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2013 (9) TMI 986 - HC - VAT and Sales TaxDetention of goods - Violation of section 51(6)(b) of the Punjab VAT Act - information had not been generated at the ICC section centre while entering Punjab State - Detaining officer refused to release the goods unless the penalty was paid in cash or bank guarantee equal to 50 per cent of the value of the goods as furnished - Held that - There is a dispute about verification of documents accompanying the goods. The case of the appellant is that the goods in question were duly accompanied by the invoice/GR statutory form VAT D3 and the insurance policy. Further there was stamp of ICC at Shambhu on the GR. The driver out of ignorance being illiterate did not generate the declaration at the ICC. The Tribunal without examining the authenticity and veracity of these documents has on suspicion concluded that there was an attempt to evade tax on the part of the appellant. In view of the afore said documents no conclusion could be drawn that the declaration was not obtained with a view to evade tax unless the documents were rejected on the ground that they were not genuine. The Tribunal was required to have recorded definite finding whether these documents were genuine or not and thereafter adjudicated the matter. - Matter remanded back - Decided in favour of assessee.
Issues involved:
1. Interpretation of section 51(6)(b) of the Punjab Value Added Tax Act, 2005 2. Reliability of documents produced by the driver at the time of checking of goods 3. Admissibility of a driver's statement without providing an opportunity for cross-examination 4. Compliance with section 51(6)(b) by the driver entering Punjab State 5. Imposition of penalty for non-declaration of goods at the entry point in ICC Punjab Issue 1: Interpretation of section 51(6)(b) of the Punjab Value Added Tax Act, 2005: The appellant challenged the imposition of penalty under section 51(7)(c) of the Act, alleging no attempt to evade tax under section 51(6)(b). The appellant contended that compliance with the Haryana VAT Act and submission of necessary documents precluded any tax evasion attempt under the Punjab VAT Act. The Tribunal's suspicion without verifying the authenticity of the documents was deemed unjust. The court held that a conclusive finding on the genuineness of the documents was necessary before inferring tax evasion attempts. Issue 2: Reliability of documents produced by the driver at the time of checking of goods: The appellant argued that the driver's failure to generate a declaration at the ICC was an error, not an attempt to evade tax, as all required documents were provided. The court noted the presence of necessary documents like invoice/GR, VAT D3 form, and insurance policy, with an ICC stamp on the GR. The Tribunal's failure to assess the authenticity of these documents led to an unjust conclusion of tax evasion. The court emphasized the need for a thorough examination of document genuineness before alleging tax evasion. Issue 3: Admissibility of a driver's statement without providing an opportunity for cross-examination: The appellant raised concerns about the reliance on the driver's statement without offering an opportunity for cross-examination. The court acknowledged the importance of cross-examination to establish facts and determine liability accurately. The lack of this opportunity raised doubts about the validity of the penalty imposition based solely on the driver's statement. Issue 4: Compliance with section 51(6)(b) by the driver entering Punjab State: The case revolved around the driver's entry into Punjab State and the alleged violation of section 51(6)(b) of the Punjab VAT Act. The appellant argued that the driver's actions were inadvertent and not intentional tax evasion. The court highlighted the necessity of verifying compliance with statutory provisions before penalizing the appellant for a perceived violation. Issue 5: Imposition of penalty for non-declaration of goods at the entry point in ICC Punjab: The controversy centered on the penalty imposition for the non-declaration of goods at the ICC Punjab entry point. The appellant contended that all necessary documents were presented, and the error lay in the driver's failure to generate a declaration at the ICC. The court emphasized the need for a comprehensive assessment of document authenticity before penalizing the appellant for alleged tax evasion attempts. In conclusion, the court set aside the Tribunal's order and remanded the matter for fresh consideration, emphasizing the importance of verifying document genuineness and ensuring a fair assessment before alleging tax evasion.
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