POLYMER DESIGNS & MOULDINGS Vs. STATE OF KERALA

JUDGEMENT

(1.) This O.T. Revision has been filed challenging an order passed by the Tribunal by which, the Tribunal while setting aside the order passed by the appellate authority had upheld the imposition of penalty under Section 47(6) of the Kerala Value Added Tax Act.

(2.) The learned counsel for the revision petitioner submits that the only reason for imposing penalty by the Enquiring Authority is for not providing Form 8FA during transit. The Enquiring Authority having conducted an enquiry in terms of Section 47(6) of the KVAT Act had imposed penalty double the amount of tax, on the allegation that there is an attempt to evade tax. However, the 1 st Appellate Authority found that there is no malafides on the part of the petitioner and consequently, there is no attempt to evade tax. Accordingly the order passed by the Assessing Authority was therefore set aside, which was interfered by the Tribunal without any valid reason. The main contention urged by the learned counsel for the revision petitioner is that, a mistake or omission on the part of the assessee cannot be a reason for imposing a penalty, unless it is found that there is a clear attempt to evade tax. This is a case in which the goods were imported under a bill of entry and the advance payments were effected by bank transactions. Clearing the goods from the Port had been entrusted to clearing agents. On account of a bonafide omission, while transporting the goods to the business premises of the petitioner the declaration which is required as per Form 8FA was not prepared and available with the transporter. The purpose of conducting enquiry is to find out whether there was any malafides in not doing so and to consider whether the assessee intended to evade tax. When the entire transaction is borne out by the details available in the bill of entry, it cannot be stated that there was any malafide intention and that apart, when the transaction is evident from the bank statements of the petitioner, it is clear that a transparent approach has been taken by the assessee in the matter and a mere omission on the part of the petitioner in transporting goods without the declaration under Form 8FA was not sufficient enough to impose such a huge penalty.

(3.) On the other hand, the learned Government Pleader submitted that the assessing authority had come to a clear finding that, when the only document required at the time of transportation as far as the KVAT Act is concerned is the declaration in Form 8FA, absence of maintaining the same during transit itself amounts to an attempt to evade tax.