2014 (6) TMI 974

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....The brief facts for answering the above question are that the assessee sells a product which is known in the market as "Fryums". The assessee disclosed the turnover; however, claims exemption insofar as classifying the same to be "Papads". Entry 36 of the 1st schedule relating to 'Papad'; obviously grants exemption from tax. The debate is insofar as the Assessing Officer by Ext.P7, sought to treat it as "food products like pickles and corn flakes as included in Entry 49 of the 3rd schedule; exigible @ 4%. And the instant proceedings proceeded on the assumption that the product would be exigible at the rate of 12.5% as specified in SRO.82 of 2006 under Entry 103; residuary entry. 3. The learned senior counsel placed reliance on Ce....

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.... by the authority, conferred with such powers under the enactment. 6. An incidental look, into the facts, would reveal that the petitioner had, under the Kerala Value Added Tax Act, 2003, filed a return showing the turnover of its product; however claiming exemption as aforesaid. The Assessing Officer by Ext.P7, issued a notice under Section 25 seeking to classify the produce "Fryums" under item No.49 exigible to tax @ 4%. A detailed reply is said to have been filed in Ext.P8; on which admittedly no action has been taken till date. An assessment under the KVAT Act being one in the nature of self assessment, no order as such need be passed unless the Assessing Officer intends to meddle with the self-assessment made, on the basis of classi....

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.... fide belief that he is not liable so to include it, the return filed cannot be condemned as a 'false' one which finding alone would invite imposition of penalty. What then, is the scope of a penalty proceeding, is this Courts concern, herein. In that case the assessee deducted the freight charges from the price shown in the invoice since the invoice showed the 'free on rail destination railway station' price. The amount of freight paid to the assessee, according to them, was not exigible to sales tax and hence was not included in the taxable turn over, in the returns filed. Despite the finding that freight formed part of the sale price, on facts, it was held that "imposition of penalty is penal in character and unless the f....