2015 (9) TMI 413 - HC - VAT and Sales Tax

Revocation of Penalty Tribunal vide impugned order set aside penalty order and remanded matter back for ascertaining rate of tax applicable It was alleged that Tribunal erred in cancelling penalty as dealer had transported inverters and not UPSs thus, was liable to pay tax at rate of 12.5 per cent whereas tax on UPSs was leviable at rate of four per cent Held that - Tribunal came to conclusion that nature of transaction could be determined by Assessing Authority Assessing Authority shall adjudicate whether goods were actually inverters or UPS Officers who were authorised to carry out checking on roadside in exercise of powers conferred under section 51 of Act cannot delve into question of nature of item and rate of tax applicable thereto No error could be pointed out in approach of Tribunal which may warrant interference No merit in appeal Decided against revenue.

Summary

Issues:
Appeal under section 68 of the Punjab Value Added Tax Act, 2005 against the order of the Value Added Tax Tribunal, Punjab raising substantial questions of law regarding sustainability of the Tribunal's order, justification of setting aside penalty order, and application of a specific judgment to the present case.

Analysis:
The appeal was filed by the State against the order of the Value Added Tax Tribunal, Punjab, seeking to address substantial questions of law. The dispute arose when a vehicle loaded with inverters and UPSs was detained for verification as the actual goods did not match the description on the documents. The Assistant Excise and Taxation Commissioner imposed a penalty for tax evasion, which led to a series of appeals and remand orders. The Tribunal eventually directed the case to the assessing authority to determine the rate of tax applicable to the goods, considering expert opinion if necessary. The Tribunal emphasized that the nature of the transaction should be decided by the Assessing Authority and not by officers conducting roadside checks under the Act.

The State contended that the penalty was justified as the dealer transported inverters instead of UPSs, leading to different tax rates. However, the Tribunal, in its order, referred to a specific judgment highlighting the importance of expert opinion in determining the nature of goods for tax purposes. The Tribunal emphasized that the Assessing Authority should ascertain whether the goods were actually inverters or UPSs, and the rate of tax should be decided accordingly. It was reiterated that officers conducting checks under the Act should not determine the disputed question of taxability, which falls under the jurisdiction of the Assessing Authority.

The Tribunal's decision was based on the principle that the nature of the transaction should be determined by the Assessing Authority, and expert opinion could be sought if needed to ascertain the correct tax rate applicable to the goods. The Tribunal's approach was deemed appropriate, and no substantial question of law was found to warrant interference by the court. Consequently, the appeal was dismissed, and the application for condonation of delay was left open for further consideration.