Penalty under local sale presumption applies where section 30B(4) adopts the assessment and recovery mechanism including penalty.

Penalty is leviable in proceedings under section 30B(4) of the Kerala General Sales Tax Act because that sub-section adopts the assessment and recovery mechanism in section 30B(3), and section 30B(3) expressly authorises penalty in addition to tax. Where the declared purchaser is bogus, non-existent, untraceable, or denies the purchase, the statutory presumption of local sale applies unless the consignor or connected person proves the truth of the declaration. On that construction, the penalty consequence carried by section 30B(3) extends to proceedings under section 30B(4), and the revisional authority was justified in restoring the penalty order.

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Issues: Whether penalty can be levied in proceedings under section 30B(4) of the Kerala General Sales Tax Act, 1963, and whether the revisional authority was justified in restoring the penalty.

Analysis: Section 30B(4) creates a presumption of local sale where the declared purchaser is bogus, non-existent, untraceable, or denies the purchase, and provides that the goods shall be liable to tax in the State unless the consignor or connected person proves the truth of the declaration. The liability to pay tax under sub-section (4) is to be assessed and recovered in the manner provided in sub-section (3). Sub-section (3), in turn, expressly authorises not only assessment and recovery of tax but also imposition of penalty up to twice the amount of tax. The structure of section 30B shows that sub-section (4) incorporates the penalty consequence contained in sub-section (3), and the penalty is also to be worked out in accordance with section 45A.

Conclusion: Penalty is leviable in proceedings under section 30B(4), and the Commissioner was right in restoring the penalty order.

Ratio Decidendi: Where a provision for assessment and recovery expressly adopts the mechanism of another sub-section that includes penalty, the incorporated penalty consequence applies to proceedings under the later sub-section as well.

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