The petitioner is a transporting firm that was engaged in supply of firewood to M/s.Tata Tea Limited. For the assessment years 1996-97, 1997-98 and 1998-99, penalty proceedings were initiated against the petitioner in terms of Section 45A of the Kerala General Sales Tax Act, 1963, hereinafter referred to as the “KGST Act”, on the allegation that the petitioner had failed to take out registration and comply with other procedural formalities under the KGST Act, and further that it had suppressed the sales turnover in respect of the firewood that was supplied to M/s.Tata Tea Limited. The penalty proceedings culminated in Exts.P1 to P3 orders of penalty imposed on the petitioner. Aggrieved by the said orders, the petitioner preferred a revision petition before the Deputy Commissioner of Sales Tax, who, by Ext.P4 order, found that the petitioner had since paid the entire tax amount that was determined by the 1st respondent, and further that M/s.Tata Tea Ltd. had also paid purchase tax on the procurement of firewood from the petitioner. In view of these facts, the revisional authority deemed it appropriate to reduce the penalty amount imposed on the petitioner to Rs.10,000/- for each of the aforementioned assessment years. It would appear that the 2nd respondent initiated suo motu revision proceedings under Section 37 of the KGST Act against Ext.P4 order of the Deputy Commissioner of Sales tax. In Ext.P5 order that was passed in those proceedings, the 2nd respondent restored the original orders of penalty by finding that the petitioner had effected payment of the tax amounts only subsequent to the detection of the alleged offence by the respondents and further, that while effecting payment of tax, the petitioner had not included various amounts pertaining to cutting charges and loading charges in the turnover that was adopted for the purposes of paying the tax. In the writ petition, Ext.P5 order of the 2nd respondent is impugned inter alia on the ground that it does not take into account the fact that, the tax amounts due to the Department had already been paid, both by the petitioner as well as M/s Tata Tea Ltd., and all that remained to be considered were certain technical lapses that had been occasioned by the petitioner, for which the maximum penalty that could be imposed was only Rs.10,000/- per assessment year. 2. A counter affidavit has been filed on behalf of the 2nd respondent, wherein, Ext.P5 order passed by the 2nd respondent is sought to be justified on the ground that the petitioner had committed various irregularities while effecting sale of firewood to M/s.Tata Tea Limited. It is specifically pointed out that the petitioner had not taken any registration under the KGST Act and also not filed any return before the Assessing authorities. It is also pointed out that the petitioner had not produced any proof that M/s.Tata Tea Ltd. had already paid purchase tax, before the date of the orders imposing penalty. The said circumstances are cited to support the order of the 2nd respondent that is impugned in the writ petition.
3. I have heard Smt.S.K.Devi, the learned senior counsel appearing on behalf of the petitioner as also Smt.Lilly.K.T., the learned Government Pleader appearing on behalf of the respondents.
4. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I find that both in Ext.P4 and Ext.P5 orders, it is clearly stated that in respect of the transaction relating to supply of firewood by the petitioner to M/s.Tata Tea Ltd. during the assessment years in question, amounts were paid towards purchase tax by M/s.Tata Tea Limited. It is also apparent from the documents produced in the writ petition that the petitioner also paid amounts by way of sales tax in respect of the same transactions for the said assessment years. It is taking into account these payments made by the petitioner as well as M/s.Tata Tea Limited that the Deputy Commissioner, while passing Ext.P4 order modifying the penalty amounts imposed on the petitioner, found that the petitioner could be made liable only for a maximum of Rs.10,000/- per assessment year for the technical breaches noticed. In Ext.P5 order of the 2nd respondent also, there is a reference to the payment of tax by the petitioner, as well as the payment of purchase tax in respect of the same transactions by M/s.Tata Tea Limited. There appears to be an inherent contradiction in the findings of the respondents, in that the liability of purchase tax on a transaction under Section 5A of the KGST Act arises only in the situation when in a taxable sale, the seller is found not liable to pay tax under the KGST Act and the other conditions exist for levying a purchase tax on the purchaser. Thus, if the buyer has been fastened with the liability under Section 5A for purchase tax, then it follows that there cannot be a liability in terms of Section 5 on the seller in respect of the same transaction. This aspect has not been noted by the 2nd respondent in Ext.P5 order passed by him. If the tax paid by the purchaser, namely, M/s.Tata Tea Ltd. under Section 5A of the KGST Act is in discharge of the tax liability pertaining to the transaction in question, then the amounts collected by the Department from the petitioner by way of tax are obviously excess collections of tax. At any rate, in the present writ petition, there is no claim for refund by the petitioner. In view of the payments already made by the petitioner, and in view of the finding that in respect of the transaction, the purchaser, namely, M/s.Tata Tea Ltd. has already discharged a tax liability in terms of Section 5A of the KGST Act, I feel that the penalty imposed on the petitioner for the assessment years in question should be confined to the amounts found in Ext.P4 order of the Deputy Commissioner, which has not been impugned by the petitioner. In that view of the matter, I quash Ext.P5 order of the 2nd respondent and declare that the amounts to be paid by the petitioner by way of penalty for the assessment years 1996-97, 1997-98 and 1998-99 shall only be as specified in Ext.P4 order of the Deputy Commissioner.
The writ petition is allowed to the above extent.
prp A.K.JAYASANKARAN NAMBIAR JUDGE