2018 (6) TMI 1618 - HC - VAT and Sales Tax

Imposition of penalty - transportation of goods without declaration in an enroute check post - HELD THAT - A non-declaration raises a presumption of evasion. It is also to be noticed that there is considerable delay in the transport. The invoice was of 23.5.2006, the transport was detained at Thrissur less than 70 KMs from the originating point, after four days. There was no explanation offered for the delay. We are of the opinion that the Tribunal erred in accepting the explanation of the assessee that there was no willful omission or deliberate attempt, since the non-declaration is attributable to the ignorance of the driver. We cannot countenance such a stand taken by the Tribunal - the questions of law answered against the assessee and in favor of the Revenue and set aside the order of the Tribunal confirming that of the first appellate authority. It may not be appropriate for the Tribunal to take such an approach, especially when the binding decisions of this Court which are not distinguishable on facts, stare them in their face. If such an attitude is taken, considering the multinational standing of an assessee and relying on the ignorance of a driver, tax administration would be put in jeopardy. Revision allowed.

Summary

Issues:
1. Penalty imposed on the assessee for transportation of goods without declaration at an enroute check post.
2. Tribunal's interference with the penalty despite previous court decisions upholding similar penalties.

Issue 1 - Penalty Imposed on Assessee:
The case involved a dealer in home appliances transporting goods without declaring them at an enroute check post, leading to a penalty of ?59,000 being levied. The Tribunal, however, deleted the penalty based on the argument that the non-declaration was an omission of the driver and considered the company's multinational standing. The High Court disagreed with the Tribunal's decision, citing previous court judgments where similar omissions were not accepted as valid explanations. The Court emphasized that non-declaration raises a presumption of evasion, especially when there is a considerable delay in transport without a satisfactory explanation. The Tribunal's acceptance of the driver's ignorance as a defense was deemed unacceptable, and the Court ruled in favor of the Revenue, setting aside the Tribunal's order.

Issue 2 - Tribunal's Interference with Penalty:
The High Court criticized the Tribunal for deviating from established court decisions and taking a lenient approach towards the penalty imposed on the assessee. The Court highlighted that the Tribunal's decision, based on the company's reputation and the driver's ignorance, could jeopardize tax administration. By reinstating the penalty and emphasizing the importance of upholding penalties for non-declaration of goods during transport, the Court aimed to maintain consistency in tax enforcement and prevent preferential treatment based on the stature of the assessee. The Court allowed the revision, setting aside the Tribunal's order and restoring that of the first appellate authority without imposing any costs.