9911796707
TMI Blog2010 (2) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods were liable to be taxed at the rate of four per cent, while the assessee has taxed it at the rate of two per cent. It was claimed by the assessee that under similar circumstances, vide order dated March 5, 2001 (annexure A3), the tax was charged at the rate of two per cent, but in the instant case, the penalty was wrongly imposed by the Assistant Excise and Taxation Commissioner, vide order dated April 28, 2006 (annexure A4). According to the Department, as the consignor/dealer has charged CST at the rate of two per cent, instead of four per cent, therefore, taking it to be a case of not covered by proper and genuine documents, a show-cause notice was issued to the assessee. In the wake of notice, the assessee tried to explain that in view of prevailing rate at the relevant time, only two per cent tax was chargeable on the iron and steel. The explanation put forth by the assessee did not find favour and the Assistant Excise and Taxation Commissioner, ICC (Export), Shambhu imposed a penalty of Rs. 2,88,612 under section 51(7)(b) of the Punjab Value Added Tax Act, 2005 (for short, "the Act"), vide impugned order (annexure A4). Aggrieved by the aforesaid impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Jalandhar City v. State of Punjab [2010] 30 VST 235 (P&H), judgment dated February 10, 2010 passed in case V.A.T.A.P. No. 18 of 2008 titled as "N.S.S. Enterprises, Shivani Market, Near General Bus Stand, Pathankot v. State of Punjab [2010] 30 VST 244 (P&H) and judgment of the Allahabad High Court in the case of Parry and Company Ltd. v. Commissioner of Sales Tax, U.P., Lucknow [2004] 138 STC 437. Supporting the impugned order, on the contrary, the learned counsel for the State has argued that four per cent Central sales tax was leviable on the goods, but since the assessee had taxed it at the rate of two per cent, the penalty clause was rightly invoked by the authority under section 51 of the Act and no interference is warranted in this regard. Above being the position, the facts of this case are neither intricate nor much disputed. Now the short question that arises for determination in this case is whether, on the facts and circumstances of the case, penalty can be imposed on the assessee, in view of bona fide difference of opinion on the application of rate of tax. It is not a matter of dispute that Chapter IX of the Act deals with the power of Information Collection Centre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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." A conjoint reading of these provisions would reveal that the designated officer is under legal obligation to conduct an enquiry after serving a notice on the consignor or consignee and give him an opportunity of being heard. If after the enquiry, such officer finds that there has been an attempt to avoid or evade the tax due or likely to be due under this Act, he shall, by order, impose on the consignor or consignee of the goods, a penalty, which shall be equal to thirty per cent of the value of the goods and in case he finds otherwise, he shall order the release of the goods and the vehicle, if not already released, after recording reasons in writing and shall decide the matter finally within a period of fourteen days from the commencement of the enquiry proceedings. If after the enquiry, such officer is satisfied that the documents as required under sub-sections (2) and (4), were not furnished at the information collection centre or the check-post, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required for checking attempt at evasion nor can be extended to areas where there was no attempt at evasion. Where relevant documents are duly produced but a bona fide plea against taxability is raised and there is neither mis-declaration nor concealment, exercise of power of imposing penalty at the check-post on the ground of attempt at evasion may not be called for. In the case of the petitioner, contention raised by him that the cast iron castings carried by it were not 'cast iron' liable to tax at the first stage, could not be held to be requiring no adjudication or frivolous or mala fide. It is not relevant as to what is the interpretation finally taken on this subject. The petitioner having not concealed any information, and having placed reliance on the judgments of the Supreme Court (Bengal Iron Corporation v. Commercial Tax Officer [1993] 90 STC 47 and Vasantham Foundry v. Union of India [1995] 99 STC 87 (SC)), the matter did require serious consideration, and adjudication by the check-post officer was not called for. In such a situation invocation of jurisdiction for imposing penalty on the allegation of attempt at evasion was not permissible." The same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offender is not liable to act in the manner prescribed by the statute". Thus, seen from any angle, we are of the considered opinion that in the absence of any cogent material and specific finding that there has been an attempt to avoid or evade the tax due or likely to be due, no penalty can be imposed on the assessee as contemplated under section 51(7) of the Act, particularly when the assessee has bona fide difference of opinion on the application of rate of tax on the goods falling within the category of iron and steel. The contrary argument on behalf of the Department "stricto sensu" deserves to be and are hereby repelled, as the aforesaid judgments are the complete answer to the problem in hand, in the obtaining circumstances of the case. In the light of the aforesaid reasons, it is held that the authorities below committed a legal error by imposing the penalty on the assessee despite the fact that the goods were voluntarily reported at ICC, especially when it (assessee) has bona fide difference of opinion on the application of rate of tax on goods, falling within the category of "iron and steel". Thus, the substantial questions of law as framed by this court are, according ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
