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of <h1>Court Cancels Tax Penalty on Hotel for Goods Transport: Compliance with Excise Laws Highlighted</h1> <h3>Hotel Leela Venture Ltd. Versus State of Kerala</h3> The court canceled the penalty imposed under section 29A(4) of the Kerala General Sales Tax Act, 1963, on a five-star hotel for alleged evasion of tax on ... - Issues: Sales tax penalty under section 29A(4) of the Kerala General Sales Tax Act, 1963 for evasion of tax due on goods under transport.Analysis:The judgment pertains to connected sales tax revision cases arising from penalty proceedings under section 29A(4) of the Kerala General Sales Tax Act, 1963. The case involves a five-star hotel running in Kovalam, where a consignment of foreign liquor was seized by the sales tax authorities. The goods were transported with a valid excise permit issued by the State excise authorities. The Department alleged that the quantity transported was more than permitted and that the goods were not transported by rail as claimed by the assessee.The court examined the provisions of section 29A(4) and emphasized that the penalty is for the attempt of tax evasion on goods under transport. It noted that the goods were covered by a valid excise permit and were seized from the railway station, indicating rail transport. The court highlighted the necessity of transit permits for road transport through other states, reinforcing the validity of rail transport in this case. The invoices showed concessional central sales tax rates, further supporting the inter-State purchase nature of the goods. The court also considered the payment of advance tax by the assessee, indicating compliance with tax obligations.The judgment underscored that penalty can only be imposed for evasion of tax, which was not the case here as the goods were purchased from outside the State and transported to the assessee's business premises. The court emphasized the need for coordination between excise and sales tax authorities for effective tax collection on such transactions. Consequently, the court canceled the penalty confirmed by the Tribunal, allowing the revision filed by the assessee and dismissing that of the Revenue. Any penalty collected was directed to be adjusted towards tax liability or refunded to the assessee, concluding the judgment.
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