C.N. RAMACHANDRAN NAIR,J.

1. The revision petitioner, engaged in the sale of Yamaha two wheelers at Thrissur, is a registered dealer under the Kerala value Added Tax Act, 2003 (for short ‘the KVAT Act’) During 2005 –2006 and 2006-2007, the petitioner conducted exchange melas wherein two wheeler owners were provided with facility to exchange their old vehicles with new ones. The petitioner arranged a broker for purchaser of old vehicles form the customers at the value fixed by the broker. If the value fixed by the broker is accepted by the customer, then he can purchase the new vehicle from the petitioner by remitting the balance sale price. The petitioner sold new vehicles at the original cost to the customer, but by collecting only the price of the new vehicle refused by the value of the customer’s old vehicle fixed buy the broker. The old vehicle is delivered by the customer then and there and the broker takes over possession of the same with the documents. According to the petitioner, the broker later sells the old vehicles delivered by the customers and remit the value earlier fixed to the petitioner with which the entire price of the new vehicles sold to the customers get paid. Even though old two wheelers were purchased from customers and resold later by the petitioner and the broker in tantum, neither the petitioner nor the broker conceded any purchase and sale of old vehicles. During the relevant years, tax on sale of old vehicle under S.6(1) of the KAVAT Act was 4%, which was later reduced on 0.5% of the sale value by introducing 10th Proviso to S.6(1) of the KVAT Act. In view of the non-payment of tax on the sale of old vehicles purchased under exchange mela, the Intelligence Officer proposed to levy penalty for evasion of tax under S.67(1) of the KVAT Act. Even though the petitioner contended that he has not purchased and sold the old vehicles, the Intelligence Officer overruled the objections and levied penalty. The first appeals having failed, the petitioner approached the Tribunal with second appeals and the Tribunal, though confirmed the penalty, reduced the quantum to equal amount of tax as against double the amount levied and sustained in the first appeal. It is against these orders of the Tribunal, these connected revisions are field.

2. We have learned counsel appearing for the petitioner and the Government Pleader appearing for the respondents.

3. The first question to be considered is whether the exchange mela involving taking of old vehicle from the customer and replacement of the same with a new one involves purchase of the old vehicle from the customer. It is the admitted position that on the customer bringing the old vehicle, it’s value is fixed by the broker and it is up to the customer to accept the value or reject the same. If the customer accepts the value offered by the broker, then he surrender the old vehicle along with papers and purchasers a new one from the petitioner by remitting the value of the new two wheeler, reduced by the value fixed for the old one by the broker arranged by the petitioner. Once this transaction or exchange is finalized, then the petitioners has no right to claim the balance sale consideration of the new vehicle sold to the customer irrespective of whether the value of the old vehicle fixed by the broker is realized by sale of the old vehicle surrendered by the customer or not. In other words, there is clear sale of the old vehicle by the customer by delivering the possession of the same along with its registration certificate and transfer documents in terms of the Motor Vehicles Rules. The consideration paid to him is by way of adjustment of the purchase value of the old vehicle, towards the sale price of the new vehicle. It is the conceded position that the petitioner treats the sale of the new vehicle under the exchanges scheme as full and complete with no debit balance of price in the customer’s account. Therefore, purchase of old vehicle from the custo