State of Kerala Vs. Surface Coats , Neelimangalma
EmailAppeal: Civil Appeals Nos. . . . of 1995 ,
(Arising out of SLPs (C) Nos. 9685-87 of 1991 )
(Arising out of SLPs (C) Nos. 9685-87 of 1991 )
Petitioner: State of Kerala
Respondent: Surface Coats , Neelimangalma
Apeal: Civil Appeals Nos. . . . of 1995 ,
(Arising out of SLPs (C) Nos. 9685-87 of 1991 )
(Arising out of SLPs (C) Nos. 9685-87 of 1991 )
Judges: B.P. JEEVAN REDDY & S.B. MAJMUDAR , JJ.
Date of Judgment: Jun 12, 1995
Head Note:
SALES TAX
Kerala General Sales Tax Act
Section 45-A(1)(d) – Penalty – Sales Tax exemption claimed and granted on basis of exemption certificate , which later found to be forged – High Court setting aside penalty on grounds that it was not ” untrue or incorrect return ” – Justification – Held that reasoning of High Court are untenable as exemption claimed on basis of forged certificate was ” untrue and incorrect ” . Owing to another certificate , matter remitted for fresh decision after looking into fresh certificate produced before Supreme Court.
Held:
In the returns filed by the respondent , it claimed a total exemption of its turnover from the levy of sales tax on the ground that the same is exempted by virtue of a government order . It is only in support of the said plea that it purported to obtain and file a certificate which was found to be forged . In the circumstances , it must necessarily follow that the returns filed were indeed untrue and incorrect . The claim for exemption was undoubtedly a false one , i.e. , an untrue and incorrect one . The fact that the certificate in support of the said plea was filed later does in no way detract from the fact that the returns filed were untrue and incorrect . In any event , it makes no dif-ference whether the forged certificate was filed along with the returns or at a later point of time . ( Para 3 )
JUDGEMENT:
ORDER
1 . Heard the counsel for both the parties .
2 . Leave granted .
3 . These appeals are preferred against the judgment of a Divi-sion Bench of the Kerala High Court allowing the appeals pre-ferred by the respondent and deleting the penalty levied upon it . The respondent filed returns for three assessment years , namely 1983-84 , 1984-85 and 1985-86 . In these returns , the respondent disclosed certain turnover , but claimed that the entire turnover was exempt from tax on the ground that the products were of an industry which were exempted from sales tax by a government order . In support of the said returns , the respondent produced a certificate issued by the District Industries Centre , Kottayam , dated 27-10-1986 granting sales tax exemption for the said three years . On the basis of the said certificate , the sales tax officer granted exemption to the extent of ninety per cent of the turnover . Subsequently , however , it appears to have come to the knowledge of the authorities that the said certificate dated 27-10-1986 was a false and forged one . Accordingly , proceedings were taken under Section 45-A(l)(d) against the respondent . After hearing the respondent , penalties were levied . When the matter came to the High Court , the High Court allowed the appeals on the following ground : the charge against the assessee was one of filing ” untrue or incorrect return ” within the meaning of Section 45-A(l)(d) of the Act and not that he tried to substan-tiate his returns by producing a false certificate ; the said false certificate was not filed along with the return but much later , i.e. , about a year later , and that , therefore , the levy of penalty under Section 45-A(l)(d) is unsustainable in law . So far as the reasoning of the High Court , as contained in the order under appeal is concerned , we find it difficult to agree with it . In the returns filed by the respondent , it claimed a total exemp-tion of its turnover from the levy of sales tax on the ground that the same is exempted by virtue of a government order . It is only in support of the said plea that it purported to obtain and file a certificate which was found to be forged . In the circum-stances , it must necessarily follow that the returns filed were indeed untrue and incorrect . The claim for exemption was un-doubtedly a false one , i.e. , an untrue and incorrect one . The fact that the certificate in support of the said plea was filed later does in no way detract from the fact that the returns filed were untrue and incorrect . In any event , it makes no difference whether the forged certificate was filed along with the returns or at a later point of time .
4 . At this stage , the learned counsel for the respondent brought to our notice the order of the Deputy Commissioner of Agricultural Income Tax and Sales Tax , Kottayam , dated 22-3-1989 , which refers to yet another certificate dated 8-3-1989 produced by the respondent which , according to him , was issued by the Industries Department , whereunder the respondent-firm was said to be eligible for sales tax exemption for Rs 3 ,05 ,939 for the period 10-6-1982 to 9-6-1987 . The contention of the learned counsel for the respondent is that this is a genuine certificate and that the one filed earlier , namely certificate dated 27-10-1986 , which is found to be a forged one , was obtained by its employee without the knowledge of the respondent . The submission is that the respondent is indeed entitled to sales tax exemption and he should not be penalised for the unauthorised act of his employee . In the judgment of the High Court , however , there is no reference to this certificate . Indeed , the learned counsel for the appellant points out that even in the order of the Board dated 26-2-1990 , there is no reference to this certificate .
5 . Since the matter pertains to penalty and the offence , if proved , is undoubtedly a serious one , we think it appropriate that the aspect now brought to our notice be looked into and pronounced upon . Accordingly , we allow these appeals , set aside the judgment of the High Court and remit the matter to the High Court for a fresh disposal according to law . The High Court may also examine whether the certificate dated 8-3-1989 referred to in the order of the Deputy Commissioner afore-mentioned was indeed filed before the authorities and whether it is true and genuine and its effect .
6 .There will be no order as to costs .
1 . Heard the counsel for both the parties .
2 . Leave granted .
3 . These appeals are preferred against the judgment of a Divi-sion Bench of the Kerala High Court allowing the appeals pre-ferred by the respondent and deleting the penalty levied upon it . The respondent filed returns for three assessment years , namely 1983-84 , 1984-85 and 1985-86 . In these returns , the respondent disclosed certain turnover , but claimed that the entire turnover was exempt from tax on the ground that the products were of an industry which were exempted from sales tax by a government order . In support of the said returns , the respondent produced a certificate issued by the District Industries Centre , Kottayam , dated 27-10-1986 granting sales tax exemption for the said three years . On the basis of the said certificate , the sales tax officer granted exemption to the extent of ninety per cent of the turnover . Subsequently , however , it appears to have come to the knowledge of the authorities that the said certificate dated 27-10-1986 was a false and forged one . Accordingly , proceedings were taken under Section 45-A(l)(d) against the respondent . After hearing the respondent , penalties were levied . When the matter came to the High Court , the High Court allowed the appeals on the following ground : the charge against the assessee was one of filing ” untrue or incorrect return ” within the meaning of Section 45-A(l)(d) of the Act and not that he tried to substan-tiate his returns by producing a false certificate ; the said false certificate was not filed along with the return but much later , i.e. , about a year later , and that , therefore , the levy of penalty under Section 45-A(l)(d) is unsustainable in law . So far as the reasoning of the High Court , as contained in the order under appeal is concerned , we find it difficult to agree with it . In the returns filed by the respondent , it claimed a total exemp-tion of its turnover from the levy of sales tax on the ground that the same is exempted by virtue of a government order . It is only in support of the said plea that it purported to obtain and file a certificate which was found to be forged . In the circum-stances , it must necessarily follow that the returns filed were indeed untrue and incorrect . The claim for exemption was un-doubtedly a false one , i.e. , an untrue and incorrect one . The fact that the certificate in support of the said plea was filed later does in no way detract from the fact that the returns filed were untrue and incorrect . In any event , it makes no difference whether the forged certificate was filed along with the returns or at a later point of time .
4 . At this stage , the learned counsel for the respondent brought to our notice the order of the Deputy Commissioner of Agricultural Income Tax and Sales Tax , Kottayam , dated 22-3-1989 , which refers to yet another certificate dated 8-3-1989 produced by the respondent which , according to him , was issued by the Industries Department , whereunder the respondent-firm was said to be eligible for sales tax exemption for Rs 3 ,05 ,939 for the period 10-6-1982 to 9-6-1987 . The contention of the learned counsel for the respondent is that this is a genuine certificate and that the one filed earlier , namely certificate dated 27-10-1986 , which is found to be a forged one , was obtained by its employee without the knowledge of the respondent . The submission is that the respondent is indeed entitled to sales tax exemption and he should not be penalised for the unauthorised act of his employee . In the judgment of the High Court , however , there is no reference to this certificate . Indeed , the learned counsel for the appellant points out that even in the order of the Board dated 26-2-1990 , there is no reference to this certificate .
5 . Since the matter pertains to penalty and the offence , if proved , is undoubtedly a serious one , we think it appropriate that the aspect now brought to our notice be looked into and pronounced upon . Accordingly , we allow these appeals , set aside the judgment of the High Court and remit the matter to the High Court for a fresh disposal according to law . The High Court may also examine whether the certificate dated 8-3-1989 referred to in the order of the Deputy Commissioner afore-mentioned was indeed filed before the authorities and whether it is true and genuine and its effect .
6 .There will be no order as to costs .
