VATAP No.2 of 2010 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Date of Decision:- 10.3.2010 M/s Rajiv Enterprises, Nand Market, Rajpura, Distt.Patiala --Appellant Versus The State of Punjab and another --Respondents CORAM: HON'BLE MR.JUSTICE ASHUTOSH MOHUNTA HON'BLE MR.JUSTICE MEHINDER SINGH SULLAR Present:- Mr.K.L.Goyal, Senior Advocate with Mr.Sandeep Goyal, Advocate for the appellant. ORDER:- The compendium of the facts, relevant for disposal of present appeal filed by the appellant-assessee M/s Rajiv Enterprises (for brevity “the assessee”) and emanating from the record, is that during the course of checking and in the wake of secret/definite information, the checking officer intercepted the vehicle bearing registration No.HR-37B-4117, after chasing it for 2 KM. The vehicle was carrying the goods (Tobacco) from Ambala City to Rajpura. It revealed that the goods were being transported for the second time through already used VAT form XXXVI alongwith old invoice and the GR. The modus operandi of the dealer was that once in a day, he generates one bill and GR and after that, through out the day, he uses the same VAT form XXXVI, invoice and GR to evade the payment of tax. The explanation put forth on behalf of the assessee, that the lapse occurred on account of the fault of the driver of the vehicle, did not find favour with the detaining officer and the matter was referred to the designated officer. 2. In the wake of show cause notice as to why a penalty under section 51 (7)(c) of the Punjab Value Added Tax Act, 2005 (for short “the Act”), may not be imposed, the Advocate of the assessee appeared before the designated officer on 21.10.2008. The case was adjourned to 22.10.2008. The counsel was VATAP No.2 of 2010 2 confronted with the material. The assessee failed to prove the genuineness of the documents, despite adequate opportunities. Taking into consideration the material on record and the report of the detaining officer, the designated officer recorded a finding that there was an attempt to evade the payment of tax by transporting the goods for trade without proper and genuine documents and without furnishing its information at ICC. Therefore, he imposed a penalty of Rs.1,79,739/- on the assessee under section 51(7) (c) of the Act, vide impugned order 24.10.2008 (Annexure A3). 3. Aggrieved by the impugned order (Annexure A3), the assessee filed the appeal before the Deputy Excise and Taxation Commissioner (Appeals), which was dismissed vide order dated 27.2.2009 (Annexure A4). 4. Still aggrieved by the impugned order (Annexure A4), the assessee filed the appeal before the VAT Tribunal, Punjab, Chandigarh, which was also dismissed, vide impugned order dated 31.8.2009 (Annexure A6). 5. The assessee still did not feel satisfied with the impugned orders and filed the present appeal. 6. We have heard the learned counsel for the assessee and have gone through the record with his valuable assistance. 7. The main argument of the learned counsel for the assessee that mere non-reporting at the ICC Barrier and non production of the documents by the driver, is no ground to impose the penalty under section 51 (7) (c) of the Act and also that since the goods were not liable to be taxed, so, question of its evasion does not arise at all, is neither tenable nor the observations of the Hon'ble Supreme Court in cases Commissioner of Sales Tax, U.P.Lucknow vs. Anoop Wines [1988] 71 S.T.C. 262; Commissioner of Sales Tax, U.P. and another v. Bakhtawar Lal, Kailash Chand Arhti and others [1992] 87 STC 196; Bharat & Co. v. Trade Tax Officer and another (2005) 6 Supreme Court Cases 796 and this Court in cases State of Punjab v. Malwa Industries Ltd. and another (2007) 30 PHT 512 (P&H) and Krish Pack Industries, X-133, Raghubar Pura No.1, Tagore Gali, Gandhi Nagar, New Delhi. Through its Partner Shri Ajay Kumar Babna v. State of Punjab Through Financial Commissionr and Secretary, VATAP No.2 of 2010 3 Government of Punjab, Excise and Taxation Department, Punjab, Punjab Civil Secretariat, Chandigarh and others (2006) 28 PHT 27 (P&H), are at all applicable to the facts of present case. 8. In Anoop Wines's case (supra), it was observed that “where penalty was imposed on the respondent for failure to register, under clause (d) of section 8-A (1) of the of the U.P. Sales Tax Act, 1948, as a dealer commencing business during the current year and the High Court held that clause (d) was inapplicable as the respondent had commenced business during the preceding year and in a petition before the Supreme Court for special leave to appeal, the penalty was sought to be justified on the ground that clause (c) was satisfied as the respondent was a dealer whose actual or estimated turnover was not less than the prescribed amount.” So, on the peculiar facts and circumstances of that case, it was held that without calling upon the assessee or the dealer to explain the department's claim regarding the applicability of clause (c) of section 8-A(1) of the U.P.Sales Tax Act, the penalty which was imposed under clause (d) of section 8-A(1) could not be sustained by reference to clause (c). 9. Sequelly, in Bakhtawar Lal Kailash Chand Arhti and another's case (supra), it was held that “purchases of the goods and their despatch were parts of the same transaction and the movement of the goods from one State to another was occasioned by and was the result or the incident of the purchases. Therefore, the purchases were in the course of inter-State trade and the respondents were not liable to purchase tax under section 3-D of the U.P.Sales Tax Act, 1948.” The same view was reiterated in Bharat & Co.'s case (supra). 10. Likewise, in Malwa Industries Ltd.'s case (supra), there was no allegation showing short payment of central excise tax on the goods. It has been found to be evident from the record that authorities below have totally given good bye to the allegations made in the notice and for imposing the penalty on the sole ground that central sales tax charged on the goods was less. So, while dismissing the appeal of the revenue/State, it was observed that “no penalty could be imposed under such circumstances.” 11. Similarly, in Krish Pack Industries's case (supra), the only VATAP No.2 of 2010 4 contention raised was that the authorities have not considered the explanation of the petitioner that there was no attempt to evade the tax and mere absence of entry at ICC could not be taken as conclusive for imposing penalty. Possibly, no one can dispute about the aforesaid judgments, but the same would not come to the rescue of the assessee, as regards the present controversy is concerned. 12. It is not a matter of dispute that in the instant case, the penalty was imposed under section 51 (7)(c) of the Act, which postulates that “if 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 the case may be, with a view to attempt to avoid or evade the tax due or likely to be due under the Act, he shall by order, for reasons to be recorded in writing, impose on the consignor or the consignee of the goods, penalty equal to fifty per cent of the value of the goods involved”. As is evident from the record that the driver, who was person incharge of the goods of the assessee, was required to report at ICC Barrier, as contemplated under section 51 (2) of the Act. 13. The bare perusal of the record of this case would reveal that after scrutiny of the documents produced by the driver, the checking officer found that the VAT form XXXVI bearing No.AA-0847137 was filled at ICC Banur on 13.10.2008 at 13:02:07 hours but the goods were detained on the same day at 8:35 PM. It means, the truck was carrying the goods of the assessee in second trip on the old VAT form XXXVI invoice and GR. In pursuance of the definite information, the checking officer intercepted the vehicle in question after chasing it for 2 KM. The driver crossed the vehicle without informing at ICC Barrier. The statement of Anil Kumar driver was recorded on the spot in this respect. It is evident from the order of the designated officer that the assessee failed to prove the genuineness of the transaction of the goods meant for trade, despite adequate opportunities. The modus operandi of the assessee to evade the payment of tax was clear from the fact that he generates one bill every day and then used the same bill, GR and VAT form XXXVI for other trips because all his transactions are of 200 bags and same value. The authorities below recorded a finding of fact based on the evidence that the driver did not report at ICC Barrier VATAP No.2 of 2010 5 and did not produce any document. Having completed all the codal formalities, ultimately the matter was referred to the designated officer, as per provisions of the Act. The counsel for the assessee appeared before the designated officer on 21.10.2008 and the matter was adjourned to 23.10.2008 for final hearing. The designated officer having perused the record and report of the detaining officer came to the conclusion that the driver did not stop the vehicle and crossed the ICC without any information, the vehicle was chased. The assessee neither produced any relevant documents before the detaining officer nor the designated officer to prove the genuineness of the transaction. The Commissioner (Appeals) recorded following finding of fact based on the evidence:- “I have heard the arguments from both the sides and have gone through the record produced before me. I am fully convinced that the goods amounting to Rs.3,59,478/- are taxable, meant for trade and the dealer has tried to evade the payment of tax by transporting the goods for trade without proper and genuine documents and without furnishing information of goods at any ICC of State of Punjab. In view of the facts of the case the order passed by the inquiry dated 24.10.2008 does not need any interference and the same is upheld. Appeal is dismissed.” 14. The findings of the Commissioner were reiterated and upheld by the Tribunal. Learned counsel for the assessee has neither pointed out any cogent material, on the basis of which, contrary view can be taken nor any legal infirmity has been pointed out in the impugned orders. 15. Therefore, it is evident from the record that the driver, who was person Incharge of the goods of the assessee, did not stop his vehicle despite signal. It was chased and brought back to the ICC Barrier. The driver failed to produce the relevant documents, so much so the assessee did not produce any material before the designated officer to prove the genuineness of the transaction, despite adequate opportunities. All these facts if cumulatively put together, then the conclusion of evading or avoiding the tax is inevitable. Hence, it is held that the assessee has contravened/violated the provisions of the Act and the authorities below have rightly imposed the penalty on it (assessee), in VATAP No.2 of 2010 6 the present set of circumstances. 16. No other point, worth consideration, has been urged or pressed by the learned counsel for the assessee. 17. In the light of the aforesaid reasons, we are of the considered opinion that as there is no merit, therefore, the instant appeal is hereby dismissed. (Ashutosh Mohunta) Judge (Mehinder Singh Sullar) Judge 10.3.2010 AS Whether to be referred to reporter? Yes/No