2025 (1) TMI 1435 - HC - VAT / Sales Tax

Levy of penalty - evasion of tax under the Punjab VAT Act by not submitting the bills at ICC despite the fact that the details of bills are duly mentioned in the Statutory Form of Rajasthan (VAT 47) and was produced at the time of generation of information for other transactions - jurisdiction to check and detain the vehicles at the ICC premises - HELD THAT - The undisputed fact is that the goods i.e. iron goods being transported in two vehicles were detained by the Excise and Taxation Officer (MW) Bathinda for verification on the grounds that the goods in transit were in excess by weight as was detected after weighment and requisite information in respect of excess goods was not furnished at any ICC. After issuance of show cause notice Shri Neeraj Kumar Manager of the firm M/s Shree Shiva Steels Mandi Gobindgarh appeared before the Detaining Officer who claimed himself to be the owner of the excess goods loaded in both the vehicles. A perusal of the record further shows that the drivers of both the trucks did not produce any document in respect of excess goods and categorically stated that they have no other document relating to the goods in question. The explanation given by owner of the goods that since the TIN of the consignor firm was blocked therefore the drivers could not generate the information in respect of excess goods cannot be believed since perusal of the record shows that GR No.980 and 981 alongwith retail invoices No.39 and 40 dated 19.08.2009 were produced by Sh. Neeraj Kumar stated to be Manager of the appellant-firm after the show cause notice was issued to the owner of the goods. Further these documents should have been with the drivers at the time of furnishing information at ICC as per the requirement of Section 51 (2) of the Act as referred to above. This proves the intention of the appellant to evade tax. A perusal of the record shows that the Ld. AETC (MW) Bathinda after conducting proper inquiry and after giving full opportunity of being heard to the appellant has passed the penalty order under Section 51 (7) (c) of the Act. There are no infirmity in the order dated 30.07.2010 passed by the Ld. VAT Tribunal Punjab Chandigarh the same is upheld - appeal dismissed.

Summary

ISSUES PRESENTED and CONSIDERED

The appeal raised several legal questions under the Punjab Value Added Tax Act, 2005:

(i) Whether the VAT Tribunal was justified in upholding the penalty imposed by the AETC?

(ii) Whether the appellant attempted to evade tax by not submitting bills at the Information Collection Centre (ICC), despite having details in the Statutory Form of Rajasthan (VAT 47)?

(iii) Whether the Excise and Taxation Officer (ETO) (Mobile Wing) had jurisdiction to check and detain vehicles at the ICC premises?

(iv) Whether the ETO (Mobile Wing) could check and detain vehicles when they were already at the ICC premises, and ICC staff could have corrected any document defects?

ISSUE-WISE DETAILED ANALYSIS

Issue (i): Justification of Penalty Imposition

- Legal Framework and Precedents: The relevant provision is Section 51(7)(c) of the Punjab VAT Act, 2005, which allows for penalties when there is an attempt to evade tax.

- Court's Interpretation and Reasoning: The Court noted that the statutory requirement under Section 51(2) mandates carrying and producing specific documents at check posts or ICCs. The appellant failed to comply, indicating an intention to evade tax.

- Key Evidence and Findings: The goods were in excess by weight, and the necessary documents were not presented at the ICC. The appellant's explanation about the blocked TIN was not supported by evidence, and documents were produced only after a show-cause notice.

- Application of Law to Facts: The Court found that the appellant's failure to present documents at the ICC was a deliberate act to evade tax, justifying the penalty.

- Conclusions: The Tribunal's decision to uphold the penalty was justified as per the requirements of the VAT Act.

Issue (ii): Attempt to Evade Tax

- Legal Framework and Precedents: Section 51(2) and (4) of the Act require the declaration and presentation of documents at ICCs.

- Court's Interpretation and Reasoning: The Court emphasized the mandatory nature of these provisions to prevent tax evasion. The appellant's failure to comply indicated an intention to evade tax.

- Key Evidence and Findings: The appellant's claim of blocked TIN preventing document generation was unsubstantiated. The documents produced after the fact were deemed an afterthought.

- Application of Law to Facts: The absence of required documents at the ICC at the time of inspection supported the finding of an attempt to evade tax.

- Conclusions: The appellant's actions were consistent with an attempt to evade tax, supporting the penalty.

Issue (iii) & (iv): Jurisdiction and Authority of ETO (Mobile Wing)

- Legal Framework and Precedents: Section 51 of the Act provides authority to officers, including the ETO (Mobile Wing), to inspect and detain goods and vehicles for tax compliance.

- Court's Interpretation and Reasoning: The Court found that the ETO (Mobile Wing) had jurisdiction to inspect and detain vehicles at ICC premises, as the statutory provisions did not limit the authority to ICC staff alone.

- Key Evidence and Findings: The ETO's actions were within the scope of authority provided under the Act, and the detention was justified by the lack of proper documentation.

- Application of Law to Facts: The ETO's jurisdiction to act at the ICC premises was supported by the statutory framework, and the detention was appropriate given the circumstances.

- Conclusions: The ETO (Mobile Wing) acted within legal authority, and the detention of goods and vehicles was valid.

SIGNIFICANT HOLDINGS

- Core Principles Established: The Court reinforced the mandatory nature of document presentation at ICCs to prevent tax evasion. It upheld the authority of ETOs to act within ICC premises.

- Final Determinations on Each Issue: The penalty imposed by the AETC was upheld, as the appellant's failure to comply with statutory requirements indicated an attempt to evade tax. The ETO (Mobile Wing) had jurisdiction to inspect and detain goods at ICC premises.

- Verbatim Quotes: The Court stated, "The production of documents by Sh. Neeraj Kumar, Manager of the firm-M/s Shree Shiva Steels, Mandi Gobindgarh after issuance of show cause notice is an afterthought," highlighting the appellant's attempt to justify non-compliance post-factum.

The appeal was dismissed, affirming the penalty and the jurisdiction of the ETO (Mobile Wing) under the Punjab VAT Act, 2005. All pending applications were also disposed of.