2011 (8) TMI 1027 - HC - VAT and Sales Tax

Whether the findings of the learned Tribunal holding that non-reporting at the ICC and not making declaration in the prescribed form could not lead to the conclusion that there was violation of section 51(4) of the Punjab Value Added Tax Act, 2005 with a view to do an attempt to evade tax are correct in the facts and circumstances of the case? Whether it was mandatory on the part of the drivers of the vehicles to voluntarily stop at the ICC and give information of the inter-State transaction for getting form VATXXXVI generated and by not doing so, an attempt to evade the tax was made? Whether penalty was correctly imposed under section 51(7)(c) of the Punjab Value Added Tax Act, 2005 for making an attempt to evade the tax by not giving the information of the transaction even though the goods were sent for loading in the railway wagon in the State of Punjab? Whether the learned Tribunal has failed to consider the law laid down by this honourable High Court that penalty is to be imposed for making an attempt to evade the tax especially when the documents were recovered from the drivers after getting the vehicles stopped when they failed to give information of the transaction at the ICC? Held that - The Tribunal while adjudicating the appeal filed by the assessee had recorded a finding that the driver of the vehicle was in possession of goods receipts along with invoices and produced the same. It was noticed that the goods were to go to Dappar by road and were to be loaded in the railway. It was also observed that the area from where the vehicle had originated, i.e., Shahpur to Dappar, fell within the State of Punjab. On the basis of the aforesaid finding, the Tribunal had concluded that there was no attempt on the part of the assessee to evade tax due or likely to be due. In view of the aforesaid findings, which could not be shown to be perverse in any manner by the learned counsel for the appellants, no substantial question of law, as claimed, arises in this appeal. The appeal is, therefore, dismissed.

Summary

Issues:
Appeal by Revenue under section 68 of Punjab Value Added Tax Act, 2005 against Tribunal's order. Questions of law regarding violation of section 51(4) of the Act, mandatory stop at ICC, penalty imposition, and failure to consider relevant law.

Analysis:

The appeal was filed by the Revenue under section 68 of the Punjab Value Added Tax Act, 2005 against the Tribunal's order dated November 15, 2010. The substantial questions of law raised included whether the failure to report at the ICC and not making declarations could lead to the conclusion of tax evasion under section 51(4) of the Act. Another issue was whether it was mandatory for drivers to stop at the ICC for generating form VATXXXVI, and whether the penalty imposed under section 51(7)(c) for tax evasion was justified. The Tribunal had to consider if the law regarding penalty imposition for tax evasion was correctly applied in this case.

The case involved a partnership firm engaged in manufacturing goods, registered under the Act, selling products within and outside Punjab. Goods were dispatched to a dealer in Bangalore, but the vehicles were detained at the ICC for failure to provide information before leaving Punjab. A penalty was imposed under section 51(7)(c) for alleged tax evasion. The Tribunal, however, found no attempt to evade tax based on the driver's possession of necessary documents and the goods' intended route within Punjab.

The Tribunal's findings indicated that the drivers had all required documents, the goods were to be loaded in the railway from Dappar, falling within Punjab's jurisdiction. The Tribunal concluded that the failure to report at the ICC did not amount to tax evasion under section 51(4) of the Act. As the findings were not proven to be erroneous, the High Court dismissed the appeal, stating no substantial question of law arose. The appeal was dismissed on its merits, and no order was required for the application for condonation of delay in filing the appeal.