IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH VAT Appeal No.4 of 2008 Date of decision: 1.2.2008 M/s Shiv Shakti Exporters ......Appellant Versus State of Punjab and another ......Respondents CORAM:- HON'BLE MR.JUSTICE SATISH KUMAR MITTAL HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. Anil Kshetarpal, Advocate for the appellant. * * * Rakesh Kumar Garg, J . The assessee has filed the present appeal under Section 68 of the Punjab Value Added Tax Act, 2005 (for brevity the “Punjab VAT Act, 2005”) challenging the order dated 16.10.2007 passed by VAT Tribunal Punjab by raising the following substantial questions of law:- “(i) Whether in the facts and circumstances of the case, an order of penalty under Section 51 of the Punjab Value Added Tax Act, 2005 could be passed when it is an admitted position that no tax was leviable on import of rice from outside the State? (ii) Whether in the facts and circumstances of the case when documents, on scrutiny, have been found proper and genuine, an order of penalty under Section 51 of the Punjab Value Added Tax Act, 2005 could be passed? (iii) Whether any order of penalty can be passed on the presumption that there was an attempt to evade tax?” Brief facts giving rise to this appeal are as under:- At about 8 A.M. in the morning on 14.4.2005 Sh. HPS Gotra, Excise and Taxation Officer intercepted two trucks bearing registration Nos.HR-37-A-4808 and HR-46A-6839 loaded with rice on way to Kharar under suspicious circumstances, when he along with other staff was conducting checking under Section 51 of the Punjab VAT Act, 2005 on Mohali–Kharar road with a view to check evasion/avoidance of the tax under the Act. The Checking Officer spotted these trucks near Dara Studio, Mohali and followed the same. The trucks did not stop at the Balongi ICC to give information as required under Section 51(4) of the Act ibid. The checking Officer overtook the above said vehicles and signalled these to stop near Chawla Filling Station on Balongi-Kharar road. The drivers of the vehicles were asked to produce documents relating to the goods under transport and the forms No.VAT 12 got generated at the ICC, Balongi. Neither of the drivers could produce bill/delivery challan and form No.VAT 12 pertaining to the goods under transport in the said vehicles. The drivers stated that no bill/ GR was given to them and they did not give any information regarding the import of goods at the ICC, Balongi or any other nearest ICC as they had done at the behest of the owner of the goods. The statements of both the drivers were recorded. The ETO conducting the checking had reasons to doubt that the goods were not being accompanied by proper and genuine documents as required under law and therefore, the goods were detained under Section 51(6)(b) of the Act on the following grounds:- “(i) The goods have been imported from Delhi by the Punjab Dealer and were being taken to his business premises at Kharar via Barwala-Panchkula-Chandigarh and without given any information at the ICC Balongi or any other ICC en-route. (ii) The goods were not covered by any bill/delivery challan/GR as required u/s 51(2) of the Act ibid.” A notice was issued for 15.4.2005 to the owner of the goods to produce proper and genuine documents and explain the discrepancies as pointed out in the notice at Mohali office. However, Sh. Surinder Kumar Verma, Proprietor of the consignee-firm appeared before the Detaining Officer on the same day i.e. 14.4.2005 at about 10.35 AM at the ICC Balongi and produced the following documents in respect of both the vehicles:- 1. Bill No.22435 & 22436 dated 13.4.2005 for Rs.1,66,872/- & Rs.92,299.20p issued by M/s Atul Kumar Anuj Kumar Delhi in favour of M/s Shiv Shakti Exporters, Kharar. 2. G.R. No.2045 & 2046 dated 13.4.2005 of Delhi Punjab Carriers from Delhi to Kharar. 3. ST XXIV A of ICC Banur, bearing time 9:37:26 for GR No.2046 & 9:39:23 for GR 2045 in respect of vehicle No.HR-37A-4808. 4. Bill No.99 dated 07.04.2005 for Rs.2,10,250/- issued by M/s Shri Sham Rice Mill Chandoli (Varanasi) in favour of M/s Shiv Shakti Importers, Kharar. 5. GR No.1890 dated 07.04.2005 of Chandigarh Ambala Transport Company from Chandoli to Kharar. 6. ST XXIV A of ICC Banur bearing time 9:42:16 for GR 1890 in respect of vehicle No.HR-46A-6839.” On the basis of these documents it was submitted by the owner of the goods that there was no evasion of tax in the case and the goods had already been reported at ICC Banur and there was no requirement of getting the same reported at ICC Balongi. The Assistant Excise and Taxation Commissioner, Ropar vide order dated 14.4.2005 imposed a penalty of Rs.2,34,711/- under Section 51(7)(c ) of the Act. While passing the order dated 14.4.2005, the AETC, Ropar held that the owner/assessee failed to explain the fact that how he could procure the ST XXIV A from the ICC Banur when the Checking Officer had been following both the vehicles since 8.05. AM and the vehicles were detained and brought to ICC, Balongi at about 8.30 AM and since then both the vehicles were physically stationed at the ICC Balongi and further that an information had already been given to the AETC, Ropar about the detention of the vehicles at about 9.05 AM. The Assessing Officer had also relied upon the report of the ETO which stated that the owner had admitted that the documents pertaining to both the vehicles were with him and on learning about the detention of the vehicles, he rushed to ICC Banur and got generated the information by producing those documents at the ICC Banur. The owner put his signatures on the order sheet in token of his having accepted the findings of the Detaining Officer and no account books or any other document or evidence was produced by the owner to prove the genuineness of the transaction. Thus, it was found by the Assessing Officer that the owner had preplanned the procedure and process to evade the tax. The appeal filed by the assessee-appellant before the Deputy Excise and Taxation Commissioner (Appeals) Patiala Division, Patiala against order dated 14.4.2005 was also dismissed by holding that the drivers of the vehicles intentionally avoided the ICC to keep the transaction out of books and had reported only after the same was detained by the officers and therefore, the appellant had a plan in his mind to evade the tax. The assessee further filed an appeal before the Tribunal against the orders of the Assessing Authority and Deputy Excise and Taxation Commissioner imposing penalty upon him. However, the Tribunal vide order dated 16.10.2007 dismissed the said appeal holding that the assessee intentionally avoided the ICC Balongi to keep the transaction out of books to evade tax and the consignments were got fed into the computer at ICC, Banur in connivance with the ICC staff later on. These facts clearly prove mala fide of the appellant and the preplan of the owner to evade tax. Mr. Anil Kshetarpal, learned counsel for the appellant has vehemently argued that no penalty under Section 51(7)(c ) of the Act could be imposed upon the appellant as there was no attempt to evade the tax and the penalty has been imposed only on the ground that the goods have not been declared at Balongi Barrier. According to him, the goods had already been declared at ICC, Banur and therefore, there was no requirement of again declaring the goods at Balongi barrier. Learned counsel has further argued that the Authorities have erred in recording a finding that the appellant had submitted the information at ICC, Banur after the vehicles had been intercepted by the Excise and Taxation Officer. The whole story is based on conjectures and surmises and the penalty proceedings being quasi judicial in nature should be enforced in case the evasion is proved beyond any doubt. We have heard learned counsel for the appellant and perused the record. The arguments raised by the learned counsel for the appellant are devoid of any force and are liable to the rejected. While passing the impugned order dated 14.4.2005 the Assistant Excisse and Taxation Commissioner has relied upon the report of the Detaining Officer which was submitted to him while referring the case for necessary action under Section 51(7)(c ) of the Act. In this report, the Detaining Officer has clearly mentioned that the owner was asked to explain the fact that how he could procure Form ST XXIV A from the ICC, Banur whereas the checking officer had intercepted the vehicles at 8.05 AM at ICC, Balongi. The Detaining Officer has also mentioned in his report that the owner had admitted that the documents pertaining to both the vehicles were with him and on learning about the detention of the vehicles he rushed at the ICC, Banur and got generated the information by producing those documents at the ICC, Banur. The owner had also put his signatures on the order sheet in token of his having accepted the findings of the Detaining Officer and had not produced any account books/evidence to prove the genuineness of the transaction. While passing the impugned order the Assistant Excise and Taxation Commissioner has confronted the owner with the report of the Detaining Officer in reply to which he failed to give any satisfactory explanation thereto. On the basis of the said facts, the impugned order was passed by the Assessing Officer holding that the owner had attempted to evade the tax due under the Act and it was not necessary to wait till the liability to pay the tax actually arose. This finding of the Assessing Officer has been upheld by the Deputy Excise and Taxation Commissioner and the Tribunal respectively while passing the impugned orders. So much so, the appellant has not made any attempt to challenge the correctness of the report of the Detaining Officer before this Court. There is no averment in the appeal challenging the report of the Detaining Officer nor any argument has been raised to challenge the said report of the Detaining Officer on the basis of which penalty was imposed by the Assistant Excise and Taxation Commissioner, Ropar. Counsel for the appellant had no answer to the question to the effect that how the information was generated regarding the import of goods at ICC, Banur after 9.30 AM when the vehicles were detained at 8.30 AM at Balongi. There is one more fact which has sealed the fate of the appellant i.e the appellant appeared before the Detaining Officer at 10.35 AM at the ICC, Balongi in pursuance of the notice issued to him under Section 51(6)(b) of the Act. In view of the above stated facts and the finding of fact given by the Tribunal that the assessee-appellant has attempted to evade the tax by manipulating and by pre-planning a scheme or device to evade the tax and thereafter setting in motion the said scheme (feeding of information at ICC, Banur after the vehicles were detained at ICC, Balongi) and thus, attempted to evade the tax under the Act. In view of the above, no substantial question of law arises for the determination by this Court in the present appeal and thus, the same is dismissed. (RAKESH KUMAR GARG) JUDGE February 1, 2008 (SATISH KUMAR MITTAL) ps JUDGE