2012 (7) TMI 864 - HC - VAT and Sales Tax

Whether after the Tribunal held that the proceedings were bad for want of proper notice to the consignee-respondent the matter was required to be remanded to the appropriate authority for fresh proceedings after complying with the legal requirements under the statute. Held that - The penalty imposed by the Department had been paid by the consignee and thereafter the appeal had also been filed by the respondent-consignee. Once that was so we are of the opinion that the issuance of notice to the respondent was mandatory. The failure to issue notice rendered the order imposing penalty unsustainable. In such circumstances it was appropriate for the Tribunal to have remanded the matter to the assessing authority and has erred in not remitting the same to the assessing authority.The substantial questions are answered accordingly and it is held that the Tribunal ought to have remitted the matter to the appropriate authority for fresh decision in accordance with law. Matter is remanded to the Deputy Excise and Taxation Commissioner-cum-Joint Director (Investigation) Patiala Division Patiala.

Summary

Issues:
1. Appeal filed by Revenue under section 68 of Punjab Value Added Tax Act, 2005 against Tribunal's order.
2. Whether the Tribunal's order accepting the appeal on the ground of non-issuing of notice to consignee is sustainable.
3. Validity of notice issued to transport company and its impact on the consignee.
4. Locus standi of the appellant to file the appeal.
5. Sustainability of Tribunal's order under the circumstances.

Analysis:

1. The appeal was filed by the Revenue under section 68 of the Punjab Value Added Tax Act, 2005 against the order passed by the Value Added Tax Tribunal, Punjab. The substantial questions of law raised in the appeal included issues regarding the acceptance of the appeal by the Tribunal based on the non-issuance of notice to the consignee, the validity of the notice issued, the locus standi of the appellant, and the overall sustainability of the Tribunal's order.

2. The primary issue for consideration was whether the matter needed to be remanded to the appropriate authority for fresh proceedings after the Tribunal found the proceedings defective due to the lack of proper notice to the consignee-respondent. The Tribunal's failure to remand the matter was highlighted as a procedural error.

3. It was emphasized that the failure to issue notice to the consignee, as required by section 14B(7)(iii) of the Act, would render the penalty order unsustainable. Citing precedent, it was established that the issuance of notice to the consignee was mandatory, and the absence of such notice affected the validity of the penalty imposition.

4. The argument regarding the locus standi of the appellant to file the appeal was addressed, pointing out that the penalty was imposed on the transport carrier and not the consignee. The necessity of serving notice upon the respondent was reiterated as a crucial procedural requirement.

5. The judgment concluded that the Tribunal should have remanded the matter to the assessing authority for a fresh decision in compliance with the legal provisions. Consequently, the matter was remanded to the Deputy Excise and Taxation Commissioner-cum-Joint Director for further proceedings and a prompt adjudication of the appeal within a specified timeframe.

This detailed analysis of the judgment from the Punjab and Haryana High Court encapsulates the key issues, legal arguments, and the court's decision, providing a comprehensive understanding of the case.