2007 (7) TMI 582 - HC - VAT and Sales Tax

Imposing tax and inflicting penalty - Held that - No substantive question of law would arise for our determination for the reason that all the questions are pure questions of fact. It has been categorically found by the first appellate authority as well as by the Tribunal that a novel devise was invented by the appellant to avail tax benefits as he went to data entry operators window at ICC, Madhopur along with three bill Nos. 158 to 160 and tried to get ST XXXVI form generated. There is ample evidence on record to show that the appellant made an unsuccessful attempt at ICC, Madhopur to generate ST XXXVI form when he wen to data entry operators window along with bill Nos. 158 to 160 in respect of which claim has been made for granting concession in tax at two per cent. The appellant was not able to show to the authorities at ICC, Madhopur that those three bills were in respect of trucks loaded with goods. There is ample evidence on record to show that no goods vehicles could be connected to the bill Nos. 158 to 160 in respect of which claim for concession of tax has been made. The findings are based on evidence. We cannot while adjudicating a question of law examine the adequacy of evidence and by re-appreciating evidence reach a conclusion different than the one recorded by the Tribunal. Similar would be the position with regard to other two questions. Therefore, we find that the appeal is wholly misconceived and does not warrant admission. Appeal dismissed.

Summary

Issues:
Appeal against order imposing tax and penalty under Punjab Value Added Tax Act, 2005 based on fake invoices for inter-State transactions.

Analysis:
The appellant, a firm engaged in timber resale, filed a return for the quarter ending June 30, 2005, which was audited by the Designated Officer under section 28(1) of the Act. Subsequently, a surprise inspection revealed fake inter-State transactions with M/s. Rudrakash Sales Corporation, Kathua. Investigations confirmed that goods never crossed the ICC, Madhopur, and the owner attempted to generate fake VAT forms. The Designated Officer imposed tax and penalty of Rs. 2,57,795 under sections 56 and 57 of the Act. The appeal against this order was dismissed by the Tribunal, upholding the tax and penalty. The Tribunal found the appellant attempted to evade tax by showing fake inter-State movement of goods. The Tribunal dismissed the appeal, emphasizing the mala fide intentions of the appellant in connivance with the consignee to reduce tax liability.

The appellant challenged the Tribunal's order on various legal grounds, questioning the basis of findings, movement of goods, imposition of penalty, and the nature of the Tribunal's order. The High Court analyzed these questions and found them to be questions of fact rather than substantive questions of law. The Court noted that the appellant's actions at ICC, Madhopur, were clear attempts to evade tax benefits. The Court upheld the Tribunal's findings based on evidence and dismissed the appeal, deeming it misconceived and not warranting admission. The Court concluded that no substantive question of law arose for determination, as the findings were supported by ample evidence and the appeal lacked merit.

In conclusion, the High Court upheld the Tribunal's decision, dismissing the appeal against the order imposing tax and penalty under the Punjab Value Added Tax Act, 2005. The Court found the appellant's actions to be mala fide, attempting to evade tax by showing fake inter-State transactions. The Court emphasized that the questions raised by the appellant were factual in nature and not substantive questions of law, supporting the Tribunal's findings based on evidence. The appeal was deemed misconceived and dismissed accordingly.