D V DEO Vs. STATE OF KERALA

JUDGEMENT

(1.) The petitioner is a registered dealer under the Kerala General Sales Tax Act, 1963 (for short, the Act") and is engaged in the business of purchase and sale of essential oils at Cochin. In the course of his business he purchased four barrels of lemon-grass oil from M/s. K. V. Varghese, Tellicherry and consigned the same in lorry No. KLF-3487 on August 22 1987. The said transport was accompanied by a valid delivery note. The said lorry was intercepted by the Sales Tax Inspector at Changanacherry on August 23, 1987. The Sales Tax Officer issued a notice to the driver under S.29A of the Act. On furnishing a bank guarantee for Rs.16,500 being double the amount of the tax due on the value of the goods, the vehicle was released. A notice under S.29A of the Act was issued to the petitioner calling him to file objections, if any against the imposition of the penalty. In response to the notice, the petitioner himself appeared before the Sales Tax Officer and produced sale bill No. 141 dated August 22, 1987 for Rs.1,13,400 being the sale value of barrels of lemon grass oil. However, the Sales Tax Officer held that the goods were intended to be transported from Tellicherry to Cochin and checking of the vehicle was conducted at Changanacherry. Therefore, it is beyond doubt that the goods found at Changanacherry were not the same as supported by the delivery note. Accordingly he imposed a penalty of Rs. 16,560 under S.29A(4) of the Act. Against this order the petitioner preferred an appeal before the Appellate Assistant Commissioner, Kottayam. By order dated May 13, 1988 he confirmed the same. A second appeal before the Appellate Tribunal was also dismissed confirming the orders of the lower authorities.

(2.) Against these orders the following questions were raised for decision by this court:

(3.) S.29A(4) of the Act, enables the officer to impose on the owner of the goods a penalty not exceeding twice the amount of tax attempted to be evaded if he finds that there has been an attempt to evade the tax due under the Act. R.35A(4)(b) also says that there should be a finding by the officer there has been a attempt to evade payment of tax due under the Act on the transaction in pursuance of which the goods are transported. By a reading of these provisions it is abundantly clear that an opportunity should be given to the owner of the goods and there should be a finding that there has been an attempt to evade payment of tax due under the Act. On a reading of the orders passed by the authorities, we are unable to find any finding as contemplated under the Act. The Sales Tax Officer has proceeded to say that since the checking of the vehicle was conducted at Changanacherry it is beyond doubt that the goods were not supported by the delivery note. The Sales Tax Officer did not consider the explanation given by the driver in his statement dated August 24, 1987 as to how the vehicle was found at Changanacherry. The Appellate Assistant Commissioner as well as the Sales Appellate Tribunal have also committed the same error in not giving a clear finding on the alleged attempted evasion of tax.