2010 (8) TMI 866 - HC - VAT and Sales Tax

Whether the penalty was correctly imposed by the AETC when M/s. Nokia India Pvt. Limited, Zirakpur has shown the sale prior to the purchase of goods in question and the respondent failed to explain the discrepancies in the documents? Whether learned Tribunal has committed error in setting aside the penalty order by ignoring the grounds on which penalty was imposed by the penalty imposing officer? Whether the order passed by the learned Tribunal is sustainable in law under the facts and circumstances of the case? Whether the goods in question were covered with proper and genuine documents and an attempt to evade the tax under the PGST Act was made by showing the sale of the goods in transit and covered under section 3(b) of the CST Act? Held that - It is admitted that the goods were checked at the check-post and there were multiple transactions with the consent of concerned parties and finally, it was the respondent who was to effect the delivery of goods to BSNL. In these circumstances, the finding recorded by the Tribunal that there was no attempt to evade tax cannot be held to be perverse. Moreover, the Tribunal has given liberty to the assessing authority to look into the issue whether sale by Nokia to BSNL was sale in transit under section 6(2) of the Central Sales Tax Act, 1956 or intra-State sale liable to tax under the local law In above circumstances, the questions proposed are answered against the Department and in favour of the dealer.

Summary

Issues:
- Appeal by State of Punjab under section 68(2) of the Punjab Value Added Tax Act, 2005 against VAT Tribunal's order
- Imposition of penalty by AETC on M/s. Nokia India Pvt. Limited for discrepancies in documents
- Tribunal setting aside penalty order and grounds for imposition of penalty
- Sustainability of Tribunal's order under the facts and circumstances
- Attempt to evade tax under the Punjab General Sales Tax Act, 1948
- Detention of goods under section 14B(2) of the 1948 Act at check-post in Punjab
- Discrepancies in bills and documents seized during checking
- Multiple transactions involving GTL, IWTL, Nokia, and BSNL
- Allegation of attempt to evade tax by the respondent, a dealer of Delhi
- Tribunal's finding on the absence of tax evasion attempt
- Interpretation of sale in transit under section 6(2) of the Central Sales Tax Act, 1956 or intra-State sale liable to tax under local law

Analysis:
The State of Punjab filed an appeal under section 68(2) of the Punjab Value Added Tax Act, 2005, challenging the VAT Tribunal's order imposing a penalty on M/s. Nokia India Pvt. Limited for discrepancies in documents. The key issues raised included the correctness of penalty imposition, the Tribunal's error in setting aside the penalty order, and the sustainability of the Tribunal's decision under the given circumstances. The case involved the detention of goods under the Punjab General Sales Tax Act, 1948, at a check-post in Punjab based on allegations of tax evasion by the respondent, a Delhi-based dealer. The Tribunal's decision favored the respondent, concluding that there was no attempt to evade tax, despite the multiple transactions involving GTL, IWTL, Nokia, and BSNL.

During the checking at the check-post, various bills and documents were seized, indicating transactions between the parties. The documents revealed sales between GTL and the respondent, as well as between IWTL and Nokia. Despite discrepancies in the dates of bills and the issuance of delivery challans and GRs, the Tribunal found no evidence of tax evasion. The Tribunal highlighted that the ultimate consignee was BSNL, with all intervening parties duly mentioned in the documents. The Tribunal's decision was based on the acknowledgment of multiple transactions with the consent of concerned parties, leading to the respondent's responsibility for delivering goods to BSNL.

The Tribunal's finding that there was no attempt to evade tax was upheld, with the Tribunal granting the assessing authority the liberty to examine whether the sale by Nokia to BSNL constituted a sale in transit under the Central Sales Tax Act, 1956, or an intra-State sale subject to local tax laws. Ultimately, the questions proposed were answered against the Department and in favor of the dealer, resulting in the dismissal of the appeal. The judgment emphasized the importance of thorough examination of transaction details and legal provisions to determine tax liabilities accurately.