TaxTMI 
TaxTMI 
TaxTMI 
2002 (10) TMI 759
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....the afore-mentioned raw materials locally on payment of 4 per cent tax subject certain conditions. The appellant was given a declaration under form No. 18 of the Kerala General Sales Tax Rules, 1963 and it has to sell the products manufactured using the said raw materials, so as to attract sales tax under the KGST Act or the CST Act. In other words, the products manufactured using raw materials purchased paying 4 per cent tax on the strength of form No. 18 declaration shall not be transferred on consignment or branch transfer basis outside the State. Such transfer not being a sale will not be exigible to tax. The appellant-company has several branches outside the State and therefore, was transferring finished products to those branches according to the market trend without paying sales tax. The company chose to give declarations under form No. 18 and purchased raw materials paying only 4 per cent tax between December, 1982 and March, 1983. During the relevant accounting year, the appellant effected the following transactions: Sales within Kerala: Rs. 123.33 lakhs Inter-State sale: Rs. 247.97 lakhs Transfer to branches outside Kerala: Rs. 1,697.89 lakhs. 3.. From the above figures....
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....ct from the part of the appellant exposing it to the penalty under section 45A. Therefore, it is submitted, in any view of the matter, the imposition of the maximum penalty under the said section is arbitrary and unjust. Therefore, it is submitted, even assuming the appellant was liable to tax, the imposition of penalty was unwarranted on the facts of the case. 5.. Learned Government Pleader, on the other hand, would point out that the appellant is a corporate giant. It knew very well that substantial part of the produced goods was being transferred to other States on branch transfer basis and, therefore, it could not honour the declaration under form No. 18. So, knowing fully well that it cannot stick to the conditions in the declaration, the company gave the declaration and evaded paying tax to the selling dealer which resulted in payment of tax by the seller to the Government at a lower rate. 6.. The learned single Judge has dealt with elaborately all the contentions urged on behalf of the appellant and dismissed the original petition. The point to be decided is whether the learned single Judge went wrong in doing so. It is true that a purchasing dealer is not liable to pay an....
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....sed on him under section 45A(1)(f). The appellant will definitely be covered by the said provision. Further, the case on hand will be covered by section 45A(1)(g) also. By giving a wrong declaration in form No. 18 or by acting in violation of the said declaration, the appellant has infringed the provisions of the Act and Rules. For this reason also, it is liable to penalty. The learned counsel's contention that since the appellant was not liable to pay any tax to the Government, it could not be accused of tax evasion, is plainly untenable. The word "evasion" is nowhere defined in the Act. So, we must go by the dictionary meaning. "Evasion" means the act or process of finding a way of not doing something that is legally or morally required to be done. Going by this meaning of the word "evasion", the appellant has definitely evaded paying tax. Section 45A does not say that the evasion by a person responsible to the Government for payment of tax alone will be culpable under the provision. There is nothing in the said section excluding the evasion by a person like the appellant. It is said, the language is an imperfect medium to convey one's thoughts. But, the language employed by the ....
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.... The taxing event is the sale to the purchasing dealer. If the purchaser misrepresents or subsequently misbehaves, the "legislative wrath" falls upon him as section 46(2)(d) of the Act provides for his imprisonment and for fine....'. In view of the above decision the first contention of the petitioner that purchasing dealer cannot be imposed with penalty even though lesser tax was paid only on the basis of his declaration, cannot be accepted merely because liability to pay tax to the Government is on the selling dealer." 8.. The next contention of the appellant is that even assuming there is evasion of tax, there is no mens rea and therefore, it is not liable to be subjected to penalty. It is trite law that the proceeding to impose penalty is quasi-criminal and the contumacious conduct of the person evading tax is necessary to impose penalty under the Act. In other words, the mere commission of the offence need not automatically be visited by a penalty. But, the Board of Revenue has dealt with this aspect in detail and the relevant portion of the order of the Board of Revenue has been quoted by the learned single Judge. We find that the competent authority has adverted to all th....