Penalty under Kerala sales tax law attaches to false declarations, with discretion limited to the statutory ceiling.

Section 30B(4) of the Kerala General Sales Tax Act, 1963 was read with section 30B(3) to hold that the assessment and recovery mechanism also carries the liability to penalty where the declaration is false or the consignee is bogus, non-existent, untraceable, or denies the transaction. The incorporation of sub-section (3) into sub-section (4) was treated as importing both the procedure and the penalty consequence, reflecting legislative intent to place both situations on the same footing for assessment, demand, and penalty. The authority retained discretion only on quantum within the statutory ceiling, and the Tribunal's view sustaining penalty was upheld.

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Issues: Whether penalty could be levied under section 30B(4) of the Kerala General Sales Tax Act, 1963 by applying the assessment and recovery mechanism in section 30B(3), and whether the Tribunal was correct in sustaining such penalty.

Analysis: Section 30B(3) provides that where a presumption of local sale arises, the person concerned is liable to pay tax to be assessed and recovered in accordance with the Act together with penalty not exceeding twice the tax assessed. Section 30B(4) applies the same mode of assessment and recovery where the declaration is false or the consignee is bogus, non-existent, untraceable, or denies the transaction. The incorporation of sub-section (3) into sub-section (4) was held to import not merely the procedure but also the liability to penalty, because the legislative intent was to treat both categories alike for assessment, demand, and penalty. The authority was, however, left with discretion only as to the quantum of penalty within the statutory ceiling.

Conclusion: Penalty was held to be leviable under section 30B(4) read with section 30B(3), and the Tribunal's view was upheld. The revision was rejected, with the penalty confined to an amount equal to the tax levied.

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