AI Drafter 
TaxTMI 
TaxTMI 
2021 (3) TMI 1032
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....he appeal was admitted by a Bench of this Court vide order dated 01.02.2018, on the following substantial questions of law: a) "In the facts and circumstances of the case, whether the Tribunal is right in treating the levy of penalty under Section 53(12)(a)(i) of the KVAT Act as automatic for not reporting at the Checkpost in terms of Section 53(2) of the KVAT Act despite the Petitioner showing sufficient cause? b) In the facts and circumstances of the case, whether the Tribunal is right in conforming the levy of penalty under Section 53(12)(a)(i) of the KVAT Act on account of not reporting at the Checkpost, on the presumption that the Petitioner had attempted to transport the goods the State of Tamilnadu which was in fact....
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....fore the Karnataka-Tamilnadu border and the driver of the vehicle had to take the service road below the last flyover to reach the petitioner's godown. However, the driver, inadvertently, took the flyover instead of moving below the flyover and landed at the toll gate. It is the case of the petitioner that the driver paid the toll fee and proceeded further looking for a U-turn to return back to regular route. The driver proceeded on the second U-turn which was the last available U-turn just before the Karnataka-Tamilnadu border which is about 150 meters away from the exit toll. It is the further case of the petitioner that while the driver was approaching the second U-turn, the driver was not aware that he was to stop at the Karnatak....
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....of penalty in an appeal before the First Appellate Authority, which was dismissed by an order dated 27.05.2017. Thereupon, the petitioner approached the Tribunal. The Tribunal by an order dated 15.12.2017, has reduced the quantum of penalty to the amount of tax on the ground that the penalty is not automatic. In the aforesaid factual background, this petition has been filed. 4. Learned counsel for the petitioner submitted that the Commercial Tax Officer as well as the First Appellate Authority and the Revisional Authority ought to have appreciated that all the prescribed documents including details of stock transfer, e-sugam, etc., were being carried by the driver and the transaction in question, namely stock transfer from one branch to ....
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.... a penalty of Rs. 1,07,34,904=00 and further order to pay the penalty forthwith. On failure to pay the penalty levied, the goods under transit sufficient to cover the penalty levied, will be taken possession as security towards payment of penalty levied." 8. The aforesaid order has been affirmed in appeal. Similarly the Tribunal in para-36, relevant extract of which is reproduced below, has held as under: "36. xxx Taking into consideration these legal dictums with regard to the exercise of discretionary powers vested with the Check Post Officer and considering the facts and circumstances of the case before us we are of the opinion that it would be just and reasonable to levy penalty equivalent to the amount of tax payable....
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.... Checkpost Officer failed to appreciate the fact that immediately upon entry of the vehicle into the State of Tamilnadu after crossing the Karnataka State Border, the vehicle would be stopped at the Tamilnadu Entry Checkpost and the Checkpost Officer in the State of Tamilnadu would certainly insist for the documents prescribed under the Act as well as the verification seal on the documents by the Karnataka State Exit Checkpost and that the Petitioner cannot escape into the State of Tamilnadu without obtaining the verification seal on the documents from the Karnataka State Exit Checkpost. 10. The levy of penalty is not automatic, but is discretionary in nature. Therefore, the aforesaid aspect of the matter which have a material bea....