1994 (6) TMI 196

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....m Corporation. There was a search of his premises on January 6, 1988 by the Intelligence Officer, Agricultural Income-tax and Sales Tax, Thalasserry and his team. Physical verification of the stock disclosed substantial differences of the items mentioned in exhibit P1 order. A pocket note book was also recovered from the business place of the petitioner, which revealed unaccounted transactions of 4,216 litres of petrol and 22,269 litres of diesel. The petitioner thus failed to maintain true and complete accounts regarding the business transactions for the year 1987-88, which is an offence falling under section 45A(1)(b) of the Act. After issuing show cause notice and hearing, the order exhibit P1 was passed imposing a penalty of Rs. 50,000.....

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....t find any reason to quash the impugned orders. 4.. If so, the conclusion is inevitable that the petitioner has not maintained true and complete accounts of his business transactions. The question then is what is the quantum of penalty that could be imposed on him. The petitioner seriously contended that he did not evade payment of any tax payable under the Act and, therefore, the question of imposing penalty does not arise. It was suggested that even if penalty is imposable, the maximum penalty that could be imposed is Rs. 5,000 and not twice the amount of tax due from him. On hearing counsel for the petitioner, I am satisfied that this submission of the petitioner is on firm ground and that the imposition of penalty related to twice th....

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....t at evasion of payment of tax and the penalty has been related to that amount. Since the petitioner did not have any liability during the year for payment of tax on any petroleum products as he was not an oil company, the penalty could not be imposed under the first part of section 45A(1). It could be only on the second part of section 45A(1), the liability under which is only a maximum of Rs. 5,000. 5.. The materials gathered at the time of inspection would reveal that the petitioner has not kept true and complete accounts. Even the stock verification made at the time of inspection disclosed considerable discrepancies. The petitioner has thus failed to keep true and complete accounts and thereby committed an offence falling under claus....