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2017 Supreme(Online)(KER) 10625
HIGH COURT OF KERALA
K VINOD CHANDRAN, J
V P MUHAMMED RAFI – Appellant
Versus
COMMERCIAL TAX OFFICER – Respondent
WRIT PETITION (CIVIL) 7328/2017
Penalties imposed for tax violations are justified in the absence of compliance, but courts may exercise discretion to modify penalties based on circumstances.
Headnote:
Penalty - Assessment - Taxation Act Section List - The court analyzed the penalty imposed for failure to file returns and lack of sales, ultimately modifying the penalty to 20% of the demanded amounts while upholding the essence of the penalty framework.
Fact of the Case:
The petitioner faced penalties for non-filing of returns for the years 2015-16 and 2016-17, despite having disclosed purchases. The appellate authority required payment of 30% of the penalty amount, which the petitioner contested due to business disruptions.
Issues: Whether the penalties imposed for the years 2015-16 and 2016-17 for non-filing of returns and absence of sales were justified, and if the appellate authority's directive was reasonable.
Ratio Decidendi: The court determined that while penalties were warranted due to non-compliance, the amount should reflect the petitioner's difficulties, leading to a reduction to 20% of the originally mandated penalties.
Final Decision: The writ petition was disposed of with a modification reducing the penalty payment to 20%.
J U D G M E N T
The petitioner is concerned with Ext.P9 order passed by the first appellate authority, wherein, the petitioner was directed to pay 30% of the disputed amounts of penalty for the year 2015-16 and 2016-17. For the year 2015-16, it is seen that purchases of Rs.6,63,402/- was disclosed and for the year
2016-17, the purchases disclosed is of Rs.11,250/-
2. Based on the fact that petitioner had not filed returns, the Assessing Officer had issued notice for penalty and had imposed penalty of Rs.16,58,506/- for the year 2015- 16 and Rs.28,126/- for the year 2016-17. The purchases were revealed from the details uploaded by the suppliers of the petitioner. The petitioner's contention through out was that W.P.(C)No.7328/2017 the petitioner was evicted from the venue of the business and even the new premises was not one conducive to carry on the catering business. The Appellate Authority had also carried out an inspection through the Assessing Authority and it was revealed that there was no stock existing at the time of inspection.
3. What is pertinent is that there were purchases by the petitioner during the assessment years and there was no sale reported. The petitioner being caterers, the purchases made are not goods having durability and in such circumstance, the petitioner would have definitely conducted sale in the very same year itself. In such circumstance, this Court is not inclined to interfere with Ext.P9 order, however considering the difficulty pointed out by the learned Counsel for the petitioner, the order at Ext.P9 would be modified to the extent of directing remittance of 20% of the demanded W.P.(C)No.7328/2017 amounts of penalty for the year 2015-16 and 2016-17, which shall be satisfied, within a period of one month from today.
The writ petition would stand disposed of, modifying the impugned order, to the above extent.
