TaxTMI 
TaxTMI 
2005 (11) TMI 457
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....aim for concessional rate of tax, the assessee had filed photo copies of the certificates stated to have been issued from the Canteen Stores Department, in short, "CSD". Further the assessees also apprised the assessing authority that before making sales at concessional rate they had ascertained the procedures from the CSD and they were informed that CSD would be raising sales invoices in its name though registering the vehicles in the name of the defence personnel and that there is no provision in the sale letter to include the name of the canteen. Explanation given by the assessees was not satisfactory to the authorities. Hence the assessing authority issued notice under section 45A of the Kerala General Sales Tax Act, 1963 to show cause why penalty be not imposed for filing untrue and incorrect return so as to evade payment of tax. The assessees filed reply to the show cause notice which was not acceptable to the assessing authority. Later order dated June 24, 2004 was passed by the first respondent imposing a penalty of Rs. 3,54,385 under section 45A of the Kerala General Sales Tax Act. Similar order was also passed for the year 2003-04 demanding an amount of Rs. 11,16,810 bein....
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....ers, etc. Due to lack of sufficient space in the naval canteen the aforementioned items according to the counsel, are not directly kept by the canteen in its premises but all the same necessary arrangements are being made by the CSD for the sale of those items to defence personnel. Certificates issued by the CSD would show, according to the assessee, that the vehicles were sold to the defence personnel on their recommendation. Counsel submitted in effect sales were effected to CSD and therefore the assessees are entitled to get the benefit of SRO No. 1091/99. Counsel submitted that but for the certificates issued by the CSD the assessee would have collected the entire tax from the Defence personnel. Therefore, there is no question of violating the provision or filing incorrect returns and that the assessees were on the bona fide belief that they were entitled to the benefit of the abovementioned S.R.O. Referring to sections 19 and 20 of the Sale of Goods Act, 1930 counsel submitted that in effect the transfer was in favour of CSD though the certificate of sale, etc., under the Motor Vehicles Act and Rules, stood in the name of individual purchasers. Counsel placed reliance on th....
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.... the assessee had wilfully violated the entry and filed an incorrect return with an intention to evade payment of tax on the due date which is an offence punishable under section 45A of the Kerala General Sales Tax Act, 1963 and therefore learned single judge is not justified in interfering with the order imposing penalty. Before we examine the rival contentions, we may refer to the relevant provisions of Notification S.R.O. No. 1091/99. State Government have issued S.R.O. No. 1091/99 in exercise of the powers conferred under section 10(1) of the Kerala General Sales Tax Act, 1963, and hence it is a statutory notification. It is trite that exemption notification has to be interpreted strictly. Relevant entry of Schedule III reads as follows: Schedule III Persons or organisations, the rate of tax on the sale of goods to whom is reduced under sub-clause (3) of clause 1. Sl. No. Description of person/organization Description of goods Reduced rate of tax (per cent) 6. Military, Naval, Air force NCC canteens and Canteen Stores Department Any goods Half of the rate of the tax applicable to such goods. Column 2 of Schedule III specifically refers to descri....
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....o. 1091/99. We may also refer to the relevant provisions of the Motor Vehicles Act and Rules. As per rule 47(a) and (d) of the Motor Vehicles Rules, application for registration of a motor vehicle shall be accompanied with the sale certificate in form 21 which gives details of real purchase of the vehicles. Sale certificates would show that the sales have been effected not to CSD but in the name of individuals. No delivery of vehicle has been effected to CSD. Registration Certificates reveal that no sale has been effected in favour of CSD. In view of the above mentioned circumstances, we are in agreement with the Revenue that unless and until it is shown that the assessees have sold vehicles to CSD and certificate to that effect is produced they are not entitled to get the benefit of SRO No. 1091/99. Certificate produced from the Canteen Stores Department would not show that they have purchased any vehicle from the assessee. The argument that in fact vehicles were purchased by the Canteen Stores Department on behalf of the individuals is also far-fetched and if that be so it should be reflected in the records. Documents produced would not show that there was diversion or tran....