2020 (8) TMI 450 - HC - VAT and Sales Tax

Levy of penalty u/s 31(8) of Haryana VAT Act - allegation that the driver was not carrying statutory documents though the goods in the present case have been imported from out of country and the Custom Duty has been paid on the same - appellant argued that the penalty imposed was illegal, there could have been no evasion of tax as the goods were imported from Germany and it was accompanied by challan VAT D-3 and bill of entry. HELD THAT - The contentions raised lack merit. The documents produced showed import by NAW, the goods were moving from Tuglabad to Faridabad, as per the handwritten slip and the statements recorded, the goods were to be delivered to the appellant directly. There was no document accompanying the goods for the said transaction i.e. transfer to the appellant. It would be worth mentioning here that the employee of the appellant was accompanying the goods, yet he was not carrying any document for the transaction between NAW and the appellant - The fact that the goods originated from Germany will not be of any help in the present case as there would be no tax involved in the hands of the importer so far as import transaction is concerned but the subsequent transaction would be governed by the provisions of the Act. The stand taken by the appellant that the goods were being sent for job work was not substantiated, as no agreement to the said effect was produced. The challan for transfer of goods was produced after a delay of 14 days, there is no mention of time of removal of goods in the challan and the same has rightly been not found worth reliance. There is another aspect of the matter, inspite of the fact that the goods worth ₹ 30 lacs odd were detained by the authorities, yet the principal/real owner (as per the case of the appellant) neither came forward in the penalty proceedings nor produced evidence which was solely in its possession, to substantiate the stand taken and the averments made. Appeal dismissed.

Summary

Issues:
1. Justification of upholding lower authorities' orders regarding the absence of statutory documents.
2. Whether the absence of Challan could result in an attempt to evade tax.
3. Perversity of the Tribunal's order and contradiction with the documents on record.

Analysis:
1. The appeal under Section 36 of the Haryana Value Added Tax Act, 2003 was filed against the order of the Haryana Tax Tribunal, Chandigarh. The appellant questioned the justification of upholding lower authorities' orders based on the absence of statutory documents. The appellant argued that the driver had not carried statutory documents, even though the goods were imported and customs duty was paid. However, the documents produced indicated that the goods were imported by another entity, and there was no accompanying document for the transaction between the importer and the appellant. The Tribunal found no merit in the appellant's contentions, stating that the subsequent transaction would be governed by the provisions of the Act, irrespective of the goods' origin. The issuance of VAT D-3 by the importer did not automatically disclose the transaction between the importer and the appellant to the tax authorities, leading to the dismissal of the appeal.

2. The second issue revolved around whether the absence of a Challan could imply an attempt to evade tax. The appellant contended that as customs duty was paid on the goods and other statutory documents were carried, the absence of a Challan should not lead to tax evasion allegations. However, the Tribunal found that the appellant failed to substantiate the claim that the goods were sent for job work, as no agreement to that effect was produced. Moreover, the Challan for the transfer of goods was delayed and lacked crucial details, making it unreliable. Despite the significant value of the detained goods, the real owner did not participate in the penalty proceedings or provide evidence to support the appellant's assertions. Consequently, the Tribunal upheld the penalty, emphasizing that no interference was warranted in its order.

3. The third issue pertained to the alleged perversity of the Tribunal's order and its contradiction with the documents on record. The appellant argued that the penalty imposed was illegal, given the circumstances of the case. However, the Tribunal found that the appellant's arguments lacked merit, as the documents and statements indicated a different narrative than what was claimed. The Tribunal highlighted that the appellant failed to provide concrete evidence to support its assertions, leading to the dismissal of the appeal. Ultimately, the Tribunal concluded that no substantial question of law arose from the case, resulting in the dismissal of the appeal.