TaxTMI 
TaxTMI 
2026 (7) TMI 1123
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...."E-SUVEGA" in electronic medium, was duly obtained at the entry check post and duly surrendered at the exit check post by the driver or person in charge of the goods vehicle as required under section 54(1) of the Act ? B) Whether in a case where the person in charge of goods vehicles produces or claims documents to show that the goods under transportation being moved from a place outside the state to a place outside the state, the authorities are burdened with the proof to show that the goods are indeed loaded in the state, before initiating any proceedings under KVAT Act, 2003? C) Whether under the provisions of section 64 of the KVAT Act, 2003, the commissioner or Additional commissioner is justified in treating the penalty levied as a deterrent measure, under section 53(12) of the KVAT Act, 2003 as a source of 'revenue' and any order of the lower authorities be treated as 'pre-judicial to the interest of revenue' where the orders were fact based without there being any interpretation of law either correctly or otherwise? D) Whether under the facts and circumstances of the case on hand, the order of the respondent is justifiable? ....
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....sport documents. According to the Department, although the Transit Passes related to twenty-one Lorry Receipts, only fourteen Lorry Receipts were available for verification. The authorities also recorded shortages in respect of certain goods when compared with the particulars contained in the transport documents and consequently initiated proceedings for levy of penalty under Section 53(12) of the KVAT Act. 8. Upon completion of the proceedings, the Deputy Commissioner of Commercial Taxes (Enforcement), by order dated 26.08.2010, concluded that the movement of the vehicle and the discrepancies noticed during inspection disclosed an intention to evade payment of tax within the State of Karnataka and accordingly imposed penalty under Section 53(12) of the KVAT Act. The appellant paid the penalty amount under protest in order to secure release of the detained goods vehicle and the consignments. 9. Aggrieved by the said order, the appellant preferred an appeal before the Joint Commissioner of Commercial Taxes (Appeals)-II, Bengaluru. By order dated 20.08.2015, the First Appellate Authority allowed the appeal and set aside the penalty holding, inter alia, that the Transit Passes h....
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....aced reliance on the following judgments:- * M/s. Prominent Road Carriers, Bangalore v. Commissioner of Commercial Taxes in Karnataka, Bangalore and Another reported in 1996(40) Kar.L.J. 284 (HC)(DB); and 7. The verification of the record made by the Additional Commissioner of Commercial Taxes as stated in para 7 of the order made by him showed that the goods vehicle when it was subjected to physical verification revealed that there was a difference in documents with reference to the goods being carried. It is on the basis of this verification, the Additional Commissioner of Commercial Taxes reached the conclusion that the possibility of certain goods being unloaded in the city of Bangalore which were not actually covered by the documents was not excluded. The documents produced, at the time of physical verification, did not relate to the goods being transported on the basis of the documents. Taking into consideration the aforesaid material and the circumstances, the Additional Commissioner of Commercial Taxes set aside the order passed by the DCCT (Appeals) and restored the order of levying penalty made by the Commercial Tax Officer, Tumkur Road Checkpost (Inward....
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....t passes at Attibele, the vehicle did not proceed towards its declared destination at Salem. The material on record discloses that the vehicle was intercepted while proceeding towards Bengaluru. The explanation that the vehicle returned solely for retrieval of registration documents has been examined by the revisional authority and found to be unacceptable. This Court finds no perversity in such conclusion. 17. The record further discloses discrepancies between the goods carried and the accompanying documents. The authorities also noticed that though transit passes had been issued with reference to a larger number of lorry receipts, only a limited number of such documents were available during verification. These circumstances cannot be viewed in isolation. When considered cumulatively with the movement of the vehicle towards Bengaluru, they furnish a reasonable basis for drawing an adverse inference. 18. The submission that surrender of transit passes conclusively establishes genuine interstate movement cannot be accepted. A transit pass is a relevant circumstance but not conclusive proof of actual transportation to the declared destination. Where surrounding facts disclose ....
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....nder Section 53 KVAT Act are founded upon verification of the goods in transit, the accompanying records and the attendant circumstances disclosed during inspection. Where the material on record discloses discrepancies between the goods carried and the documents produced, absence of supporting transport records and other circumstances indicative of possible diversion, the authorities are entitled to draw appropriate inferences and initiate proceedings in accordance with law. Direct proof of actual unloading within the State is not the only mode by which contravention can be established. Question No.(B) is therefore answered against the appellant. Re: Question No. (C): 24. Section 64 of the KVAT Act confers revisional jurisdiction upon the competent authority to examine the legality and propriety of orders passed by subordinate authorities. In the present case, the revisional authority has recorded that the First Appellate Authority proceeded on the sole premise that surrender of Transit Passes was sufficient to negate the allegation of evasion, while overlooking material circumstances such as discrepancies in the transport documents, shortage of goods and the movement of t....