Shivshakti Paper Mill Ltd. vs State of M.P. and Others

Heard. This petition has been filed against the order, annexure P/1.

The petitioner is in the business of manufacturing of crafts papers. It sells the aforesaid papers after manufacturing. The petitioner was assessed in regard to payment of tax vide an order dated January 28, 2006. Subsequently, it was found that the petitioner had sold craft papers of Rs. 20,49,918 to M/s. Quality Industry, Bhopal and to M/s. Vindhya Corrugators, Bhopal of Rs. 14,43,952 and received exemptions in regard to payment of tax under the provisions of the Madhya Pradesh Commercial Tax Act, 1994 (hereinafter referred to as, "the Act of 1994"). However, M/s. Quality Industry, Bhopal and M/s. Vindhya Corrugators, Bhopal were not eligible for exemption of tax because they were granted exemption up to June 24, 2000 and July 11, 2003, respectively.

The proceedings u/s 28 of the Act of 1994 were initiated against the petitioner and a show-cause notice was issued. The manager of the petitioner was appeared before the Assistant Commissioner, Commercial Tax, Bhopal. Thereafter, the authority passed the order imposing a tax of Rs. 2,94,355 and penalty of Rs. 2,94,355 against the petitioner under the provisions of section 28 of the Act of 1994 on the ground that the petitioner claimed exemption of sale of Rs. 20,49,918 and Rs. 14,43,952 on the ground that it sold the craft papers of the aforesaid amounts to M/s. Quality Industry, Bhopal and to M/s. Vindhya Corrugators, Bhopal but the exemption period of M/s. Quality Industry and M/s. Vindhya Corrugators, Bhopal have already been expired. A revision was filed by the petitioner, that has also been dismissed.

The counsel for the petitioner has submitted that the liability of payment of tax is of M/s. Quality Industry, Bhopal and M/s. Vindhya Corrugators, Bhopal and the petitioner is not liable to pay the tax.

It is an admitted fact that the petitioner had received benefit of payment of tax on the ground that it had sold the crafts papers to M/s. Quality Industry, Bhopal and M/s. Vindhya Corrugators, Bhopal of Rs. 20,49,918 and Rs. 14,43,952, respectively and they had certificates of exemption from payment of tax but it was a false declaration, because the period of exemption of M/s. Quality Industry and M/s. Vindhya Corrugators, Bhopal, was already over on June 24, 2000 and on July 11, 2003, respectively. In accordance with the provisions of section 28 of the Act of 1994, if in case any sale or purchase chargeable to tax has been under-assessed or has escaped from assessment, then the authority has power to impose tax and penalty. In the present case, the petitioner had availed of the benefit of exemption from payment of tax on false declaration. In such circumstances, in our opinion, the authority has rightly imposed the tax and penalty against the petitioner. Consequently, we do not find any merit in this petition. It is hereby dismissed. No order as to costs.