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Judgment
This appeal is by the Assessee being aggrieved by the order of the Revisional Authority restoring the penalty imposed on the Assessee.
The Assessee is a partnership firm engaged in trading of all kinds of flooring items. The goods were sought to be procured from Tamil Nadu in vehicle bearing No. KAO 1 C 4969. On 08.01.2008 at the Check Post, when the vehicle was stopped, the person-in-charge of the goods vehicle has tendered the invoice issued by M/s. Kumar Distributors, Chennai in favour of the Assessee. The documents were verified and it was noticed that the goods were coming from Navaseva, Mumbai to Bangalore whereas the tax invoices were raised from Chennai to Bangalore. The Respondent held that there are no documents for movement of goods from Navaseva to Bangalore. Accordingly, there is contravention of provisions of Section 53(2) of the KVAT Act, 2003 and levied penalty. Aggrieved by the same, the Assessee preferred an appeal before the Joint Commissioner of Commercial Taxes who allowed the appeal and set aside the penalty. Suo-moto revision was initiated by the Additional Commissioner of Commercial Taxes. A notice was issued and the Assessee was heard. By the impugned order, the double penalty as imposed by the Assessing Authority was reduced to the amount of tax leviable. Accordingly, the order under appeal was set aside and the penalty was modified. Hence the present appeal by the Assessee.
The Learned Counsel appearing for the Appellant contends that the impugned order is bad in law and liable to be set aside. He contends that there was no intention to avoid the tax due to the State. Hence, imposition of penalty is bad in law. He contends that it is for the State to show the loss of revenue to the State. Hence, revisional power could not be exercised. In support of his contention, he relies on the judgment in the case of M/s. Khemka Plywood, Bangalore v. Additional Commissioner of Commercial Taxes, Zona-II, Bangalore reported in 2001 (51) KLJ 26 to contend that while Check Post Authorities have not scrutinized the documents, the Assessee cannot be found fault with.
Sri. Shivayogiswamy, AGA defends the impugned order. He submits that the vehicle in question which has entered the State of Karnataka had invalid documents intended to avoid tax. Under these circumstances imposition of the minimal penalty is justified.
The citation relied upon by the Learned Counsel appearing for the Appellant has no application to the facts on hand. In the said case, the documents were produced before the Check Post Authorities. However, the Check Post Authorities did not consider the same. It was a case of non-scrutiny of the documents produced. In the instant case, the facts and circumstances are otherwise. It is not the case of the Appellant that he has tendered the documents and the authorities did not verify the same. On the other hand the documents submitted were improper intended to avoid tax.
In the instant case, the lorry receipt or consignment note indicates the movement of PVC flooring from Navasena, Mumbai to Bangalore. The invoice of M/s. Kumar Distributor, Chennai in favour of consignee at Bangalore indicated the transaction of sale as interstate in PVC flooring. Thus, the goods are under movement from Mumbai whereas invoice is issued by consignor at Chennai. There is no statutory document from Mumbai to Bangalore connected with the sale invoice of the consignor at Chennai. Movement of goods was from one direction whereas transaction of sale was effected from a different destination. Consequently, it was considered that the movement of goods was one without document and hence it was "no document case". The Assessing Authority imposed the double the rate of tax as penalty. In the suo moto revision, the penalty was reduced from double the rate of tax to the rate of tax leviable. On this ground also we do not find any reason to interfere with the reasoned order of the Revisional Authority. The tax levied is due to the violation of law and hence, the Revisional Authority has rightly passed the impugned order. The penalty imposed has been reduced in revision. A minimal penalty has been imposed. Due to contravention of law, penalty is attracted. Hence there is no good ground to interfere.
Hence, we do not find any error in the impugned order that calls for any interference. We do not find any merit in this appeal. Accordingly, appeal being devoid of merits, is dismissed.