2014 (11) TMI 1267 - HC - VAT and Sales Tax

Levy of penalty - evasion of entry tax - bringing the scrap from out side the State of Punjab from secret passages in order to avoid the payment of tax - offence under Sections 420/120-B IPC and Section 4 of the Punjab Tax Entry of Goods into Local Areas Act 2000 - HELD THAT - A perusal of sub Section (7) (a) of Section 51 of the VAT Act lays down the provisions for penalty of 50% of the value of the goods if the vehicle is going without any documents. Under Section 51 (4) of the Act there is a provision of imposition of penalty of 50% of the value of the goods involved if the driver has failed to deliver within forty eight hours the transit receipt to the Officer Incharge of the check post or information Collection Centre. Sub Section (7) (b) of Section 51 of the VAT Act makes out the provisions of penalty when the vehicle is going without any proper or genuine documents to be 30% of the value of the goods. Provisions under the VAT Act provide for mandatory penalty. The provisions under Prevention of Corruption Act 1988 came up for consideration before the Supreme Court in Dilawar Singh s case 2005 (11) TMI 502 - SUPREME COURT and it was held that a co-accused cannot be summoned under Section 319 Cr.P.C as the Prevention of Corruption Act 1988 was a special Act. In the present case allegations in the FIR is that petitioner had made an attempt by deleting data from pan driver to conceal the total weight in the vehicle so as to evade imposition of VAT Act. The provisions in the VAT Act are sufficient and equipped to deal with the matters where an attempt is made to evade the tax. Thus the registration of the FIR in such like matters is totally an abuse of process of law. Petition allowed.

Summary

Issues: Quashing of FIR under Sections 420/120-B IPC and Section 4 of Punjab Tax on Entry of Goods into Local Areas Act, 2000.

Quashing of FIR under Sections 420/120-B IPC and Section 4 of Punjab Tax on Entry of Goods into Local Areas Act, 2000:
The FIR was registered based on information that the petitioner and co-accused were avoiding tax by bringing scrap from outside Punjab. Evidence included a weighing slip showing the weight of the vehicle and a statement by a witness confirming data deletion to evade tax. The FIR alleged non-payment of entry tax and offenses under specified sections. Reference was made to a previous judgment stating that VAT Act violations are civil in nature. Sections 51(4), 51(7)(a), and 51(7)(b) of the Punjab Value Added Tax Act were analyzed, highlighting penalties for lack of documents or genuine documents during transportation. The judgment cited the Prevention of Corruption Act, emphasizing that special provisions override general provisions, and a co-accused cannot be summoned without proper sanction. The court concluded that the FIR was an abuse of process as the VAT Act adequately addressed tax evasion attempts, leading to the quashing of the FIR and related proceedings.

Conclusion:
The High Court quashed the FIR registered under Sections 420/120-B IPC and Section 4 of Punjab Tax on Entry of Goods into Local Areas Act, 2000, due to the abuse of process of law, as the VAT Act provisions were sufficient to address attempts to evade tax. The judgment provided a detailed analysis of the legal framework, penalties, and relevant precedents, leading to the decision to quash the FIR and subsequent proceedings against the petitioners.