2024 (8) TMI 905 - HC - VAT and Sales Tax

Levy of penalty u/s 51 (7) (b) of the Punjab VAT Act - Non-disclosure of necessary information in consignment - appellant submits that the Tribunal has failed to take note of the fact that the appellant himself had surrendered at the barriers - HELD THAT - This Court while examining the similar case titled as M/S. PUNJAB WOOL SYNDICATE VERSUS THE STATE OF PUNJAB AND ANOTHER 2023 (2) TMI 96 - PUNJAB AND HARYANA HIGH COURT noted that the invoices reflected the inter-state sale. In the present case also, the sales were inter- State but the driver did not possess the Goods Receipt (GR) and no explanation for the same has been mentioned. In the present case, 1000 pieces of LPG valves at the rate of Rs. 1500/- per piece valuing Rs.15 lacs were being sent. As per Section 51 (2) of the Punjab VAT Act, the driver Incharge of the vehicle has to carry invoice and GR which were admittedly not available with him, nor any tax has been charged. In the circumstances, judgment passed in M/s Punjab Wool Syndicate s case has no application in the present case as in that case, this Court had found that the driver had produced the invoices and the Court observed that once, he had produced the invoices, he is not expected to give further details relating to the invoices - In the present case as noticed above, the facts are altogether different. In the absence of GR, the authorities have taken a correct course of action and the Tribunal has rightly rejected the appeal of the appellant. There are no reason to interfere with the order passed by the VAT Tribunal as no substantial question of law arises for consideration - the present VAT appeal stands dismissed.

Summary

Issues:
Appeal against order of Value Added Tax Tribunal - Imposition of penalty under Punjab VAT Act - Non-disclosure of necessary information in consignment - Compliance with provisions of Punjab VAT Act - Inter-state sale without proper documentation - Admissibility of appeal based on substantial question of law.

Analysis:
The judgment pertains to a VAT appeal challenging the order of the Value Added Tax Tribunal, Punjab, where the appellant, a registered dealer engaged in trading LPG Valves, was penalized under section 51(7)(b) of the Punjab VAT Act for non-disclosure of essential consignment details. The appellant notified the Assessing Authority about sending goods on consignment, invoiced at Rs. 15,00,000, accompanied by Form VAT-47 from Rajasthan to Punjab. However, the goods were detained for document verification, leading to the imposition of a penalty. The appellant contended that surrendering at barriers should negate non-disclosure, but the State argued that crucial information like destination station, GR with the driver, and tax details were missing, justifying the penalty.

The Tribunal's observations highlighted the incomplete documentation and casual treatment of the transaction, indicating a potential tax evasion intention by the consignor. The Court emphasized the necessity of complying with Punjab VAT Act provisions, especially regarding inter-state sales, where proper documentation like GR and tax details are mandatory. Drawing parallels with a previous case, the Court noted the absence of GR and tax charging in the present case, distinguishing it from the precedent where invoices were produced. Consequently, the Court upheld the Tribunal's decision, emphasizing the correct course of action taken by the authorities due to the lack of essential documentation.

In the absence of a substantial question of law warranting interference, the Court dismissed the VAT appeal, affirming the Tribunal's decision. The judgment underscores the importance of adherence to statutory requirements in inter-state transactions to prevent tax evasion and ensure compliance with VAT regulations. The ruling serves as a reminder for dealers to maintain meticulous documentation and transparency in dealings to avoid penalties and legal repercussions.