Sri Durga Distilleries Vs. Commissioner of Commercial Taxes and anr. - Court Judgment

Excerpt:
- karnataka scheduled castes & scheduled tribes (prohibition of transfer of certain lands) act, 1978, sections 4 & 5-a: [ram mohan reddy,j] grantee not belonging to scheduled caste or scheduled tribe conveyance of land to others granted - question whether grantee was scheduled caste or scheduled tribe - petitioner purchaser of granted land contended before assistant commissioner that the original grantee did not belong to either scheduled caste or scheduled tribe on the date of grant - assistant commissioner after noticing the caste certificate declined to record finding that conveyance was hit by section 4 in appeal deputy commissioner reversed the finding, but did not make reference to the application for grant of land - aggrieved filed writ petition challenging the order of deputy commissioner held, orders of the deputy commissioner suffers from an error apparent on the fact of record for non-consideration of relevant material. order of deputy commissioner was set aside and matter remitted back - 2. we have applied our mind to the contention that has been raised and we do share the view that in cases where the suppression comes to light, it would be perfectly rational to assume that had the detection not taken place, that the same pattern would have been continued. it is precisely for this reason that we see no ground to interfere with the order in question. we do concede that even as far as punishments or penalties are concerned that the courts and authorities must follow a rational basis and conform to the well-settled principles that emerge from the doctrine of punishments.m.f. saldanha, j. 1. we have heard the learned counsel on both sides in this appeal. the appellants are manufacturers of fenny and it was alleged that a suppression was detected during the assessment year july 1, 1986 to june 30, 1987. the date of detection is material because it was on december 13, 1986 that the intelligence authority notice that the value of the suppression amounted to rs. 1,26,300. the assessing authority has added on an equivalent amount and proceeded on the basis that it would be rational to assume that a pattern had been detected and that consequently, the suppression should be valued at rs. 2,52,600 which is double the value of the suppression that was originally detected. the submission canvassed is that in the first instance there is nothing to indicate that the assessee would have proceeded in the same manner for the remaining period and more importantly that it is most unlikely that anything of this sort would happen once the detection has taken place and that consequently, the approach of the authority has been called into question through this order. also, the submission canvassed is that adding on of an equivalent amount is arbitrary, that it is harsh and that it is excessive. the learned government advocate has supported the order and he has specifically submitted that in cases of tax evasion that the courts must adopt a stringent approach in so far as the percentage of detection is relatively low and it is very necessary that deterrent action must follow in those of the cases which it deserves.2. we have applied our mind to the contention that has been raised and we do share the view that in cases where the suppression comes to light, it would be perfectly rational to assume that had the detection not taken place, that the same pattern would have been continued. apart from this it is equally necessary that the department must take action that would work as a real deterrent in so far as if the penalty that ultimately emerges is so light or so innocuous, it would be misunderstood as an incentive. it is precisely for this reason that we see no ground to interfere with the order in question. we do concede that even as far as punishments or penalties are concerned that the courts and authorities must follow a rational basis and conform to the well-settled principles that emerge from the doctrine of punishments. if the penalty imposed is vindictive, if it is abnormally harsh or if the order passed bears no rational basis to the principles of reasonable estimation and is a runaway or a perverse order then interference would certainly be called for. none of these ingredients are present in this case. there is therefore no justification for interference.3. the appeal accordingly fails and stands dismissed. no order as to costs.