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TMI Blog2008 (1) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... ISH KUMAR MITTAL AND RAKESH KUMAR GARG , JJ. The judgment of the court was delivered by RAKESH KUMAR GARG J. The assessee has filed the present appeal under section 68 of the Punjab Value Added Tax Act, 2005 against the order of the Tribunal in Appeal No. 59 of 2007-08 (VAT) decided on October 30, 2007 (annexure P9) raising the following substantial questions of law: (i) Whether there is any mens rea on the part of the appellant to evade the payment of tax for which the penalty can be imposed under sections 56 and 60 of the Act? (ii) Whether penalty under section 56 of the 2005 Act can be imposed only where the designated officer records his satisfaction that there is concealment on part of the assessee/dealer and such concealment is with an intention and/or in order to evade or avoid payment of tax? (iii) Whether issuing the show cause notice qua the penalty specified in the notice is required before such penalty can be imposed actually after inspection of records, etc., by the designated officer as envisaged under section 61 of the VAT Act read with rule 50(1)(c) of the VAT Rules 2005? (iv) Whether the notice to show cause under rule 50(1)(c) would require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Designated Officer-cum-Excise and Taxation Officer, Moga that the dealer/assessee had made purchases of bed sheets and blankets, etc., from outside the State of Punjab and after comparing the data of inter-State purchases available in computer system of the department it was found that the dealer has omitted to reflect in returns, purchases worth Rs. 4,85,024. Accordingly, a notice was issued to the dealer on September 13, 2006 for verifying the facts. Sh. Chamkaur Singh, proprietor of the firm appeared on September 14, 2006 and was confronted with the facts of non-showing of ICC data in returns. He requested for an adjournment to reconcile the data and the case was adjourned to September 29, 2006. On September 29, 2006, the assessee was present with his counsel when they were asked to explain reasons for non-showing of inter-State purchases worth Rs. 4,85,024 in their returns/accounts. However, they were unable to explain the same and therefore, it was brought to their notice that their action amounts to suppression of purchases made by the dealer/assessee and the same is liable for imposition of penalty/tax at the prevailing rate. The dealer/assessee who were unable to g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posed upon a person only when the designated officer is satisfied that the concealment of any particulars in any return furnished by any person is with an intention or in order to evade or avoid payment of tax and the mere omission of any particulars in the return ipso facto does not envisage imposition of penalty. Thus, according to him, for imposition of penalty the pre-conditions are that the omission must be in the nature of concealment and further such concealment should be with the intention or in order to evade or avoid of payment of tax. The learned counsel has argued that there is no finding by the assessing officer that the omission of the purchases not being reflected in the quarterly returns is in the nature of concealment and that such concealments are being done with an intention or in order to evade or avoid the payment of tax. He has further argued that in any case the omission of non-reflection of the purchases in the quarterly returns was on account of bona fide omission on the part of the accountant of the appellant-firm, that being the first year of the enactment of the VAT Act in the State of Punjab and further the bona fides are proved from the fact that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nover during the year immediately preceding the commencement of this Act or during any year subsequent thereto, exceeded the taxable quantum, as provided in clause (b) of sub-section (3), shall be liable to pay tax under this Act by way of TOT on the taxable turnover. (3) For the purpose of this section, the expression 'taxable quantum' means (a) for registration as a taxable person for VAT,- (i) in relation to any person, who imports taxable goods for sale or use in manufacturing or processing any goods in the State, rupee one; (ii) in relation to a person, who receives goods on consignment/ branch transfer basis from within or outside the State on which no tax has been paid under this Act, rupee one; (iii) in relation to a person, liable to pay purchase tax under section 19, rupee one; (iv) in relation to a person, who is a manufacturer, rupees one lac; (v) in relation to voluntary registration, rupees five lac; and (vi) in relation to any other person, rupees [fifty lac.] (b) for registration as a registered person for TOT,in relation to a person other than those specified in clause (a), whose turnover during the preceding year is more than r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheduled Bank in favour of the designated officer. (4) If any person referred to in sub-sections (1) and (2), discovers any bona fide error or omission in any return furnished by him, he may rectify such error or omission in the return, due to be filed immediately following the detection of such error or omission. If such rectification results in a higher amount of tax to be due than the original return, it shall be accompanied by a receipt for payment of the additional amount of tax, payable along with the interest at the rate specified under this Act for the period of delay, in the manner prescribed in sub-section (3). No such rectification shall, however, be allowed after the end of the financial year immediately following the year to which the rectification relates or issue of a notice for audit or assessment, whichever is earlier. Where such rectification results in excess amount of tax having been paid than due, such excess tax shall be refundable on application as per provisions of this Act and the Rules framed thereunder. No adjustment shall, however, be allowed for such excess payment. (5) In addition to any return under sub-sections (1) and (2), the Commissioner or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnish particulars of the goods in a specified form obtained from the designated officer, duly filled in and signed. (3) At every check-post or information collection centre or at any other place when so required by an officer referred to in sub-section (2), the driver or any other person-in-charge of the goods vehicle shall stop the vehicle and keep it stationary, as long as may reasonably be necessary, and allow the officer-in-charge of the check-post or the information collection centre or the aforesaid officer to check the contents in the vehicle by breaking open the package or packages, if necessary, and inspect all records relating to the goods carried, which are in the possession of the driver or any other person, as may be required by the aforesaid officer, and if considered necessary, such officer may also search the goods vehicle and the driver or other person-in-charge of the vehicle or of the goods. (4) The owner or person-in-charge of a goods vehicle entering the limits or leaving the limits of the State, shall stop at the nearest check-post or information collection centre, as the case may be, and shall furnish in triplicate a declaration mentioned in sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to break open any package or packages of such goods. (6) (a) If the officer-in-charge of the check-post or information collection centre or any other officer as mentioned in sub-section (2), has reasons to suspect that the goods under transport are meant for trade and are not covered by proper and genuine documents as mentioned in sub-section (2) or sub-section (4), or that the person transporting the goods is attempting to evade payment of tax, he may, for reasons to be recorded in writing and after hearing the person concerned, order detention of the goods along with the vehicle for a period not exceeding seventy-two hours. Such goods shall be released on furnishing of security or executing a bond with sureties in the prescribed form and manner by the consignor or the consignee, if registered under this Act to the satisfaction of the officer on duty and in case the consignor or the consignee is not registered under this Act, then on furnishing of a security in the form of cash or bank guarantee or crossed bank draft, which shall be equal to the amount of penalty leviable rounded up to the nearest hundred. (b) If the owner or the person in-charge of the goods has not submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inds otherwise, he shall order release of the goods for sufficient reasons to be recorded in writing. He may, however, order release of the goods and the vehicle on furnishing of a security by the consignor or the consignee in the form of cash or bank guarantee or crossed bank draft for an amount equal to the amount of penalty imposable and shall decide the matter finally within a period of fourteen days from the commencement of the enquiry proceedings; and (d) The officer-in-charge of a check-post or information collection centre or any other officer referred to in sub-section (2), may receive the amount of cash security as referred to in clause (a) of sub-section (6) and clause (c) of sub-section (7) and the amount of penalty imposed under sub-section (4) and clauses (b) and (c) of sub-section (7) against a proper receipt in the prescribed manner. Explanation. The detained goods and the vehicle shall continue to be so detained beyond the period specified in sub-sections (6) and (7), unless released by the detaining officer or enquiry officer against surety or security as provided for in these sub-sections or the penalty imposed, has been realised or the enquiry officer or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le person or a registered person, shall take delivery of, or transport from any station, airport or any other place, whether of similar nature or otherwise, any consignment of goods, other than personal luggage or goods for personal consumption, the sale or purchase of which, is taxable under this Act, except in accordance with such conditions, as may be prescribed, with a view to ensure that there is no avoidance or evasion of the tax imposed by or under this Act. (12) Where a transporter fails to give information as required under sub-section (2) about the consignor or consignee of the goods, within such time, as may be specified, or transports the goods without documents or with ingenuine documents, he shall be liable to pay, in addition to the penalty leviable under this section, the tax due on such goods at the VAT rate applicable under this Act. (13) The provisions of this Act shall, for the purpose of levy and collection of tax, determination of interest and recovery of tax and interest, apply to the transporter. Explanation. (1) For the purposes of this section, where goods are delivered to a carrier, a goods booking agency or any other bailee for transportation, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be the competent authority officer to impose penalty under this Act. No penalty shall, however, be imposed, unless the person concerned is afforded an opportunity of being heard by serving a notice. It is also useful to refer to the relevant provisions of the Punjab VAT Rules, 2005 hereinafter below: 36. Returns. (1) Every taxable person shall file quarterly selfassessed return in Form VAT-15 within a period of thirty days from the date of expiry of each quarter along with the proof of the payment made into the appropriate Government Treasury and the tax deductions at source (hereinafter referred to as the TDS) certificates, if any: Provided that where a person opts to make the payment of tax through crossed cheque or bank draft, he shall enclose the crossed cheque or the bank draft, as the case may be, along with the return, which shall be filed within a period of twenty days from the date of the expiry of the quarter: Provided further that a person, whose annual gross turnover exceeds rupees one crore in the previous year, shall determine his tax liability for every month and shall pay tax by the 20th day of the month, if paid through the crossed cheque or draft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case may be, shall be in duplicate. The original copy, shall be retained by the designated officer and the duplicate copy shall be returned to the person after acknowledging the same by signing and affixing the official stamp and the receipt number. . . . 40.. Annual statement. (1) In addition to the returns prescribed under sub-rules (1) and (2) of rule 36, every taxable person and registered person, shall file an annual statement in form VAT-20 or form VAT-21, as the case may be, by giving therein the final liability of tax for the year by the 20th day of November in case of a taxable person and by the 20th day of August in case of a registered person. This statement shall be accompanied by the receipt, evidencing the payment of tax less paid, if any, together with due interest thereon, and the details of the goods in stock existing on the 31st day of March of the year to which the statement relates. (2) Every taxable person shall also furnish along with the annual statement, a copy of the trading account, profit and loss account and balance sheet as on the 31st day of March of that year along with statutory declaration in form D and other relevant forms under Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return or annual statement without sufficient cause. It is further clear that under the provisions of section 56 the designated officer/Commissioner has the power to impose penalty if he is satisfied that such person in order to evade or avoid payment of tax has concealed any particulars from any return furnished by him. In the present case, admittedly, the appellant had not reflected the interState purchases of bed sheets and blankets of the value of Rs. 4,85,024 in quarterly returns submitted for the year 2005-06 and this omission on the part of the appellant was found during the course of scrutiny of returns while comparing the data of inter-State purchases available in the computer system of the department. Admittedly, the appellant was issued a show cause notice vide annexure P1 to submit his explanation for the lapse on his part. It is also not disputed that despite the three adjournments, the appellant failed to submit any explanation with regard to the non-reflection of inter-State purchases of bed sheets and blankets in his returns. During these proceedings, it was also brought to the notice of the assessee-appellant that the laps/omission on his part amounts to suppres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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