VAT Appeal No.36 of 2012

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT

CHANDIGARH

VAT Appeal No.36 of 2012(O&M)

Date of decision: 26.09.2012

State of Punjab and another

-----Appellants

Vs.

M/s Desai Brothers Limited

----Respondent

CORAM:-

HON’BLE MR. JUSTICE AJAY KUMAR MITTAL

HON'BLE MR. JUSTICE GURMEET SINGH SANDHAWALIA

Present:-

Mr. Piyush Kant Jain, Addl.A.G.Punjab

for the appellants.

Ajay Kumar Mittal,J.

1.

The State is aggrieved by the order dated 29.9.2011

passed by the Value Added Tax Tribunal, Punjab (for brevity, “the

Tribunal”) whereby penalty of ` 4,65,092/- imposed upon the

respondent-dealer under Section 51(7) (b) of the Punjab Value Added

Tax Act, 2005 (in short, “the Act”) has been deleted. Following

substantial questions of law have been claimed:-

“i) Under the facts and circumstances of the case,

whether non furnishing of the set of documents viz.

Bill/invoice and GR at the ICC in respect of the

consignment of 370 bags of 'Bidis' was not indicative of

an attempt to evade tax by the respondents?

ii) Under the facts and circumstances of the case,

whether the plea of the respondents that invoice

No.1900505 was inadvertently left by the driver in the

truck, was not an afterthought to save them from the

penalty, after detection of the default with an intention

to evade tax?

iii) Under the facts and circumstances of the case,

VAT Appeal No.36 of 2012

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whether the findings rendered by the Tribunal in the

impugned order are perverse being contrary to facts on

record, and therefore not sustainable?

2.

The facts, in brief, as narrated in the appeal may be

noticed. On 1.8.2010, the goods comprising of Bidis under the brand

name of 'Desai Bidis' were being transported in Vehicle No.PB 3G-

0117. The goods were detained by Taxation Inspector, ICC Kaller

Khera as the same were not accompanied by proper and genuine

documents. On verification, it was found that in the GR, Invoice-

cum-delivery challan and Bidi dispatching report, declaration at the

ICC was given for 357 bags whereas declaration in Form-85 and

delivery note in Form ELTA -12 showed that the consignment was of

727 bags of bidis of the value of ` 32,83,851/- and no invoice or GR

was furnished for 370 bags of Bidis. Accordingly, the goods were

detained. Notice of detention was issued to the respondent under

section 51(6) (a) of the Act to show genuineness of the documents

accompanying the goods. No one appeared on behalf of the

respondent and the matter was referred to the Designated Officer for

taking further action under section 51(7) (b) of the Act. After hearing

both the parties and examining the matter, penalty of ` 4,65,092/- was

imposed upon the respondent under Section 51(7) (b) of the Act vide

order dated 23.8.2010, Annexure A.2. Aggrieved by the order, the

respondent filed an appeal before the Joint Director (Investigation)-

cum-Deputy Excise and Taxation Commissioner, Ferozepur Division,

HQ at Bathinda. Vide order dated 28.2.2011, Annexure A.3, the

appeal was dismissed. The respondent filed second appeal before the

VAT Appeal No.36 of 2012

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Tribunal. Vide order dated 29.9.2011, the Tribunal allowed the

appeal. As a result, the penalty order was set aside. Hence this appeal

by the State.

3.

The Tribunal while deleting the penalty came to the

conclusion that goods receipt No.157 dated 26.7.2010 in question

contained the particulars of 370 bags. It was also recorded that the

entries were made in Form ELTA-12 dated 26.7.2010 as well as

declaration in Form-85 wherein there was an entry with regard to 370

bags of Desai bidi. Further, the Tribunal observed that the driver had

left the invoice No.1900505 covering 370 bags in the vehicle due to

oversight and on being pointed out by the officer on duty, he went

back and picked up the remaining documents and produced the same

before the officer incharge. It was further held that leaving behind the

said