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TMI Blog2015 (8) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... when section 30AA under which surcharge was imposed was omitted with effect from December 7, 2002 and there was no specific provision left for the imposition of surcharge upon the exemption holders? (ii) On the facts and circumstances of the case, whether sales made by an exempted unit were deductible from gross turnover to determine taxable turnover liable to surcharge? (iii) In the facts and circumstances of the case, whether sales of three wheelers amounting to Rs. 6,90,181 could be subjected to surcharge despite prohibition contained in second proviso, when no surcharge was levied on such sales made during 2004-05, for sheer non-mention of the name of the commodity on which higher rate of tax, i.e., 12 per cent was assessed? (iv) In the facts and circumstances of the case, whether penalty imposed under section 23 of the Punjab General Sales Tax Act, 1948 could be sustained on bald narration that an opportunity of hearing was granted when neither show-cause notice was served upon the assessee nor opportunity of hearing was given as per order sheet containing the proceedings of the case?" 2. A few facts relevant for the decision of the controversy invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has to be exempted within the exemption entitlement. The surcharge is leviable on tax payable and this shall also be added to the amount of tax for which exemption entitlement is there since section 30AAof the PGST Act added on November 7, 2001 had been omitted with effect from December 7, 2002. The Tribunal sustained imposition of surcharge in respect of sales of three wheelers amounting to Rs. 6,90,181 and iron scrap valuing Rs. 91,251 and penalty of Rs. 5,000 imposed under section 23 of the PGST Act. Hence the present appeal by the assessee. 3. We have heard learned counsel for the parties and perused the record. 4. Learned counsel for the appellant submitted that the goods produced by the appellant being exempt from payment of sales tax for a period of 10 years, no surcharge could be levied which would reduce the exemption entitlement of the assessee. According to the learned counsel, in view of rule 4A of the 1991 Rules, surcharge is on taxable turnover and not on the gross turnover. Reference was made to section 5(2) of the PGST Act which defines "taxable turnover". Reference was also made to rule 29 of the Punjab General Sales Tax Rules, 1949 (in short, "the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 of that Act:- Provided further that no surcharge shall be levied on any type of motor vehicles including their chassis and bodies, motor cycles, motor cycle combinations, motor scooters, mopeds, two wheelers, three wheelers and other roadworthy contraptions excluding tractors and harvest combines." (ii) Section 5(2) defines "taxable turnover" to mean:- "5(2). In this Act the expression, 'taxable turnover' means that part of a dealer's gross turnover during any period which remain after detecting therefrom:- (a) his turnover during that period on:- (i) the sales of goods declared tax-free under section 6; (ii) sales to a registered dealer of goods other than sales of goods liable to tax at the first stage under sub-section (1A), declared by him in a prescribed form as being intended for resale in the State of Punjab or sale in the course of inter-State trade or commerce or sale in the course of export of goods out of territory of India, or of goods specified in his certificate of registration for use by him in the manufacture in Punjab or any goods, other than goods declared tax-free under section 6, for sale in Punjab, or sale in the course of inter-State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s may be prescribed:- Provided that in the case of industries which came into production for the first time on or after the first day of April 1989, or wherein modernization, expansion or diversification has been carried out in accordance with the Industrial Policy, 1989, the Government may exempt such industries from the payment of tax with effect from the 1st day of April 1989, subject to such conditions as may be prescribed:- Provided further that in the case of industries which came into production for the first time after the 24th day of June, 1991, or wherein expansion, modernization or diversification has been carried out in accordance with the Electronics Policy, 1991, the Government may exempt such industries from the payment of tax with effect from the 24th day of June, 1991, subject to such conditions, as may be prescribed. Explanation:-For the purpose of this section:- (i) the Industrial Policy, 1989 shall mean the Industrial Policy of 1989, notified by the Government of Punjab in the Department of Industries, as amended from time to time; (ii) the Electronics Policy, 1991, shall mean the Electronics Policy of 1991 notified by the Government of Punjab in the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover enumerated thereunder while calculating his taxable turnover. It nowhere refers to levy or exemption of payment of surcharge on taxable turnover. 9. A combined reading of the aforesaid clearly spells out that for purposes of determining the "taxable turnover", deductions as admissible under section 5(2) of the PGST Act and rule 29 of the 1949 Rules are to be allowed. Section 5(1C) of the PGST Act deals with levy of surcharge whereas section 30A of the Act provides for framing of rules for deferment and exemption. It may be noticed that during the period from November 7, 2001 to December 7, 2002, surcharge was separately payable inspire of exemption entitlement in view of section 30AA in the PGST Act before its omission. In the absence of any specific provision in the PGST Act or the Rules framed thereunder or under the 1991 Rules which confers any right on the assessee whereby surcharge on the taxable turnover would not be reduced from its exemption limit in case of exempted unit, the assessee is not entitled to claim such benefit. Accordingly, it is held that the tax and surcharge payable every year on the taxable turnover would form part of its exemption entitleme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be accepted." 12. The Tribunal had noticed that the assessee had failed to file any list to show that there was sale of three-wheelers and therefore by virtue of second proviso to section 5(1C) of the PGST Act, no such surcharge was leviable. A perusal of the assessment order and the order passed by the DETC (Appeals) also shows that there was no material to show that the finding recorded by the Tribunal was perverse or erroneous. 13. Taking up the last question regarding levy of penalty, section 23 of the PGST Act confers power on the appropriate authority to impose penalty for contravention or failure to comply with the provisions thereof or the rules made thereunder. It is to the following effect:- "23. Penalty:- (1) Whosoever contravenes, or fails to comply with any of the provisions of this Act or the Rules made thereunder or any order or direction made or given thereunder, shall, if no other penalty is provided under this Act for such contravention or failure, be liable to imposition of a penalty, not exceeding two thousand rupees and where such contravention or failure is a continuing one to a daily penalty not exceeding fifty rupees during the period of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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