2020 (1) TMI 1175 - HC - VAT and Sales Tax

Imposition of penalty - levy of tax on transformers - allegation is that the driver of the vehicle was not having the road permit in Sugam-G form, as prescribed under the law - HELD THAT - There is concurrent findings of facts by the taxing authorities, as well as Tribunal, that the driver of the vehicle was not carrying any valid road permit Sugam-G, and the road permit produced by the petitioner was re-generated after the date on which the vehicle was intercepted. The expired road permit, as claimed by the petitioner was never produced when the vehicle was intercepted. The Tribunal has also found that since there was nothing on the record to show that the voltage transformers were being transported with valid documents, it was difficult to conclude that the transformers could be treated as capital goods, rather they were the common transformers, which may be used by any other electric generating and transmitting unit, and were liable to tax. These findings of facts cannot be interfered with, in exercise of the writ jurisdiction. The petitioner was liable to pay the penalty, amounting to three times the leviable tax, under sub-Section (6) of Section 72 of the JVAT Act, which has been rightly imposed upon the petitioner - impugned order upheld - petition dismissed.

Summary

Issues:
1. Imposition of penalty on a Transport Company for transporting transformers without a valid road permit.
2. Interpretation of Section 72 of the Jharkhand Value Added Tax Act, 2005.
3. Validity of the impugned orders passed by the authorities and the Tribunal.

Analysis:

1. The petitioner, a Transport Company, challenged the penalty imposed by the Commercial Taxes Tribunal for transporting transformers without a valid road permit. The petitioner argued that the original road permit had expired due to a breakdown, and a new permit was not considered. The petitioner contended that since the transported goods were exempt from tax, no penalty should have been imposed. However, the Tribunal found that the petitioner failed to provide sufficient evidence regarding the road permit and the nature of the transported goods.

2. The petitioner relied on Section 72 of the JVAT Act, emphasizing that check posts aim to prevent tax evasion. The State, on the other hand, highlighted the Tribunal's findings that the petitioner lacked a valid road permit during transportation. The State argued that under Section 72(5) and (6), penalties are applicable for moving goods without proper documentation. The Tribunal concluded that the transformers were taxable goods and imposed a penalty three times the tax liability, which was upheld by the authorities.

3. The High Court upheld the Tribunal's decision, emphasizing the absence of a valid road permit during transportation. The Court noted that the petitioner failed to demonstrate the legitimacy of the road permit and the nature of the transported goods. The Court found no legal error in the orders passed by the authorities and the Tribunal, stating that the penalty was rightly imposed under Section 72(6) of the JVAT Act. Consequently, the writ application was dismissed, affirming the legality of the impugned orders.

In conclusion, the judgment highlights the importance of compliance with documentation requirements during the transportation of goods to prevent tax evasion. The Court's decision underscores the necessity of valid permits and documents for the movement of taxable goods, ultimately upholding the penalty imposed on the Transport Company for transporting transformers without a valid road permit.