IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. VAT Appeal No.38 of 2010 Date of decision: 23.8.2010 State of Punjab & another. -----Appellants. Vs. M/s Kabir Diamonds Pvt. Ltd. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Piyush Kant Jain, Addl.A.G., Punjab for the appellants. --- 1. This appeal has been preferred by the revenue-State under Section 68 (1) of the Punjab Value Added Tax Act, 2005 (for short, “the Act”) against order dated 6.5.2008 passed by the Value Added Tax Tribunal, proposing following substantial questions of law:- “i. Whether the orders passed by the learned VAT Tribunal Punjab deserves to be quashed in view of the law laid down by the Hon’ble Supreme Court in the case of Assistant Commercial Taxes Officer Vs. Bajaj Electricals Ltd. (supra)? ii Whether the penalty order dated 6.5.2008 is sustainable in law because the respondent has failed to fulfill the statutory obligation of furnishing information under Section 51 (4) of VAT Act, 2005 at the nearest Information Collection Centre established by the State Government for bringing the goods in the State of Punjab? VAT Appeal No.38 of 2010 iii Whether the penalty order dated 16.5.2008 has wrongly been set aside by the Tribunal ignoring the fact that the possibility of evading the tax could not be ruled out when the goods were being brought without any proper and genuine document as prescribed under Section 51 (2) and 51 (4) of the Punjab VAT Act, 2005? iv Whether the owner of the goods has violated the provisions of Section 51 of the Punjab VAT Act, 2005 with a view to evade the tax payable to the state of Punjab in view of facts and circumstances of the case? v Whether the learned Tribunal passed different orders when the goods involved in both the cases were jewellery and were brought in the State of Punjab without giving information at any ICC and without any proper and genuine documents?” 2. The Checking Wing of the Excise and Taxation Department, Chandigarh checked Ved Pal, representative of the respondent with some jewellery and recorded his statement in response to the allegation that attempt to evade tax was being made as transportation of goods was not reported at the Check Post. Having regard to facts and circumstances of the case, penalty under Section 51(7)(c) of the Act was imposed, which was upheld in appeal. On further appeal, the Tribunal set aside the penalty with the following finding:- “Gold and diamond jewellery is admittedly value and costly item and if a man travels with gold and diamond jewellery, he will conceal the item and will not like to disclose to any body to avoid physical risk to the person concerned and loss. In the present case, this Ved Pal was traveling in bus, he could not 2 VAT Appeal No.38 of 2010 possibly tell the driver to stop at the ICC while the bus was entering Punjab so that declaration is made. Provision to Section 51 (2) may be applicable when the person is selling goods from within or outside the State in the course of inter-State trade or commerce. If the goods are brought in to Punjab with or without making declaration and then are sold in Punjab, then this may not be inter state sale by that person and may be the sale within the State. Only 1% tax is payable on gold and diamond jewellery and tax involved in this case may be just about Rs.16000/-. The list of jewellery items which the person concerned was carrying at the time of detention ran into five pages and on page 5, total of the details of first four pages were made of the items which he was carrying. The diamond weight was 160.46 Kt. as stated in the voucher No.108 dated 23.04.2008. The gold had weight 1029.908 gm as again mentioned in the voucher which will show that the goods were actually for approval and it may be that Ved Pal was to take these goods to different jewelers of Nawanshahr, Jagraon and Moga for approval but as had been the practice, he had no authority to sell and was to take back the goods after showing and thereafter, the sale of the items was to take place at Delhi.” 3. We have heard learned counsel for the appellants. 4. Learned counsel for the appellants submitted that the finding recorded by the Tribunal was erroneous and if such a plea was upheld, it will encourage evasion of tax. 3 VAT Appeal No.38 of 2010 5. We are unable to accept the submission. The Tribunal has recorded categorical finding, after appreciating facts and circumstances of the case, that there was no attempt at evasion of tax and goods were only being carried for approval and not for sale. 6. In view of the finding recorded himself by the Tribunal, no substantial question of law arises. 7. Learned counsel for the appellants himself states that the judgment of the Hon’ble Supreme Court in Commercial Taxes Officer v. Bajaj Electricals Ltd. [2008] 18 VST 436, referred to in the proposed question of law is distinguishable. 8. Accordingly, this appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE August 23, 2010 ( AJAY KUMAR MITTAL ) ashwani JUDGE 4