2011 (4) TMI 1263 - HC - VAT and Sales Tax

Whether there was attempt at evasion of tax? Held that - The Tribunal has dearly held that the goods were the rejected material and in the circumstances, when the vehicle; had voluntarily reported at the check-post and furnished the certificate of the concerned dealer, which was found to be genuine, it cannot be held that the impugned order suffers from perversity. No substantial question of law arises. Appeal dismissed.

Summary

Issues:
1. Discrepancy in goods description between bills accompanying goods and bills of purchase.
2. Charging of Central Sales Tax (CST) on returned goods.
3. Exigibility of goods to CST beyond six months of purchase.
4. Liability for CST on goods returned after a significant period.
5. Allegations of tax evasion by not charging CST on rejected goods.

Analysis:

1. The appeal was filed by the Revenue under section 68 of the Punjab Value Added Tax Act, 2005 against the order of the Punjab VAT Tribunal. The substantial questions of law raised included discrepancies in goods description between bills accompanying goods and bills of purchase. The Tribunal accepted the plea of the assessee that the goods were being returned as rejected material and no sale was involved.

2. The issue of charging Central Sales Tax (CST) on returned goods was raised. The detaining authority imposed a penalty under section 14B(7) of the Punjab General Sales Tax Act, 1948, which was upheld on appeal. However, the Tribunal accepted the explanation provided by the assessee regarding the return of goods and found the documents to be genuine, with no attempt to evade tax.

3. The aspect of exigibility of goods to CST beyond six months of purchase was considered. The Tribunal examined the invoices and certificates provided by the assessee, indicating the return of goods to the original sellers. It was noted that the goods were returned after a significant period, but the Tribunal found no grounds to impose CST in this scenario.

4. The liability for CST on goods returned after almost two years of purchase was deliberated. The Tribunal reviewed the details of the transactions, including invoices and certificates, to ascertain the genuineness of the return process. It was highlighted that the goods were returned as rejected material, and no CST was applicable in this context.

5. Allegations of tax evasion by not charging CST on rejected goods were addressed. The Tribunal examined the documents and explanations provided by the assessee, concluding that there was no attempt to evade tax. The Tribunal found the documents to be proper and genuine, dismissing the appeal by the Revenue. The High Court upheld the Tribunal's decision, stating that no substantial question of law arose in the case.

In conclusion, the High Court dismissed the appeal, affirming the Tribunal's decision regarding the return of goods as rejected material and finding no grounds for imposing CST or alleging tax evasion.