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TMI Blog2013 (4) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... the first Appellate Authority has stated that she had come along with golden ornaments for market survey, means she is dealing in the business and had got a huge quantity for sale, therefore, she cannot escape the liability of penalty, as has been imposed. - Levy of penalty confirmed. The appellants ordinary place of residence i.e. room in hotel Grand Palace where she had stayed, was inspected, so properly proceedings, in accordance with Section 66 of the VAT Act were initiated and there from it has emerged that the appellant had committed a default as she had not declared carrying of goods at Check posts, one at Lakhanpur and another at Lower Munda, while entering into the State of Jammu & Kashmir. Such kind of default has to be dealt with in accordance Section 69(1)(o) and Section 69(1)(s)(xiii). Additional Commissioner, no doubt, has been authorized so was dealing with the proceedings under Section 66(6) of VAT Act, that falls within the scope of other proceedings. When it is so, the said authority has to be treated as an appropriate authority for the purposes of Section 69(1)(s) of the VAT Act, therefore, Additional Commissioner was competent to impose penalty under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. In nutshell, the background of the case is:- I) Tina Sanjeev Verma (hereinafter referred to as the appellant), admittedly is resident of Ansal Palam Vihar, Gurgaon Haryana, while travelling in aprivate motor car carrying golden ornaments,entered the State of Jammu Kashmir crossing Check Postat Lakhanpur on 15.06.2005. While entering into the Valley of Kashmir, she had also crossed the Check Post at Lower Munda, neither she had been intercepted nor she had declared that she is carrying the golden ornaments. While reaching to Srinagar, she stayed in Hotel Grand Palace Room No.2108. II) Commissioner Commercial Taxes appear to have received an information, about the appellants stay in Room No.2108 of Grand Palace Hotel possessing some unaccounted for goods with intent to evade tax, has vide his order No.Camp/PA/CCT/325 dated 19.06.2005, authorized,under Section 66(3),Shri K. H. Rizvi, Additional Commissioner, to inspect the premises and also to take action under Section 66(6) of the Act, if necessary. The Additional Commissioner on 19.06.2005, on inspection, found the appellant in possession of gold ornaments without any document. The goods were seized, statement of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of penalty, passed by the Additional Commissioner, has been maintained. VI) While dealing with the order passed under Section 69(1)(o) of the VAT Act, it had been contended by the appellant that she was not aware of the tax procedures of the State, where ever she would sell the goods, she would issue proper invoices, the goods were not carried in a public transport, it was her first adventure to explore market outside her native State, she is not an offender, she had unknowingly crossed the Check post, penalty under Section 69(1)(o) of the VAT Act could not be passed by the Additional Commissioner because he was specifically authorized by the Commissioner under Section 66(3) and 66(6) of the Act. VII) The Appellate Authority, while repelling the aforesaid contentions, has opined that the appellant, admittedly, had carried the gold ornaments for market survey. She is supposed to be aware about the sales tax procedure, which are almost similar throughout the Country, especially with the introduction of VAT regime. Her motive was to hoodwink the authorities to evade the tax, therefore, there is no reasonable cause offered for the default in declaring the carrying of goods a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity has opined that the powers of the authorized officers under Section 67(10) of the Act are not restricted to Check post or Notified Area only. It is also opined that subsequently appellant got registered as dealer with effect from 18.7.2005. Finally has concluded that the Additional Commissioner was justified in demanding security under Section 67(10) of the Act. The quantum of penalty imposed under Section 66(6) of the Act, in view of valuation of the goods, proportionately has been reduced from Rs.4,30,459.20 to Rs.3,87,553.56, similarly under Section 69(1)(o) quantum has been reduced from Rs.4,30,459.20 to Rs.3,87,553.56. Likewise, quantum of security demanded under Section 67(1) has been reduced from Rs.53,80,740.00 to Rs.48,44,419.50. 4. (a) Dissatisfied with the appellate order, the appellant filed another appeal under Section 73 of the VAT Act before the State Sales Tax (Appellate) Tribunal (hereinafter referred to as the Tribunal). The Tribunal has maintained the order as passed under Section 66(6) of the Act but has reversed the orders passed under Section 69(1)(o) and 67(10) of the VAT Act. With regard to order passed under Section 69(1)(o) of the Act, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n said categories. The Commissioner (Appellate Authority) has wrongly assumed that the Additional Commissioner is authorized officer as falling within the category as enumerated under sub-section 4 of Section 67. Resort to the provisions of Section 104 of the Act is of no help because under J K Sales Tax Act, notification dated 24.09.2988 has been issued by the Commissioner whereby Deputy Sales Tax Commissioner, Srinagar has been authorised to exercise power under sub-section (3) of Section 15-A of the Act in respect of Kashmir Division.In the instant case, power has been exercised by Additional Commissioner, he was not an authorized officer, therefore, demanding of security from the appellant has been held illegal, said order was also found to be unjustified and without jurisdiction, as such, set aside. (c) Finally, appeal No.1/VAT/Trib/Sgr of the appellant has been dismissed where as other two appeals arising out of orders passed under Section 69(1)(o) and 67(10) have been allowed and orders set aside. 5. The appellant Tina Sanjeev Verma filed an application under Section 75 of the VAT Act contending therein that Section 66(6) of the Act would not apply to her case because:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y substance. Section 66(6) of the VAT Act is self-explanatory.Section 66(3) and 66(6), for the facility of reference, is reproduced here under:- 66.Production and inspection of accounts and documents and search of premises. (1).......... (2).......... (3) If the Commissioner has reasons to believe that any dealer is attempting to evade payment of any tax under the Act, and that anything necessary for purposes of investigation into his liability may be found in any accounts, registers or documents he may for reasons to be recorded in writing, by a written order, authorize any officer not below the rank of Inspector of the Commercial Taxes Department to seize such accounts, registers or documents as may be necessary. Upon such seizure an inventory of such account books, registers and other documents seized shall be prepared and a copy thereof shall befurnished to the dealer before their removal from the place where they are seized. He shall retain the same only for so long, as may be necessary for examination thereof and for prosecution. (4).......... (5).......... (6)If the Commissioner or any officer not below the rank of Assessing Authority authorized under sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (3) of Section 66 of the VAT Act and in case need arises, then to take action under sub-section (6) of Section 66 of the VAT Act. 9. Stringent provisionsas incorporated in the Statute books so as to ensure that the party/dealer shows transparency to the satisfaction of the authorities that tax leviable shall not, in any way, be evaded, have to be adhered to strictly so that contravention may not get chance of encouragement or may not have implication of sending a signal that the stringent provisions only remain on the statute book and are never meant for implementation. 10. (I) The imposition of penalty has to be the way it is prescribed. The penalty as prescribed in sub-section (6) of Section 66 of the VAT Act has to be equal to double the amount of tax payable on such goods. The Additional Commissioner (Authorized officer) has imposed the penalty of Rs.4,30,459.20/ which has been worked out on the basis of tax leviable on the value of goods but before the first Appellate Authority (Commissioner Commercial Taxes), the goods were got evaluated and found to be of the value of Rs.1,93,77,678.00 as against the valuation worked out by the authorized officer amounting to Rs.2, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sked to furnish the security for an amount equal to double the amount of tax leviable. The said power has to be exercised by the officer incharge of the Special Investigation Unit or notified area or check post or any officer authorized under sub-section (4). In the present case goods have been transported but neither appellant has declared carrying of goods at the check posts nor she seem to have been intercepted, so has succeeded in carrying the goods to Srinagar where she stayed in a hotel room. 13. The question is as to whether Additional Commissioner had jurisdiction to pass order under Section 67(10) of the VACT Act. The answer has to be no because Section 67 will operate when the person carrying the goods declares that he is in possession of such goods and shows some invoices or other documents or if he does not declare so, the officer incharge, as mentioned in sub-section (10), if found that taxable goods are transported, shall have power to ask the concerned to furnish the security. Once the person, without any interception or without declaring carrying of goods, has reached to the destination, Section 67 will not apply, then it can be a case of default. The view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, as has been noticed by the learned Tribunal. 16. The Appellate Authority (Commissioner, Commercial Taxes), while referring to Section 17(1)(o) of the J K GST Act, 1962 read with Section 104 of the VAT Act, has opined that appropriate authority under Section 17(1)(o) of the J K GST Act has been defined as Assessing Authority having jurisdiction over a case to make assessment or any other authority seized with the jurisdiction in respect of other proceedings. In short, it has been contended that since Additional Commissioner was seized with the jurisdiction in respect of other proceedings, i.e. proceedings under Section 66 of the VAT Actas such, he was an appropriate authority. Section 104 of the VAT Act enumerates transitional provisions. Section 104(2)(c) is relevant to be quoted any order or notification issued by the Commissioner for delegating any power or conferring any jurisdiction under the Jammu and Kashmir General Sales Tax Act, 1962 or the rules made thereunder to any person appointed by any designation, under sub-section (2) of Section 3 of the said Act before the appointed day shall, with effect from such appointed day, continue to be in force until the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner or ceases to be the person appointed to assist the Commissioner. 19. The wording employed would show that any person appointed to assist the Commissioner under the J K GST Act, 1962, shall be deemed to have been appointed under the Act and shall continue in office as such till such person ceases to be Commissioner or ceases to be the person appointed to assist the Commissioner. Section 17(1)(o) of the J K GST Act assumes greater importance because under the said Act appropriate authority has been defined to mean the Assessing Authority having jurisdiction over the case to make assessment or any other authority seized with the jurisdiction in respect of other proceedings. In the instant case Additional Commissioner, no doubt, has been authorized so was dealing with the proceedings under Section 66(6) of VAT Act, that falls within the scope of other proceedings. When it is so, the said authority has to be treated as an appropriate authority for the purposes of Section 69(1)(s) of the VAT Act, therefore, Additional Commissioner was competent to impose penalty under Section 69(1)(o) read with Section 69(1)(s)(xiii). Tribunal has not appreciated this aspect,so view taken by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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