Back
IN THE HIGH COURT OF KERALA AT ERNAKULAM
S.V.BHATTI, BASANT BALAJI, JJ.
M/s.Joy Alukkas India (P) Ltd. - Appellant
Versus
State Of Kerala – Respondent
OT.Rev No. 81 of 2019
Decided on : 28-09-2022
Kerala Value Added Tax Act, 2003 - Section 46(3) ,46(3)(e), 47, 47(2), 47(6) - Kerala Value Added Tax Rules, 2005 - Rule 46 – Establishment of check post and documents to be carried with the goods - Refund of input tax in case of sale of goods in the course of interstate trade or commerce of transfer to outside the state otherwise than by way of sale in the course of interstate trade - Rule 66(6) – Establishment of check posts and documents to be carried with the goods – Payment and disbursement of amounts wrongly collected by dealer as tax - 46(3)(e) of the Act is a mandatory provision when goods are brought in to state through coastal cargo air and Railways and the petitioner cannot contend that since the goods were not intended for Kerala operation and were transported back the Kerala branch cannot account for the same and for the said reason form 8FA was not filed. (Para 13).
Findings of the Court :
The Section and Rules when mandate that documents should be in a particular form, non compliance of requirements will render such documents as not proper or genuine - When proper documents are not accompanied by goods, there is sufficient reason to believe that transportation is done with an intention to evade tax and officer is justified in invoking section 47 of Act - Tribunal had perused entire records produced by petitioner and found that there were defects in delivery notes in respect of name and full address of consignee - Invoices also did not contain consignee’s full address - Tribunal has intrinsically examined circumstances read with documents, which have bearing on issues in hand before recording and finding against petitioner herein - It is this finding which is reviewed in our jurisdiction. Further the Tribunal, being second fact-finding body, has entered into a finding that proper documents which are necessary for transportation of goods were not available at time of transport and hence, contention of petitioner that proper documents were accompanied by goods is factually incorrect - Tribunal also took note of fact that intelligence officer has noted in his order that no books of accounts were produced before him and also of fact that no declaration in form 8FA was produced along with reply though petitioner had a contention that in respect of goods brought to Kerala form 8FA was uploaded not at ime of interception but later. Intelligence Officer also verified declaration in KVAT Act and confirmed that same was not declared - As per section 46(3)(e) of Act, declaration should have been done on arrival of goods into state itself
Result: Revision dismissed
ORDER :
Basant Balaji, J.
The petitioner, a company registered under the Companies Act, is a trader in jewellery. The company, in the year 2013, purchased gold ornaments from various customers and transported to Kerala by an employee by Air. The gold was purchased by the branches of the petitioner at Haryana (Gurgaon) and new Delhi (Karol Bagh).
2. The Intelligence Squad No.III, Mattancherry on 29.11.2013, noticed transport of gold, scrap gold, and diamond ornaments without proper records as per Kerala Value Added Tax Act, 2003 (for short 'the Act'). The consignment originated from outside the state i.e., from Gurgaon and Karol Bagh was sent to 8 different centres, 2 in Kerala and the rest outside Kerala. The consignments addressed to the agency in Kerala and other states were not declared as mandated under the section 46(3)(e) of the Act read with Rule 66(6) of the Kerala Value Added Tax Rules, 2005. Moreover, the delivery notes were tampered with overwriting and the complete address of the consignee was not furnished. The goods were detained and later released on remittance of 25% of the security amount demanded.
3. Annex.L notice under section 47(2) of the Act was issued pointing out the reason for detention on 29.11.2013. The petitioner, to Annexure-L notice, filed detailed objection marked as Annex.M. Thereafter, enquiry was conducted by the intelligence officer and a penalty Rs.30,49,585/-was imposed under section 47(6) of the Act.
4. The petitioner, against the order of the Intelligence Officer dated 9.6.2014, filed appeal before the Deputy Commissioner (Appeals). The Deputy Commissioner, vide order dated 23.4.2015 in KVATA-2046/2014, allowed the appeal and the penalty was reduced to Rs.50,000/-and the balance was directed to be refunded to the petitioner.
5. The Revenue, thereafter, filed appeal before the Tribunal, as TA(Vat) No.220 of 2015. The Tribunal, on reviewing the facts and circumstances of the case, allowed the appeal filed by the State and the penalty order was restored, as per order dated 20.10.2018. The order of the appellate Tribunal is challenged in this revision by the petitioner on the following questions of law.
B. Whether on the facts and circumstances of the case the Tribunal having stated to have perused the records has considered at all the reply and the documents submitted by the petitioner and forming part of the record of the OR files.
C. Whether the order of the Tribunal has considered the contentions of the petitioner with reference to the documents and has not the Tribunal erred in not considering the reply and the documents forming part of the record that could establish that the movement of goods was supported by proper documents.
D. Whether the mere non filing of Form 8FA declaration itself is sufficient to hold and sustain a penalty under Section 47 and are not the authorities obliged to consider the entire transactions and the documentation available on record and on the movement of goods and the furnishing of further explanation and documents in the enquiry proceedings.
E. Whether the Tribunal and the authority has erred or not in imposing and sustaining a penalty under Section 47 in the facts and circumstance of the case.”
6. The counsel for petitioner, Shri A Kumar argues that the goods were transported to the domestic Tariff Area of Kerala State for purification and making new gold ornaments. The relevant documents which are essential for movement of goods from one State to another were accompanied with the goods by the carrier, which includes the delivery note, a self-declaration and stock issue voucher duly signed. The purpose of transport is mentioned in the voucher an
Section 46(3)(e) of the Act is incorporated to put a check on import of goods to the state without disclosing in the books of accounts and later to be used in the manufacture or sale within the state....
The tribunal's findings were upheld, confirming that the absence of proper documentation for goods in possession justified the imposition of penalties under the KVAT Act.
Minor deviations in transport routes without intent to evade tax do not warrant harsh penalties; authorities should impose general penalties for trivial lapses in compliance with the Goods and Servic....
Minor discrepancies in transport documentation do not warrant penalties under Section 129 of the Central Goods and Services Tax Act, with general penalties appropriately applied instead under Section....
The burden of proof lies with the petitioner to establish the genuineness of documents and actual movement of goods; failure to do so justifies seizure under the IGST/CGST Act.
The central legal point established in the judgment is that the failure to carry an e-way bill and discrepancies in the transportation route can infer an intention to evade tax, justifying the penalt....
Under Section 15 of the Act, the value of the supply of goods would be the transaction value and a transaction value would be the price that is paid or payable for the supply of goods.Q
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
