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2023 (5) TMI 325 - HC - VAT and Sales TaxLevy of penalty u/s 51(7)(b) of the Punjab VAT Act - evasion of tax or not - Designated Officer was of the view that the documents were not genuine and there had been an attempt to evade tax - HELD THAT - In the impugned order as well, it has been observed that the goods were being brought into Punjab by M/s Mundawala Enterprises of Abohar and goods were meant for trade. Merely on the ground that the information with respect to goods carried in the vehicle has not been given before the Officer Incharge of the check post or ICC, the impugned order could not have been passed. This issue has already been considered by this Court in Shree Ram Panel s case 2011 (8) TMI 1027 - PUNJAB AND HARYANA HIGH COURT where it was held that mere non-reporting at the ICC. Banur and not making declaration in the prescribed form could not lead to conclusion that there was violation of Section 51(4) of the Punjab Value Added Tax Act with a view to do an attempt to evade tax. In the present case, except for giving information to ICC, all other documents shows that the appellant was not attempting to evade tax. Penalty set aside - petition allowed.
Issues Involved:
The appeal under Section 68 of the Punjab Value Added Tax Act, 2005 seeking to set aside an order involving penalty imposed for alleged tax evasion in an inter-state sale transaction. Details of the Judgment: 1. Facts of the Case: The appellant, a registered dealer under Rajasthan VAT Act and Central Sales Tax Act, engaged in trading of gram and made inter-state sale with a consignee in Punjab. The goods were to be unloaded at godowns leased by the consignee in Punjab. 2. Detention and Penalty Imposed: The goods were detained by the Excise and Taxation Officer as the consignee was different from the unloading location. A penalty of Rs. 11,57,404 was imposed for alleged tax evasion under Section 51(7)(b) of the Punjab VAT Act. 3. Grounds of Appeal: The appellant challenged the penalty on the grounds that the consignee's choice of godowns was not an attempt to evade tax, and non-reporting at the check post was not conclusive proof of tax evasion. 4. Legal Precedents Cited: Reference was made to legal cases highlighting that mere non-declaration at the check post does not necessarily indicate tax evasion, especially when genuine documents are produced. 5. Court's Analysis: The Court examined the documents and found that the appellant had complied with necessary formalities for the inter-state sale. The absence of reporting at the check post alone was not sufficient to establish tax evasion. 6. Decision: The Court allowed the writ petition, setting aside the order imposing penalty, emphasizing that the appellant had not attempted to evade tax based on the available evidence and compliance with legal requirements. 7. Key Legal Points: The judgment emphasized the importance of examining all relevant documents and circumstances before concluding tax evasion, especially in cases of inter-state transactions. 8. Judicial Precedents: The Court relied on previous judgments to support the argument that non-reporting at the check post does not automatically imply tax evasion, especially when genuine documents accompany the goods. 9. Conclusion: The Court's decision highlights the need for a thorough examination of all aspects of a case before penalizing for alleged tax evasion, especially in inter-state sale transactions where compliance with legal requirements is crucial.
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