ISSUANCE OF INVOICES BEARING THE SAME NUMBER – AN ATTEMPT TO EVADE TAX

[Mr. M. GOVINDARAJAN]

Rule 55 (3) of the Punjab Value Added Tax Rules, 2005 provides that a retail invoice shall carry the following details:

• A consecutive serial number, printed by a mechanical or electronic process;
• The date of issue;
• The name, address and registration number of the selling person;
• Full description of the goods;
• The value of the goods per unit;
• The total value;
• Signature of the proprietor or partner or direction or/authorized agent.

Section 51(2) of Punjab Value Added Tax, 2005 provides that the owner or person in charge of a goods vehicle shall carry with him a goods vehicle record, goods receipt, a trip sheet or a log-book, as the case may be, and a sale invoice or bill or cash memo, or delivery challan containing such particulars, as may be prescribed, in respect of such goods meant for the purpose of business, as are being carried in the goods vehicle and produce a copy each of the aforesaid documents to an officer in charge of a check post or information collection centre, or any other officer not below the rank of an Excise and Taxation Officer checking the vehicle at any place.

If there is any contravention under Section 51(2) penalty may be imposed on the assessee under Section 51(7).  The penalty shall be equal to 30% of the value of goods in case the assessee attempts to evade tax.   Otherwise the Adjudicating Authority shall order release of the goods and the vehicle, if not already released, after recording reasons in writing and shall decide the matter finally within a period of fourteen days from the commencement of the enquiry proceedings.

In ‘Surendra Steel Sales V. Deputy Excise & Taxation Commissioner (Appeals)-cum-Joint Director (Investigation), Patiala’ – 2014 (7) TMI 37 - PUNJAB AND HARYANA HIGH COURT the assessee was transporting certain goods in a vehicle.  The assessee reported the said goods at Information Collection Centre (established under Section 51 of the Punjab Value Added Tax Act, 2005).  The authorities detained the goods on the ground that the goods were not covered by proper and genuine documents.   The allegation was that the goods were loaded from Zirakpur branch of the assessee but the bill was issued from Chandigarh branch of the assessee.

The authority initiated proceedings under Section 51(7) of the Punjab VAT Act, 2005 (‘Act’ for short).  The assessee produced invoice No. 15105, dated 24.7.2012 issued by Surendra Steel Sales, Zirakpur and submitted that the accountant had inadvertently issued invoice of Chandigarh branch.    It is not denied by the owner of the goods before the adjudicating authority that the bill was issued after the detention of the goods.   The only explanation submitted is that the accountant had inadvertently issued invoice of Chandigarh branch and no other explanation has been put forth.  It has been admitted that the goods were loaded from Zirakpur but no bill was issued by the said branch.  The Adjudicating Authority held that the goods are not covered by proper and genuine documents.  It was further held that by issuing invoice from Chandigarh and loading the goods from Zirakpur and attempt to evade the tax of Punjab State has been made.  Therefore the Adjudicating Authority imposed penalty of ₹ 1,70,900/-.

Aggrieved against the order of the Adjudicating Authority the assessee filed appeal before the Commissioner (Appeals)-cum-Joint Director (Investigation), Patiala Division, Patiala.  The appellant contended before Commissioner that-

• The transaction is voluntarily disclosed at concerned Information Collection Centre;
• Due to some oversight the pre-printed computerized stationary of Chandigarh Branch was issued instead of the stationary of Zirakpur branch;
• The serial number of bill used is different for Chandigarh branch and Zirakpur branch and this was from the serial number used by Zirakpur branch only;
• There was no attempt ton evade tax.

The Commissioner (Appeals) found that there could not be mistake of using stationary of Chandigarh instead of Patiala on the basis of G.R. it came to notice that goods are going from Zirakpur not Chandigarh.   The transaction was detected in time.   Had it pass the Information Collection Center, the Zirakpur firm could easily say that it was not the bill of his firm.   The Commissioner (Appeals) held that there was an attempt to evade tax.  The use of stationary at Chandigarh office was intention with a view to evade the tax.   Therefore the Commissioner (Appeals) dismissed the appeal filed by the appellant.

Also aggrieved against the order of Commissioner (Appeals) the appellant filed appeal before the Tribunal.  Before the Tribunal the appellant contended that M/s Surendra Steel Sales, Chandigarh is having its branch office at Zirakpur.  The Tribunal examined the department file and found that there were two invoices bearing the same serial no. i.e., 15105 dated 24.7.2012.  Of these, one has been issued by Surendra Steel Sales, Zirakpur (Punjab) and the other one purport to have been issued by Surendra Steel Sales, Chandigarh.  Both these parallel invoices purport to have been prepared on the printed form.   The Tribunal noted that as per Rule 55(3) a consecutive serial No. is to be printed by a mechanical or electronic process in the invoice.  Under these circumstances how two parallel invoices could be issued bearing the same serial number and date by Surendra Steel Sales. The Tribunal held that no exception could be taken to the observations made by the Adjudicating Authority and appellate authority and confirmed the penalty imposed.

The assessee filed an appeal under Section 68 of the Act.  The appellant raised the following questions of law:

• Whether any order of penalty can be passed on the presumption that there was an attempt to evade tax?
• Whether, in the facts and circumstances of the case, when proper and genuine documents have been produced, an order of penalty under Section 51(7) of the Punjab Value Added Tax Act, 2005, could be passed?
• Whether, in the facts and circumstances of the case, an order of penalty under Section 51 of the Act could be passed due to inadvertent clerical mistake on the part of the appellant?

The High Court held that the Assessing Officer, the Commissioner (Appeals) and the Tribunal had come to the conclusion that there was an attempt to evade tax and that there were two invoices of the same number and date.   Out of the two invoices of the same serial numbers, one was issued by Surendra Steel Sales, Zirakpur and the other one was issued by Surendra Steel Sales, Chandigarh and this parallel invoices had been prepared on the printed form.   It was not disputed by the owner of the goods that bill No. 15105, dated 24.7.2014 was issued by Surendra Steel Sales, Zirakpur after the detention of the goods.   The explanation furnished by the appellant was held to be not plausible.   The finding of fact could not be shown to be perverse and the view taken by the authorities below was a possible view which cannot be faulted.  The High Court dismissed the appeal as there is no substantial question of law arises in this appeal.