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 1 d of the Act and number that he tried to substantiate his returns by producing a false certificate the said false certificate was number 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 1 d is unsustainable in law.
In support of the said returns, the respondent produced a certificate issued by the District Industries center, Kottayam, dated 27 10 1986 granting sales tax exemption for the said three years.
Subsequently, however, it appeals to have companye to the knowledge of the authorities that the said certificate dated 27 10 1986 was a false and forged one.
On the basis of the said certificate, the sales tax officer granted exemption to the extent of ninety per cent of the turnover.
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.
The respondent filed returns for three assessment years, namely 1983 84, 1984 85 and 1985 86.
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.
Accordingly, proceedings were taken under Section 45 A 1 d against the respondent.
It is only in support of the said plea that it purported to obtain and file a certificate which was found to be forged.
These appeals are preferred against the judgment of a Division Bench of the Kerala High Court allowing the appeals preferred by the respondent and deleting the penalty levied upon it.
Leave granted.
After hearing the respondent, penalties were levied.
Heard the companynsel for both the parties.
So far as the reasoning of the High Court, as companytained in the order under appeal is companycerned, we find it difficult to agree with it.
