2010 (9) TMI 963 - HC - VAT and Sales Tax

Whether the documents accompanying goods were sent to hold that the vehicle was carrying the rejected goods and it was not an outrate sale from the present appellant to Sri Enterprises? Held that - In the absence of any documents accompanying the goods on September 18, 2005, the revisional authority was justified in saying that the documents produced by them run contrary to each other. The invoices and the records showing rejection of goods indicated sale of goods. We do not find any good ground to differ with the said opinion as the facts and the material placed before us would indicate the mandatory requirement of enclosing the concerned form VAT-505 was not there along with the goods so also the excise documents were absent along with the goods. Though excise gate pass was available, but that was not enough to come to the conclusion that it was return of rejected goods and not an inter-State sale. Appeal rejected

Summary

Issues:
1. Seizure of goods vehicle for not having required documents.
2. Imposition of penalty and tax evasion allegations.
3. Dispute over the nature of goods being transported.
4. Non-compliance with statutory requirements.
5. Appeal against penalty order.

Analysis:
1. The case involves the seizure of a goods vehicle for not having mandatory documents like form VAT-505 or form VAT-515 during transportation. A showcause notice was issued to the appellant regarding the legality of the goods movement, and subsequent penalty imposition was based on the alleged contravention of section 53(2) of the KVAT Act, 2003.

2. The revisional authority found the appellate order improper, illegal, and prejudicial to government revenue. Citing precedents, the authority highlighted that penalty can be levied for non-compliance with statutory requirements and legal violations. The revisional authority proposed setting aside the appeal order and restoring the penalty order under section 53(2) of the KVAT Act, 2003.

3. The dispute arose over the nature of goods being transported, with the appellant claiming they were rejected goods returned to the consignor. However, the revisional authority did not accept this contention, emphasizing that the documents submitted did not conclusively prove that the goods were rejected. The absence of form VAT-505 along with the goods further complicated the matter.

4. Non-compliance with statutory requirements, specifically the absence of form VAT-505 or VAT-515 during the transportation of special commodities like iron and steel, was a key issue. The revisional authority justified the penalty imposition based on this non-compliance, citing the mandatory nature of the accompanying forms under the KVAT Act, 2003.

5. The appellate authority, after considering the contentions and evidence presented by the appellant, rejected the appeal. The authority noted discrepancies in the documents submitted, indicating a lack of compliance with statutory requirements. The absence of correspondence between the parties involved further weakened the appellant's claim regarding the nature of the goods being transported.

In conclusion, the judgment upheld the penalty order, emphasizing the importance of compliance with statutory requirements and the need for proper documentation during the transportation of goods, especially special commodities like iron and steel.