Non-declaration of imported goods in VAT forms can sustain penalty even where customs filing and later tax payment are shown.

Non-declaration of imported goods in Form 8F(A) under the Kerala Value Added Tax Act created a presumption of suppression because the statutory import intimation was meant to alert the Commercial Taxes Department. A bill of entry before Customs did not satisfy that separate disclosure requirement, and later payment of tax on the manufactured finished goods did not cure the earlier default. In a multi-point VAT system, concealment of the imported component could support an inference of attempted tax evasion on the subsequent sale, so the assessee failed to disprove liability for penalty under the relevant penalty provision. The penalty was therefore sustained.

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Issues: Whether penalty was sustainable for non-declaration of imported goods in Form 8F(A) under the Kerala Value Added Tax Act, 2003, and whether production of the bill of entry and subsequent proof of tax payment on the final manufactured product negatived any attempt to evade tax.

Analysis: The declaration required on import into the State under Section 46(3)(e) was intended to ensure disclosure of imported goods to the Commercial Taxes Department. Non-filing of that declaration created a presumption of suppression, and the mere existence of a bill of entry before Customs did not amount to compliance with the statutory intimation requirement to the assessing authority. In a multi-point VAT regime, the imported component became part of the taxable value of the finished product, so concealment of the import could facilitate evasion on the subsequent sale. The later sale of the manufactured goods, even if tax was paid, did not erase the earlier default or discharge the assessee's burden to disprove an attempt to evade tax for the purpose of penalty under Section 47(3)(e), read with Section 47(6).

Conclusion: The penalty was rightly sustained and the revision was rejected.

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