STATE OF ANDHRA PRADESH Vs. KUMARASWAMY OIL TRADING COMPANY
HIGH COURT OF ANDHRA PRADESH
STATE OF ANDHRA PRADESH
KUMARASWAMY OIL TRADING COMPANY
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SYED SHAH MOHAMMED QUADRI, J. -
(1.)THE State is the revision petitioner in this tax revision petition filed under section 22 (1) of the Andhra Pradesh General Sales Tax Act, 1957. In respect of certain turnover, the respondent-company claimed exemption. But it could not substantiate its claim for exemption. Consequently, no exemption was granted to it. It filed an appeal. But there also, it lost. During the reassessment proceedings, it did not produce any evidence in support of its claim except contending that on the basis of the registration number of one Messrs. Bhavani Traders, it was entitled for exemption. That was not accepted. Then the assessing authority proceeded to levy the penalty under section 7a (2) of the A. P. General Sales Tax Act. The Tribunal found that the assessing authority did not establish that there was either collusion between the said M/s. Bhavani Traders and the appellant in support of the claim for exemption or that it knowingly produced false bills. In those circumstances, the Tribunal held that levying of penalty under section 7a (2) was not justified and set aside the order of penalty.
(2.)THE learned Government Pleader submits that the very fact of making a false claim empowers the authority to levy penalty under section 7a (2 ). We are unable to accept this contention. Section 7a (2) on the relevant date provided that where a dealer knowingly issues or produces a false bill, voucher, declaration, certificate or other document with a view to support any claim that the transaction of sale or purchase effected by him or any other dealer is not liable to be taxed or is liable to be taxed at a reduced rate, the assessing authority, on detecting such issue or production, may direct the dealer issuing or producing such document to pay a penalty; in the case of first such detection, three times the tax due in respect of such transaction and in the case of second or subsequent detection, five times the tax due in respect of such transaction. In this case, there is no finding that false documents have been produced in support of the claim knowingly. The assessee made a claim, but could not substantiate the same. Therefore, in our view, the Tribunal was justified in setting aside the penalty imposed by the assessing authority. Tax revision case is, therefore, dismissed. Petition dismissed.
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