taken is that the penalty proceedings against the petitioner were initiated pursuant to a finding that the petitioner had not disclosed a part of his turnover before the respondents. It is pointed out that the penalty that was confirmed by him by the 3rd respondent took into account the tax dues on the undeclared turnover, and twice the said amount of tax was imposed on him by way of penalty. It is contended that although, the 1st respondent in the second revision before him by the petitioner, reduced the penalty amount to the actual amount of tax that was sought to be evaded, the 1st respondent nevertheless adopted only that figure of tax that was arrived at by the assessing authority and imposed that amount as the penalty. It is pointed out that the tax amount as arrived at by the Intelligence Officer was based on the details available before him at that stage and the petitioner had only subsequently revised his return by declaring the said turnover before the assessing authority and that resulted in a finding of reduced tax liability before the assessing authority. It is contended that, since the assessment proceedings and penalty proceedings are independent, the figures of tax for the purposes of assessment could not be automatically adopted for the purposes of determining the penal liability of the petitioner.

(3.) I have heard Sri S. Santhosh Kumar, the learned counsel for the petitioner and also Smt. K.T. Lilly, the learned Government Pleader appearing on behalf of the respondents.