Antony Dominic :-

The prayer in this writ petition is to quash exhibit P13 order levying penalty on the petitioner under section 45A of the Kerala General Sales Tax Act, 1963 as confirmed by exhibits P14 and P15 orders.

Facts of the case are that the petitioner is a company incorporated under the Companies Act, 1956 and is a registered dealer under the provisions of the Kerala General Sales Tax Act, 1963 (hereinafter referred to as, "the Act" for short), dealing in petroleum products including high speed diesel. In so far as this writ petition is concerned, it is relevant to note that by exhibit P1, S.R.O. 1091/1999, issued under section 10 of the Act, the Government of Kerala, ordered to;

"I. Make a reduction in the rate of tax payable under the said Act, -

(1) on the turnover of sale or purchase, as the case may be, of goods specified in column (2) of Schedule I from the rate specified in column (3) to the rate specified in column (4) thereof, against each;

(2) by persons specified in column (2) of Schedule II on the turnover of goods specified in column (3) to the rate specified in column (4) subject to the conditions specified in column (5) against each;

(3) on the turnover of sale to the persons or organisations mentioned in column (2) of Schedule III of goods specified in column (3) thereof to the rate mentioned in column (4) on the seller producing a certificate in duplicate in the form in the annexure I obtained from the purchaser; ..."

Schedule III, to the extent it is relevant, is extracted below for reference :

"Schedule III -

Persons or organisations, the rate of tax on the sale of goods to whom is reduced under sub-clause (3) of clause I :

Sl. No. Description of person/organisation Description of goods Reduced rate of tax (per cent)

(1) (2) (3) (4)

1. Administrator, Union Territory of Lakshadweep, Laccadive Cooperative Marketing Federation, Kozhikode and the Lakshadweep Harbour Works and any dealer recognised by he Administrator, Union Territory of Lakshadweep subject to the condition that such dealer shall utilise the concessions only for such goods intended for the use in the Union Territory of Lakshadwe p Any goods, the rate of tax in respect of which exceeds 4 per cent. 4"

Format of the certificate at annexure I to the notification reads as under :

"Annexure I

Certificate

[To be issued by the purchaser vide sub-clause (2) and sub-clause (3) of clause I (in duplicate)]

1. I/We have purchased the goods described hereinbelow from Shri/Messrs. .........................................

(here enter the name and complete address of the seller).

He/They/is/are not registered dealers

His/Their Registration Certificate Number is

2. The said goods are intended for -

(i) Use in the Union Territory of Lakshadweep.

(ii) For the use of the ......... (here enter the name of the Government Department or Organisation).

(iii) Use in the manufacture of ......... (here enter the name of goods).

3. I/We undertake to pay over to the Government the amount of tax concession I/We received if I/We fail to make use of the said goods for the manufacture of ......... (here enter the name of goods intended to be manufactured), within the State.

4. I/We are Registered dealer on the rolls of the Sales Tax Office ....../my/our registration certificate No. is .........

5. I/We claim the reduction in rate of tax under item .............. of Schedule ......... to Notification S.R.O. No. 1091/99.

Description of goods

Sl. No. Name of goods No. and date of the sale bill/invoice/voucher Quantity Value

(1) (2) (3) (4) (5)

Place : Signature

Date : (1) Name of the person authorised to sign :

(2) Name and address of the purchaser :"

In the writ petition, it is averred that the petitioner appointed M/s. Nizy Enterprises, Feroke, Calicut as its Business Development Associate ("BDA", for short) to procure business from the Union Territory of Lakshadweep for commission