ST MICHAELS OIL MILLS Vs. STATE OF KERALA

JUDGEMENT

(1.) The petitioner is an assessee to Sales Tax. We are concerned with the assessment year 1977-78. The business premises of the petitioner was inspected on 29-3-1978. Excess stock of 4130 Kgs. of copra was found. So also, an excess stock of 317 Kgs. of coconut oil was found. The total value of the unaccounted stock was fixed at Rs. 32,080/-. Proceedings under S.28(8) of the KIST Act were initiated. The first respondent levied a penalty of Rs. 16,040/- being 50 per cent of the value of the unaccounted stock. This is evidenced by Ext. P2 order dated 31-8-1978- In revision, the Deputy Commissioner of Agrl. Income Tax and Sales Tax fixed the value of the unaccounted stock at Rs. 28,910/- and on that basis limited the penalty to a sum of Rs. 14,455/-. In further revision, the Board of Revenue, by Ext. P5 order dated 1-4-1980, affirmed the decision of the Deputy Commissioner. At the same time, the Board of Revenue initiated suo motu proceedings and by a separate order dated 1-4-1980, passed under S.37 of the KGST Act. cancelled the order passed by the Deputy Commissioner dated 30-7-1979 and restored the penalty levied by the Intelligence Officer, evidenced by Ext. P2 dated 31-8-1978. In this Original Petition, the challenge is against Ext. P2 order passed by the Intelligence Officer. Ext. P3 order passed in revision by the Deputy Commissioner and Ext. P5 order passed by the Board of Revenue, refusing to interfere with Ext. P3. The order passed by the Board of Revenue in revision, dated 1-4-1980, setting aside the order of the Deputy Commissioner dated 30-7-1979 and restoring the order of the Intelligence Officer, evidenced by Ext. P2, is challenged in appeal, M.F.A. No. 318 of 1980.

(2.) We heard counsel for the petitioner in OP No. 2323 of 1980 and the appellant in MFA No. 318 of 1980, Mr. Jose Joseph, as also the learned Government Pleader, who appeared for the respondents. It was contended that there was no proper physical weighment of the stock at the time of inspection. The Deputy Commissioner, on a perusal of the records of inspection, held that the stock was physically weighed and recorded and Shri K. V. John, Managing Partner, was also present at the time of inspection. This finding of fact was affirmed in revision by the Board of Revenue. So, in proceedings under Art.226 of the Constitution, it is not open to the petitioner to contend that there was no physical verification of the stock of oil, which is necessary to arrive at the penalty leviable under S.28(8) of the Act. We repel the contention of the petitioner/appellant to the contrary.

(3.) Counsel for the petitioner/appellant vehemently contended that in passing Ext P2 order the Intelligence Officer did not apply his mind at all. It was argued that the total excess quantity of copra and oil were valued at Rs. 32,080/- and the first respondent mechanically levied the maximum penalty of Rs. 16,040/-. There was no application of the mind in levying the maximum penalty. The Board of Revenue by order dated 1-4-1980, has restored the said order, though the Deputy Commissioner interfered with Ext. P2 order in Ext. P3 proceedings. Since there is no application of the mind, Ext. P2 is illegal and infirm. The order of the Board of Revenue is also vitiated in restoring the said proceedings.