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TMI Blog2023 (1) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... imes of the tax payable and if no tax is payable the maximum penalty is Rs. 5000/-. The contention of the Revenue counsel that there can be a scenario that 3 times of tax will be less than Rs. 5000/-; and in such circumstances, the legislature has used the words penalty equal to the amount of three times of the tax, leviable on such goods, or rupees five thousand whichever is greater, is not acceptable. Reference in this regard may also be given to the case of Krishi Utpadan Mandi Samiti v. Pilibhit Pantnagar Beej Ltd. [ 2003 (11) TMI 591 - SUPREME COURT ] wherein the Hon ble Apex Court has held that if there is any ambiguity with regard to interpretation of the statute the view which is favorable to the assessee shall be taken into consideration So far as other questions/issues raised by the counsel of the petitioner with regard to giving adequate opportunity of the petitioner-company and also inadequate notice issued under JVAT Act, 2002, it is deemed proper not to give any finding on that for the sole reason that the petitioner after passing of the assessment order has availed alternative remedy of appeal and revision and had enough opportunity to canvass his case, as such no pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . P. (T) 2552 of 2019) is that the Petitioner is engaged in the business of selling batteries in the State of Jharkhand. One of the manufacturing units of the Petitioner is located in Krishnagiri, Tamil Nadu. The Petitioner for its business of selling batteries gets the batteries from its manufacturing plant located in Krishnagiri, Tamil Nadu to the State of Jharkhand. The Petitioner was getting its batteries transported from Krishnagiri, Tamil Nadu to Ranchi, Jharkhand, on stock transfer basis through truck/ vehicle. While the said goods (batteries) were being transported from the manufacturing unit of the Petitioner located in Krishnagiri, Tamil Nadu to Ranchi, Jharkhand on stock transfer basis, the said vehicle was inspected by the officers of the Respondents at Bahragora Check Post on 18. 08. 2015. The driver of the said vehicle produced two invoices along with transportation bills and also the Sugam-G/ JVAT Form 504G, being the Road Permit, to the concerned Officer of the Respondents, at the said Check Post. The two invoices produced by the driver were Invoice no. 1217081556 dated 13. 08. 15 of value of Rs. 62,800/-; and Invoice No. 1217081557 dated 13. 08. 15 of value of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espective of the fact that the transaction is a stock transfer, the word 'value of goods' has been used. Further reliance is placed on the judgments in Mukerian Papers Ltd v. State of Punjab, (1991) 2 SCC 580, Para -7, and Purulia and Kharagpur Transmission Company Ltd v. State of Jharkhand, W. P. (T) No. 3560/2017 dated 08. 01. 2020, Paras-5 & 10. Reliance has also been placed on the judgment of the Hon'ble Apex Court passed in the case of Krishi Utpadan Mandi Samiti v. Pilibhit Pantnagar Beej Ltd., (2004) 1 SCC 391 that a penal statute has to be construed strictly and in case of any ambiguity, the same has to be construed in the favour of the assessee. On similar grounds reliance has also been placed on the judgment of the Hon'ble Apex Court passed in CIT v. T. V. Sundram Iyengar (P) Ltd., (1976) 1 SCC 77 wherein it has been held that penal statutes have to be construed strictly in the sense that if there is a reasonable interpretation which will avoid the penalty, that interpretation ought to be adopted. (ii) No notice under form JVAT 302 was issued. Admittedly, the notice issued to the Petitioner was not in Form JVAT 302. Reliance is placed on the judgments in Metal F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n submissions. (ii) The petitioner in the present writ petition is raising the question of violation of principles of natural justice. The petitioner has availed the alternative remedy of appeal and revision. The petitioner had the opportunity to raise all the points / issues before the appellate authority and the Tribunal. The appellate authority and the tribunal have considered the case of the petitioner and decided by a well reasoned/considered order. Thus, the issue of violation of principles of natural justice is not available to the petitioner in the present writ petitions. (iii) The concern in the present case is that the goods in movement were being carried without supported declaration form in the prescribed manner as envisaged u/s 72(3)(a), 72 (5) of JVAT Act 2005 and the prescribed manner of declarations forms and the requirement of permit being stipulated under the particular rule 42 (2) of the JVAT Rules 2006. The JVAT rules 2006 have been framed in exercise of the powers conferred by section 94 of the JVAT Act 2005. The rule 42 (2) of JVAT Act 2006 prescribes the declaration form, as referred in Section 72 (3) (a) of the JVAT Act 2005. In view of the specific prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice given by the respondent is in conformity with Rule 59 of the JVAT Rules 2006; (iii) Whether adequate opportunity of hearing was given, inasmuch as, Rule 59 provides for 30 days' time whereas time of only three days was given to the petitioner's driver which is evident from the record? (iv) Whether, if by mistake some documents are not available at the time of checking, principles of natural justice may require some opportunity to be given to produce the same. 12. The penalty has been levied U/S 72(6) of the JVAT ACT, 2005. The relevant portion of the said Section is being quoted herein below for ready reference: "Section 72 (6) The officer in-charge of the check post or the officer empowered under sub-section (4), after having given the person in charge of the goods a reasonable opportunity of being heard and after having held such inquiry as he may deem fit, shall impose for possession or movement of goods, whether seized or not, in violation of the provisions of Clause (a) of sub-section (3) or for submission of false or forged documents or prescribed form, a penalty equal to the amount of three times of the tax, leviable on such goods, or rupees five thousand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Court in Mukerian Papers Ltd. Vs. State of Punjab, reported in (1991) 2 SCC 580, laying down the law that once there was no tax liability, there could be no question of penalty or interest on the unpaid amount of tax. 10. The original order dated 29. 1. 2016, imposing penalty, shows that under Section 40(2) of the JVAT Act, the penalty equal to three times the amount of tax payable was imposed. In view of the fact that the tax liability has now been found to be 'Nil', we find that no penalty could be imposed upon the petitioner company for the simple reason that 'Nil' multiplied by three, shall also be 'Nil' only. We are also fortified by the decision of the Hon'ble Apex Court in Mukerian Papers Ltd. 's case (supra), laying down the law that once there was no tax liability, there could be no question of penalty or interest on the unpaid amount of tax. " 14. By going through the aforesaid judgment, it appears that the quantum of penalty provided u/s 72 (6) of JVAT Act, 2006 is penalty equal to the amount of 3 times of the tax leviable on such goods or rupees five thousand whichever is greater. Accordingly, in order to determine the quantum of pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same, the penalty amount has been erroneously calculated in the penalty order as three times of the sales tax leviable; and the same is therefore unsustainable. 15. Learned counsel for the respondent-State has heavily relied upon the judgment passed in the case of Guljag Industries versus CTO reported in (2007) 7 SCC 269 in order to support the penalty order. In this regard the following observation will show that the judgment passed by the Hon'ble Apex Court in the case of Guljag Industries is distinguishable. In Guljag Industries, the road permit form being Form ST 18-A, was signed by the consignee, but however the form was left blank. (para 4 of the judgment. This is further substantiated by finding of the Supreme Court in Paragraph-26-"if the declaration Form St. 18-A/18-C does not support the goods in movement because it is left blank then in that even Section 78(5) provides for imposition of monetary penalty…. . " Again, in paragraph 28, the Supreme Court has reiterated that "These forms were duly signed, however, material particulars were not filled in" and further in paragraph 29 that "it is Section 78(2)(a) which has been contravened in the present case by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enerating and transmitting unit and was liable to tax. However, in the instant case as stated hereinabove the assessment order starts with the case of stock transfer from one unit of the factory to another unit. 17. At this stage it is also pertinent to mention here that where the legislature wants to impose tax, irrespective of the fact that the transaction is a stock transfer, the word 'value of goods' has been used whereas under JVAT Act, three times of Tax is mentioned. For example, under section 74(5) of Orissa Value Added Tax, 2004 it is mentioned "…. A penalty equal to five times of the tax leviable on such goods, or twenty per centum of value of good, whichever is higher, ……. ". Whereas under section 72(6) of JVAT Act, it is mentioned "…. A penalty equal to the amount of three times of the tax, leviable on such goods, or rupees five thousand whichever is greater. " So the legislature has made its intent clear and the word 'value of goods' has not been mentioned, instead Rs. 5000/- is incorporated. Thus, this court holds that in terms of section 72 (6) of the JVAT Act no penalty above Rs. 5000 can be levied if no tax is payable on the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason that the petitioner after passing of the assessment order has availed alternative remedy of appeal and revision and had enough opportunity to canvass his case, as such no prejudice has caused to him. We have otherwise decided the issue of levy penalty in case no tax is leviable on the goods transported. 19. Before parting, it is necessary to deal with the objection raised by the Revenue counsel on the question of maintainability. In this regard, it is observed that both the cases were admitted for Hearing and the question of maintainability has been raised for the first time in written submission; as such we are of the opinion that no interest of justice would be served by remitting the case to the Tribunal on this score as both cases have reached final stages for determination and the issue being decided is pure question of law. As such we do not think it proper to entertain the plea of maintainability raised by the learned State counsel. 20. Having regard to the aforesaid discussions and the judicial pronouncements, the orders passed by the learned tribunal impugned in the respective writ applications requires interference and consequently, in relation to W. P. (T) 2549 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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