IMPORTANT POINT
Penalties for false documentation under Section 7-A(2) of the AP GST Act are valid, and revisions under Section 22(1) cannot address factual disputes.

JUDGMENT :

RAVI NATH TILHARI, J.

1. Heard Sri K.P. Amarnath Reddy, learned counsel representing Sri Karthik Ramana Puttamreddy, learned counsel for the petitioner and Sri Shreyas Reddy, learned Government Pleader for Commercial Tax for the respondent.

Facts of the case:

2. This Tax Revision Case has been filed by M/s. Sri Balaji Industries under Section 22 (1) of the Andhra Pradesh General Sales Tax Act, 1957 (in short, the AP GST Act, 1957).

3. The petitioner has challenged the order of penalty, for the Assessment Year 1995-96 (AP GST) passed by the Commercial Tax Officer, Madanapelli which has been finally affirmed and maintained by the Sales Tax Appellate Tribunal (in short, the STAT), Andhra Pradesh, Hyderabad, T.A. No. 327 of 2002 vide order dated 09.04.2018, with the modification that the petitioner has been levied three times, penalty of the tax due, as first detection, instead of 5 times.

4. The petitioner is a registered dealer under the provisions of AP GST Act, 1957 and Central Sales Tax Act, 1956 (in short CST Act, 1956), respectively carrying on the business in manufacture and sale of polythene bags. During the assessment year 1995-96, the petitioner reported gross turnover of Rs.28,62,770/- through A2 returns. The Commercial Tax Officer, Madanapelli (in short, the Assessing Authority) issued notices for production of books for the purpose of assessment to which the petitioner did not respond. The business premises of the petitioner was inspected by the Regional Vigilance and Enforcement Officer (RVEO), Kurnool on 05.11.1996. During the course of such inspection, the purchase bills produced by the petitioner for the year 1995-96, towards the secondary transactions of polythene bags from M/s. Modi Plastic Industries, Hyderabad and M/s. Sundar Plastics, Hyderabad, disclosed certain bills for certain amount. On cross verification, with the Commercial Tax Officer (CTO) it was confirmed that M/s. Modi Plastic Industries, Hyderabad and M/s. Sundar Plastics, Hyderabad were not registered dealers on the rolls of the Commercial Tax Department and their registration numbers printed on the sale invoices related to different company i.e., M/s. Ramakrishna Tea Trading Company, Feelkhana, Hyderabad. It also came to light that sale invoices were not supported by waybills, vehicle numbers used for transporting the goods and mode of payment. The invoices issued by M/s. Sundar Plastics, Hyderabad were unsigned.

5. In the aforesaid circumstances, the CTO proposed to tax on the turnover of Rs.28,62,750/- by a pre-assessment show cause notice issued on 17.09.1997, sent through registered post, which was received by one Sri S.S. Babu, a partner of the petitioner’s firm on 23.09.1997. The petitioner sought time for 30 days by letter dated 27.09.1997. Inspite of the several invoices issued to him calling for production of books the petitioner did not respond. The Assessing Authority confirmed pre-assessment notice by order dated 02.12.1997 and levied a demand of Rs.2,76,090/-. Note was appended to the proceedings of Assessment dated 02.12.1997 that penalty under Section 7-A(2) of AP GST Act, 1957, will be initiated separately.

6. Learned counsel for the petitioner submitted that against order of assessment, the petitioner filed appeal which was allowed and the matter was remanded thereafter the CTO passed fresh order of Assessment and the petitioner complied with such order by paying the tax so assessed.

7. The order of penalty under Section 7-A(2) was passed, separately on 02.12.1997 by the Commercial Tax Officer imposing penalty of Rs.2,53,000/-. Before passing the said order, show cause notice was given to the petitioner dealer to which also response was not filed. The penalty levied was 5 times of the tax due, on such transactions. The penalty order of CTO dated 02.12.1997 was set aside in Appeal No. 170/97-98 (CTR) on 20.02.1998 by the Appellate Deputy Commissioner taking the view that, the penalty shall be leviable after completion of asses