2012 (10) TMI 958 - HC - VAT and Sales Tax

Court modifies penalty & tax amounts in Kerala VAT Act challenge, directs reduced penalty & security provision.

Choice Constructions Versus State of Kerala and Others

The court modified the penalty and tax amounts in the case involving a challenge to a conditional order of stay under the Kerala Value Added Tax Act, ... - Issues involved: Challenge to conditional order of stay u/s Kerala Value Added Tax Act, 2003.Summary:Issue 1: Interpretation of tax liability on import transactionsThe appellant contested the order of penalty and assessment, arguing that the import of lifts should not be included in the tax return due to being covered by Article 286 of the Constitution of India as an import from outside India. The appellate authority directed the appellant to remit 1/3rd of the penalty and tax assessed. The learned single judge modified the penalty amount to &8377; 10 lakhs. The appellant challenged this modification, claiming no tax liability on imports from outside India.Issue 2: Modification of penalty and tax amountsThe appellant's counsel argued that the import being from outside India absolves them of tax liability. The Government Pleader suggested that post-import transactions might attract tax liability. The court modified the penalty amount to &8377; 6 lakhs in one appeal and directed the appellant to pay the same in the other appeal, with a provision for furnishing security for the balance amount.In conclusion, the court modified the penalty and tax amounts, considering the nature of the import transactions and the provisions of Article 286 of the Constitution of India, ensuring a fair resolution in the interest of justice.