2015 (10) TMI 1299 - HC - VAT and Sales Tax

Whether bill of entry was not a valid document or invoice and, therefore, the penalty u/s 86(19) of the DVAT Act has been correctly imposed - impounding order u/s 59/61 of the DVAT and recorded the reason for doing so as Goods without Bill - Held that - there is no mention of the absence of GRs in the Mal Roko Aadesh‟. The only reason cited is that the goods were without bill . The relevant documents of import, including the B/E, customs certificate etc. were produced by the dealer on the next day along with the letter dated 29th July 2011. - The third reason mentioned in the opinions of the majority is that the statement of the driver substantiated the case of the VATO. This statement was, however, never put to the Appellant and has been held to be inadmissible - there was no legal justification for issuance of the impugned penalty order under Section 86 (19) of the DVAT Act. - Decided in favour of assessee.

Summary

Issues:
Appeal against order dismissing appellant's appeal under DVAT Act, 2004 based on penalty imposed for goods without bill, subsequent actions by VATO, appeal to OHA, confirmation of penalty, appeal to Tribunal, majority decision upholding penalty, dissenting opinion, legal justification for penalty, relevance of documents submitted, statement of driver, question of law on validity of penalty under Section 86(19) of DVAT Act.

Analysis:

1. The appellant, a registered dealer of footwear and garments, imported goods cleared by Customs but intercepted by VATO for lacking documents, leading to penalty under DVAT Act. The appellant replied promptly with necessary documents, but VATO imposed penalty and released goods upon payment. OHA confirmed penalty, leading to appeal before Tribunal.

2. The Tribunal, comprising three members, upheld the penalty by majority decision, with one member dissenting. Majority found penalty justified due to absence of documents and concerns about goods' destination. Dissenting member highlighted prompt compliance by appellant with VATO's order and relevance of submitted documents, citing a previous court decision.

3. The Court framed a question of law regarding the validity of the penalty under Section 86(19) of the DVAT Act. The Court analyzed the facts, emphasizing the single reason cited in the impounding order for lacking bill, appellant's timely response with relevant documents, and discrepancies in the majority's reasoning. The Court found no legal basis for the penalty and set aside the Tribunal's order, ruling in favor of the appellant.

4. The Court's detailed analysis focused on the documents submitted by the appellant, the lack of additional grounds for penalty beyond the impounding order, and the inadmissibility of the driver's statement. The Court's decision highlighted the importance of prompt compliance and proper consideration of all relevant factors in imposing penalties under the DVAT Act.

5. In conclusion, the Court allowed the appeal, setting aside the Tribunal's decision and ruling in favor of the appellant. The Court made no orders as to costs, emphasizing the legal justification for its decision based on the facts and circumstances of the case.