CHAKKIATH BROTHERS Vs. ASSISTANT COMMISSIONER

JUDGEMENT

(1.) A question, the answer to which is debatable; with respect to classification, whether could attract penalty under Section 67 of the Kerala Value Added Tax Act, 2003 (KVAT Act) is the short question to be decided.

(2.) The brief facts for answering the above question are that the assessee sells a product which is known in the market as "Fryums". The assessee disclosed the turnover; however, claims exemption insofar as classifying the same to be "Papads". Entry 36 of the 1st schedule relating to 'Papad'; obviously grants exemption from tax. The debate is insofar as the Assessing Officer by Ext.P7, sought to treat it as "food products like pickles and corn flakes as included in Entry 49 of the 3rd schedule; exigible @ 4%. And the instant proceedings proceeded on the assumption that the product would be exigible at the rate of 12.5% as specified in SRO.82 of 2006 under Entry 103; residuary entry.

(3.) The learned senior counsel placed reliance on Cement Marketing Co. of India Ltd. v. Assistant Commissioner of Sales Tax, Indore and Others, 1980 1 SCC 71. The brief but forceful contention is that penalty under Section 67 of the KVAT Act cannot be maintained for reason of there being no contumacious conduct on the part of the assessee and for further reason that the penalty contemplated under Section 67 for attempted evasion of tax would definitely take in mens rea and cannot at all be said to be a civil obligation, which attracts penalty without anything more, other than tax delinquency as such.