2016 (3) TMI 767 - HC - VAT and Sales Tax

Imposition of penalty under H.P. General Sales Tax Act, 1968 - Violation of the provisions of Section 22(4) of the Act - Truck loaded with 240 quintals of steel (Saria) intercepted and found not having bills and other documents and even the ST XXVI-A form had not been filled on the inter-State Barrier - Held that - The records reveal that during inspection carried out on 1.5.1995 it was found that goods without bill or form ST XXVI-A were being carried in two trucks and neither the driver nor the petitioner could satisfy the authority regarding the same being tax paid goods. It is also borne out from the record that the respondent authorities had infact decided to detain the goods in terms of Section 26(6), but it was on account of the petitioner s persuasion that he was a local trader that the goods instead of being detained were ordered to be released to him on sapurdari . Prior to doing so, statement of the driver as also Sh.Ved Parkash were duly recorded by the concerned officer. Thus, it is more than established that the procedure, as envisaged under Section 22(6) & (7) of the Act, has been duly followed. Also, petitioner has failed to produce the bills or any other document before this court whereby it could be inferred that he had paid the requisite tax. Having failed to do so, the decisions rendered by the authorities below have not to be interfered with. - Decided against the petitioner

Summary

Issues:
1. Imposition of penalty under the H.P. General Sales Tax Act, 1968 on the petitioner for violation of Section 22(4) of the Act.
2. Failure of the petitioner to produce necessary documents leading to penalty imposition.
3. Dismissal of appeals due to non-compliance with deposit requirements.
4. Allegations of proceedings being initiated to evade liability.
5. Compliance with the procedural requirements under Section 22(6) and (7) of the Act.

Imposition of Penalty:
The judgment revolves around the imposition of a penalty of Rs. 36,000 on the petitioner under the H.P. General Sales Tax Act, 1968. The penalty was upheld by the H.P. Tax Tribunal and two lower authorities due to the petitioner's violation of Section 22(4) of the Act. The petitioner failed to produce necessary documents during an inspection where goods were found without proper documentation, leading to the penalty imposition.

Failure to Produce Documents:
The petitioner's partner, when questioned, showed ignorance regarding the missing bills and documents, resulting in the initiation of proceedings against the petitioner. Despite claiming to possess all required documents, the petitioner failed to present them before the authorities, leading to the penalty imposition. The court noted that self-serving documents provided by the petitioner were insufficient to prove compliance with tax requirements.

Dismissal of Appeals:
The petitioner's appeal before the first appellate authority was dismissed due to the failure to deposit 50% of the penalty amount as required. Subsequent appeals to the H.P. Tax Tribunal also failed due to the petitioner's inability to produce necessary documents, resulting in the dismissal of the appeals.

Allegations of Proceedings to Evade Liability:
The petitioner argued that the proceedings were initiated by a respondent who owed them money, alleging that the penalty imposition was unjust. However, the court dismissed this argument, stating that such claims were not raised before the lower authorities and could not be considered at that stage.

Compliance with Procedural Requirements:
The judgment highlighted the procedural aspects under Section 22(6) and (7) of the Act regarding the detention and release of goods without proper documentation. The court found that the authorities had followed the required procedures, including recording statements and releasing goods to the petitioner on certain conditions. The petitioner's failure to produce bills or documents supporting tax payment further weakened their case.

In conclusion, the court dismissed the petition, upholding the penalty imposition and finding no merit in the petitioner's arguments. The decision left the parties to bear their respective costs, emphasizing the importance of compliance with tax laws and procedural requirements in such cases.