VAT Appeal No. 3 of 2010 [ 1 ] IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH VAT Appeal No. 3 of 2010 Date of Decision: March 9, 2010 M/s R.E.I. Agro Limited, Amritsar ........................ Appellant Versus State of Punjab ................................................... Respondent Coram: Hon'ble Mr.Justice Ashutosh Mohunta Hon'ble Mr. Justice Mehinder Singh Sullar Present: Mr. Avneesh Jhingan, Advocate for the appellant. ... ASHUTOSH MOHUNTA, J. The appellant has filed this appeal under Section 68 of the Punjab Value Added Tax Act, 2005 (hereinafter referred to as the `Punjab VAT Act') against the order passed by the Value Added Tax Tribunal, Punjab, dated 9.7.2009 vide which his appeal was dismissed. Briefly the facts of the case are that during the course of checking on 3.12.2007 at Harike, Smt. Varinder Pannu, Designated Officer- cum-Excise and Taxation Officer, Tarn Taran, intercepted vehicle No. RJ- 31G-3168 which was transporting paddy from Narela (Delhi) to Amritsar. On demand, the driver of the vehicle produced the following documents:- 1. GR No. 4736 dated 2.12.07 of M/s New Best India Goods Carrier, Delhi, showing transaction of 295 bags of Paddy VAT Appeal No. 3 of 2010 [ 2 ] Basmati from Narela (Delhi) to Amritsar. 2. Bill No. 215 dated 1.12.07 of Rs. 400534.00 in favour of REI Agro Kot Mangal Singh, Tarn Taran Road, Amritsar Central Warehouse, Chabhal The driver of the vehicle, however, failed to produce the declaration at the time of entry in Punjab as required under Section 51(2) of the Punjab VAT Act. This created a suspicion regarding the genuineness of the transaction and, hence, the goods were detained and a show cause notice was issued to the consigner and the consignee. In response to the show cause notice, Gurinderpal Singh, Senior Accountant of REI Agro Limited, appeared on 7.12.2007 and he was confronted with the defects mentioned above. He did not give any plausible explanation at the ICC. He also did not produce the Account Books to substantiate his claim of importing the goods regularly. Thereafter the case was forwarded to the Assistant Excise & Taxation Commissioner for further action under the Punjab VAT Act and a show cause notice was issued by the Enquiry Officer to the owner of the goods. In response to the notice, Gurinderpal Singh appeared on 7.1.2008. A representative of the company also appeared on three subsequent dates but failed to give any cogent reason for not reporting the transaction at the ICC. No Account Books were produced. The matter was thereafter referred to the Designated Officer i.e. AETC by the detaining officer for action under Section 51 (7) (c) of the Punjab VAT Act . Again no explanation was rendered as to why declaration at the ICC was not given. The Designated Officer came to the conclusion that there has been an attempt on part of the appellant to evade tax and, accordingly, imposed a penalty of VAT Appeal No. 3 of 2010 [ 3 ] Rs.2,16,288/- including VAT at the rate of 4% vide order dated 23.1.2008. An appeal was filed against the order passed by the AETC, Tarn Taran, which was dismissed by the DETC(A), Jalandhar Division, Jalandhar, vide order dated 26.6.2008. M/s REI Agro Limited filed an appeal before the VAT Tribunal which was also dismissed. Counsel for the appellant has submitted that there was no attempt on part of the appellant to evade tax because non-reporting at ICC cannot be a ground for imposing penalty. Learned counsel submits that the entire consignment of paddy was accompanied by proper and genuine documents as required under the law and that the details of the consignment were duly given to the Departmental Authorities but the same have not been considered. Learned counsel further submits that the driver of the vehicle was new and any omission on part of the driver cannot lead to the conclusion that there was an attempt to evade tax. A perusal of the impugned orders passed by the authorities below shows that the driver of the vehicle had taken recourse to an escape route for transportation of the goods. He did not choose the normal route from Delhi to Punjab but rather had chosen to take the goods through some escape route in order to avoid the entry of the transaction at ICC. The interception was at Harike which is at a distance of 150-200 kms. inside Punjab and it is clear that an escape route had been adopted by the driver of the vehicle. Moreover, ample opportunity was afforded to the appellant to produce his Account Books but the relevant Account Books were not shown and the details of previous transactions by the owner of the goods were also withheld which also shows that there was an attempt on part of the appellant VAT Appeal No. 3 of 2010 [ 4 ] to evade payment of tax. The appellant did not furnish the list of previous transactions in evidence in order to prove that goods were regularly generated at the ICC. In view of the aforementioned facts, it is clear that there was an attempt on part of the appellant to evade the payment of tax and, hence, penalty has rightly been imposed upon the appellant under Section 57 of the Punjab VAT Act. No substantial question of law arises for consideration in the present appeal and, accordingly, the same is dismissed. ( ASHUTOSH MOHUNTA ) JUDGE 9.3.2010 ( MEHINDER SINGH SULLAR ) Rupi JUDGE