2023 (11) TMI 1024 - HC - VAT and Sales Tax

Rectification application - Levy of penalty - wrong route adopted by the drivers - if the distance has been wrongly reflected, why it cannot be corrected to absolve the appellant of the penalty imposed upon it vide the impugned order? - HELD THAT - It is not the case of the respondents that the drivers were not carrying the invoices/bills when the vehicles were intercepted by the competent authority. Once the drivers had accepted that there was a mistake in calculating the distance, the very reason for imposing the penalty does not survive. Non reporting of goods before the ICC, Talwandi Sabo cannot be made a ground to impose the aforesaid penalty. It is held that the appellant- assessee is not liable to pay the penalty, as imposed by the respondent- department. Hence, the present appeal is allowed

Summary

Issues Involved:
- Appeal u/s 68 of Punjab Value Added Tax Act, 2005 against the order of Value Added Tax Tribunal, Punjab.
- Imposition of penalty under Section 51 (7) (c) of Punjab Value Added Tax Act, 2005.
- Rectification application filed by appellant-assessee regarding the distance between locations for penalty imposition.

Issue 1: Appeal u/s 68 of Punjab Value Added Tax Act, 2005
The appellant filed an appeal against the order of the Value Added Tax Tribunal, Punjab, which dismissed the appeal filed by the appellant against the order passed by the Deputy Excise and Taxation Commissioner. The case revolved around the interception of vehicles carrying iron goods, lack of proper documents, and subsequent imposition of penalties.

Issue 2: Imposition of penalty under Section 51 (7) (c) of Punjab Value Added Tax Act, 2005
The Tribunal upheld a penalty imposed on the appellant under Section 51 (7) (c) of the Punjab Value Added Tax Act, 2005. The penalty was imposed due to the route taken by the vehicles, with a discrepancy in the distance between locations being a key factor in the penalty imposition.

Issue 3: Rectification application regarding the distance for penalty imposition
After the dismissal of the appeal, the appellant filed a rectification application stating that there was a mistake in the distance between locations, which led to the penalty imposition. The Tribunal dismissed the rectification application, citing that the mistake was not apparent from the records.

In the judgment, the High Court analyzed the evidence and arguments presented. The Court noted that the route taken by the vehicles was crucial in determining the penalty under the tax laws. It was observed that the drivers had not reported the goods at the required Information Collection Centre, leading to suspicions of tax evasion. However, the Court considered the rectification application and the discrepancy in the distance between locations. The Court referred to precedents and held that the mistake in distance calculation could absolve the appellant of the penalty imposed. Therefore, the Court allowed the appeal and set aside the penalty imposed on the appellant.