TaxTMI 
TaxTMI 
2021 (12) TMI 524
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.... following tabular statement: S.T.Revisions under KGST Act Sl. No. Assessment Year & Date of Assessment Order Order of Deputy Commissioner (Appeals) Kerala Value Added Tax Appellate Tribunal S.T.Rev.No 1. 2000-01; 10.03.2014 AIT/ST/KVAT/LT Appeal No.STA 74/14; 15.10.2014 T.A No.35/2015; 31.07.2015 13/2016 2. 2001-02; 10.03.2014 AIT/ST/KVAT/LT Appeal No.STA 75/14; 15.10.2014 T.A No.36/2015; 31.07.2015 15/2016 3 2002-03; 10.03.2014 AIT/ST/KVAT/LT Appeal No.STA 76/14; 15.10.2014 T.A No.37/2015; 31.07.2015 12/2016 4. 2003-04; 10.03.2014 AIT/ST/KVAT/LT Appeal No.STA 77/14; 15.10.2014 T.A No.38/2015; 31.07.2015 14/2016 5. 2004-05; 10.03.2014 AIT/ST/KVAT/LT Appeal No.STA 78/14; 15.10.2014 T.A No.39/2015; 31.07.2015 16/2016 O.T. Appeals under KVAT Act. Sl. No. Assessment Year & Date of penalty Order Order of Deputy Commissioner of Commercial Taxes Order of the State Goods & Service Taxes O.T.Appeal No. 1. 2005-06; 10.03.2014 KVAT Revition No.1/2014; 19.08.2014 R1-26320/14 to 26322(A)/14/CT ; 02.11.2017 13/2017 2. 2006-07; 10.03.2014 KVAT Revition No.2/2014;....
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....ss for verifying the books of accounts in the presence of him and verification done at his presence. Verification of books of accounts, recoveries along with the monthly returns in Form No.9 revealed stunning case of Max fraud done by the dealer. xx x xxx xxx From the above it is evident that the books of accounts recovered from the house of Sri. K. Ravindranare the parallel set of accounts maintained by the dealer and kept for safe custody at the residence of Sri, K. Ravindran. Sri Ravindran also admits this in his sworn statement dtd 13-09-2010 in which he stated that before seven months back Smt. T.M. Usha and her husband came to his house in company vehicle and directed him to keep the books of accounts related to Rekha Pharmaceuticals for the years 2000-2001 to 2008-2009 for safe custody. Hence it is evident that the dealer is maintaining parallel set of accounts for the year 2000-2001 out of the regular books of accounts. The suppressed sales turnover as per the recovery is over and above the sales turnover returned before the Commercial Tax Officer, Alathur for the year 2000-2001." 4. The dealer through Annexure-B dated 19.03.2012, contested the penal....
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....examine the persons and the records relied by your good self for making allegations. In the circumstances we may state that the notice issued by your good self is not sustainable in the eye of law since it is issued without cross examining the persons and the records relied by your good self. xxx xxx xxx From this it very clear that this is a story fabricated to put me in some unpleasant situation. In this circumstance it is just and proper to issue copies of the entire recoveries from the house of Sri. K. Raveendran along with copies of the following documents and records for furnishing detailed objection in the matter." 5. The dealer through Annexure-C dated 28.11.2012, before the Intelligence Officer, further objected to the continuation of the penalty proceedings either on the statement given by Ravindran or the books said to have been seized from the house of Ravindran, by treating the seized books as shadow books maintained by the dealer. "The Intelligence Officer is proceeding against me on the basis of the statement given by Sri. K. Raveendran and one Sri. Krishnakumar. If so I may be given an opportunity to cross examine the said Raveendran and Kris....
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....the reasons stated above, by virtue of the authority conferred upon me U/s 45A (1) of the KGST Act 1963. I hereby impose an amount of Rs. 14.99,967/- (Rupees Fourteen Lakh Ninety Nine Thousand Nine Hundred and Sixty Seven Only) as penalty being double the amount of tax evaded for the year 2000-01 to Smt. T.M. Usha, Propritrix Rekha Pharmaceuticals, Pudukkode, Palakkad. Oct 29, 2021, 12:49 The Penalty shall be paid as per the demand notice attached herewith." 7. The dealer being aggrieved by Annexure-D penalty order filed appeal before the Deputy Commissioner (Appeals), Commercial Taxes, Ernakulam. The Appellate Authority through order in Annexure-E dated 15.10.2014, accepted the argument of the dealer that the levy or imposition of penalty by the Revenue particularly by referring either to the statement and/or of books seized from the residence of K.Ravindran is illegal, unsustainable and these circumstances do not attract to the ingredients warranting imposition of penalty. The dealer admittedly has requested the Primary Authority for affording an opportunity to cross-examine Ravindran before any reliance either on the statement or books recovered from his house is mad....
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....or cross-examination and denial thereon, from all together a different perspective away from minimum requirement of fair play. He refers to and relies on the operative portion of the judgment of this Court in Edakalathur Traders Vs. State of Kerala and another (2004)12 KTR 90 (Ker) which reads as under: "O.P No.28293/1999 has been filed to quash the two penalty orders. The main grievance of the petitioner is that though it had submitted replies by against the show cause notices seeking for opportunity to cross-examine certain persons and also for furnishing certain documents, the assessing authority passed the penalty orders without affording any such opportunity. The assessing authority had committed the same mistake in this proceeding also. The petitioner has not been afforded a reasonable opportunity to show cause against the penalty proceedings. The impugned penalty orders are set aside with liberty to the respondents to proceed after giving replies to replies against the show cause notices." He prays for setting aside the order of the Tribunal. 10. Mr. Muhammed Raffiq, learned Special Government Pleader (Taxes) contends that the dealer, as a matter of right, is ....
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....se and it was observed that the decision was substantially correct and in consonance with the language of section 17(3) and the proviso thereto (underlining ours). At page 492, the learned Judge observed: "Thus on a true interpretation of section 17(3), the proviso thereto and rule 15, the inescapable conclusion would be that the assessee has been given a statutory right to prove the correctness of his return by showing that the materials on the basis of which his return is found to be incorrect or incomplete are wrong and if for this purpose the assessee makes an express prayer for cross-examining the wholesale dealers whose accounts formed the sheet-anchor of the notice issued to the assessee, he is undoubtedly entitled to cross-examine such wholesale dealers." 22. We do not, with respect, understand the decision of the Supreme Court, as recognising a right of crossST. examination as an invariable attribute of the requirement of reasonable opportunity under section 17(3) of the Act. We rather understand the rule to have been stated with sufficient elasticity and amplitude as to make the right depend on the terms of the statute, the nature of the proceeding or of....
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....nd in the circumstances of these cases, whether the right of the dealer to cross-examine K.Ravindran is tenable or not. To appreciate the above point, we refer to the circumstances borne out in Annexure A notice dated 12.03.2012. The Revenue has categorized the recoveries of books under the 3 categories: 1) from Mrs.Rekha Pharmaceuticals, Palakkad, 2) from the residence of the proprietrix of the registered dealer, 3) from Mr.K.Ravindran from Palakkad, an employee of the dealer. The analysis in the show-cause notice refers to the books of account recovered from the house of Ravindran. Variation between the figures shown in the returns filed by the dealer and the details noticed from the books of accounts recovered from the house of Ravindran constituted the basis for penalty proceedings. The reply of the dealer is excerpted above and on material facts and accusations made against the dealer, the dealer has not only denied the veracity of the statement and books of account relied on by the Revenue but requested an opportunity of cross-examination if the Revenue desires to proceed on the statement of Ravindran or the books of account recovered from the house of Ravindran. The order da....
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....xamination or establishment of material against the dealer with some semblance of reasonableness. 13. We take note of the above argument, and by looking at the order of the penalty, we are persuaded to hold that the Intelligence officer would have done better from the perspective of law and procedure; fairness in action was followed while accepting the material on which penalty proceedings are initiated. Explained further in the case on hand, in the beginning and ending of penalty, is with reference to Mr.K. Ravindran. It cannot completely be said that the Intelligence officer is relying on the books of account alone. It is again a matter of choice and selection, as the context compelled the Intelligence Officer to choose. The penalty is a matter of serious consequence and visits further reopening of assessment etc of the Assessee, for the years for which assessments have been are already complete. The statement or the material, if relied on for any limited purpose in the circumstances of this case, we are of the view that the same is after affording the dealer an opportunity of the cross-examination of Mr.K.Ravindran or we hasten to add the revenue has liberty to use the materi....