2020 (3) TMI 141 - HC - VAT and Sales Tax

Imposition of Advance tax and penalty - detention of vehicle - goods detained were admittedly accompanied by all the required documents as per the provisions of Section 31(2) of the HVAT Act - imposition of penalty just on the basis of statement of the driver, even though the goods are accompanied by genuine documents - the stand taken by the appellant before the Penalising Officer fell flat, firstly for the reason that the appellant never produced the documents with regard to the earlier transaction which were bound to be in possession of the appellant. Secondly the goods were cleared from ICD, Dadri on 9.11.2015 and then sold by the consignor to the consignee on 10.11.2015, there was delay of six days in between the said sale and the date of checking. No explanation was put forth for the said delay. Lastly the stand taken was contradicted by the statement of the driver. HELD THAT - The appellant in order to fortify the stand produced before the Appellate Authority and the Tribunal GR No. 2111 dated 9.11.2015 issued by M/s Nice Cargo Movers, New Delhi. From the GR, it rather established that the stand taken was after-thought. GR No. 2111 dated 9.11.2015 was for the earlier transaction whereas the goods were being accompanied by GR No. 19594 dated 10.11.2015 for the subsequent sale. It shows that the GR produced in appeal was got issued afterwards as for the earlier transaction GR of subsequent serial number was issued - There is another aspect of the matter that in case the appellant had sold the goods to the consignor, there was no occasion for the representative of the appellant and of the consignee to appear in the penalty proceedings and to get the goods released. The affected parties would have been the consignor or the consignee and not the appellant. The case set up by the appellant before the Tribunal is not acceptable. In case it was sale made in transit, there would have been endorsement on the GR. Moreover, the driver in that case would be carrying the documents with regard to movement of goods from ICD, Dadri to Bawal - no interference is called for in the order of the Tribunal. No question of law much less a substantial question of law arises. Appeal dismissed.

Summary

Issues:
1. Imposition of advance tax and penalty under Section 31(8) of the Haryana Value Added Tax Act, 2003.
2. Imposition of penalty based on the statement of the driver despite genuine accompanying documents.
3. Imposition of penalty without a detailed inquiry to establish tax evasion.
4. Consideration of previous sale transactions as 'sale in transit' without legal provision.
5. Requirement of producing previous sale transaction invoices during roadside checking.
6. Allegation of twisting and misinterpretation of the statement for penalty under Section 31(8) of the Act.

Analysis:
1. The appellant challenged the penalty imposed under Section 31(8) of the Act, arguing that it was unjust despite the presence of genuine documents. However, the Court found that the appellant failed to produce crucial documents related to earlier transactions, weakening their case.

2. The appellant's claim that the goods were imported, then transferred and sold on different dates was not substantiated by evidence presented during penalty proceedings. The lack of documentation for these transactions undermined the appellant's defense.

3. The appellant's argument that the goods were sold in transit was refuted due to the absence of necessary endorsements on the documents and the driver's failure to provide supporting paperwork for the alleged movement of goods.

4. The Court noted that the appellant's shifting explanations and contradictory statements, coupled with the delayed sale date after goods clearance, raised doubts about the authenticity of the transactions, justifying the penalty imposition.

5. The Court emphasized that the appellant's failure to provide essential transaction documents at the initial stage and the subsequent submission of documents that contradicted their initial claims weakened their case and justified the penalty upheld by the authorities.

6. Ultimately, the Court concluded that the Tribunal's decision to dismiss the appeals was justified, as no substantial legal questions arose from the case. The appeal was consequently dismissed, affirming the penalty and advance tax imposition under Section 31(8) of the Act.