2016 (5) TMI 733 - HC - VAT and Sales Tax

Imposition of penalty - Detention of goods - Non-issuance of excise invoice in respect of 3910 Kgs of TMT Bar nor any information by way of e-trip as required under Rule 64-B of the Punjab Value Added Tax Rules was furnished - Goods released on furnishing of bank guarantees - Held that - it appeared that the goods carried by the assessee from Mandi Gobindgarh to Jalalabad through the truck were covered by the proper and genuine documents. The confusion was created on account of the fact that these were two consignments and the Designated Officer doubted that the bill issued by the assessee in favour of Vikram Enterprises was fictitious. It was further observed by the Tribunal that the said doubt was just a camouflage in order to pass incorrect order of penalty. The Tribunal on appreciation of material on record had deleted the penalty imposed by Assistant Excise and Taxation Officer. Learned State counsel was not able to demonstrate that the approach of the Tribunal was erroneous or perverse or that the findings recorded were based on misreading or misappreciation of evidence on record. Therefore, the view of the Tribunal is a plausible view and deletion of the aforesaid penalty could not be faulted. - Decided against the revenue

Summary

Issues:
1. Appeal filed by the State of Punjab under Section 68 of the Punjab Value Added Tax Act, 2005 against the order passed by the Chairman, Value Added Tax Tribunal.
2. Sustainability of the order passed by the Ld. VAT Tribunal in the case of tax evasion attempt.
3. Validity of the Ld. Tribunal's decision to allow the appeal when tax evasion is proven.

Analysis:
1. The appeal was filed by the State of Punjab challenging the order passed by the Chairman, Value Added Tax Tribunal, Punjab, under Section 68 of the Punjab Value Added Tax Act, 2005. The issues raised included the sustainability of the Tribunal's order and whether the respondent had attempted to evade tax intentionally. The Tribunal had allowed the appeal and deleted the penalty imposed on the respondent. The State of Punjab contended that the Tribunal's decision was incorrect.

2. The facts of the case involved the interception of a vehicle carrying TMT Bars during a check under Section 51(2) of the Act. The driver produced various documents, but it was alleged that certain requirements under the Act were not fulfilled, leading to the detention of goods and imposition of a penalty. The respondent appealed against the penalty, which was upheld by the Deputy Excise and Taxation Commissioner. Subsequently, the Tribunal allowed the appeal and set aside the penalty, leading to the State's appeal.

3. The High Court, after hearing arguments, found no merit in the State's appeal. The Tribunal had noted that the goods were covered by proper and genuine documents, despite confusion over two consignments. The Tribunal's findings highlighted that the documents produced were sufficient to demonstrate the legitimacy of the transaction. The Tribunal's decision to delete the penalty was upheld as it was based on a plausible view and not erroneous or perverse.

4. Ultimately, the High Court dismissed the State's appeal, stating that no substantial question of law arose from the Tribunal's decision. The Court affirmed the Tribunal's view that the penalty deletion was justified based on the evidence and material on record, indicating that the Tribunal's decision was reasonable and not faulty.

By thoroughly analyzing the issues raised in the appeal, the High Court upheld the Tribunal's decision, emphasizing the importance of proper documentation and legitimate transactions in tax matters.