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TMI Blog2013 (4) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Tribunal requiring the Tribunal to refer to the High Court any question of law arising out of its order. The Tribunal has power either to accept or to reject application.When Tribunal agrees, it has to draw up a statement of the case and refer it to the High Court, then the High Court, upon hearing, has to decide the question of law raised.The judgment shall contain the grounds onwhich decision is based, copy of the judgment has to be notified and the Tribunal has to decide the case accordingly. 2. The Appellate Tribunal has decided three appeals as filed by M/S Tina Sanjeev Verma under Section 73 of the VAT Act. Appeal No.1 has been dismissed whereas appeal Nos.2 and 3 have been allowed. Three applications, one by Tina Sanjeev Verma and other two by Commissioner Sales Tax, have been filed requiring the Tribunal to refer to the High Court the question of law arising out of its order in theaforesaid three appeals. Tribunal agreeing thereon has drawn up the statement of facts and has formulated the question of law and referred to this Court for final determination. 3. In nutshell, the background of the case is:- I) Tina Sanjeev Verma (hereinafter referred to as the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kka Mal Jewellers, Ludhiana, was appointed as evaluator vide order dated 23.1.2006. The said evaluator had submitted his report on 08.02.2006 stating therein that the value of the ornaments is Rs.1,93,77,678.00(one crore ninety-three lac seventy seven thousand and six hundred seventy eight). V) The Appellate Authority, after noticing all the pleas as were raised, has dealt with all the three appeals separately. While dealing with appeal pertaining to the order passed under Section 66(6) of the VAT Act, has opined that Section 66(6) is applicable to unaccounted for goods of a registered or an unregistered dealer. The appellant did not possess any purchase invoices or any books required to be maintained in ordinary course of business when she, admittedly, was in possession of the goods which are taxable in nature and on her own showing those goods were meant for sale in the Valley after market survey, therefore, Additional Commissioner was justified in passing order under Section 66(6) of the Act. He was authorised by the Commissioner Commercial Taxes, therefore, order of penalty, passed by the Additional Commissioner, has been maintained. VI) While dealing with the order passed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, whichever is higher. The said security has to be adjusted against the tax, penalty, interest fee or any other sum that may be payable by such dealer. The learned Appellate Authority has treated Additional Commissioner as an authorized officer under sub-section (4) of Section 67 of the VAT Act, on the strength of authorisation order of the Commissioner Sales Tax, where-under Additional Commissioner has been authorized to conduct inspection and also to act under Section 66(3) and 66(6) of the VAT Act. IX) The Appellate Authority has also opined that the Commissioner vide notification No.5 of 1988 dated 24.9.1988, had authorized officers to exercise the powers under sub-section (4) of Section 67, in terms whereof, Deputy Sales Tax Commissioner, Srinagar, is also an authorized officer. Since Deputy Sales Tax Commissioner has been re-designated as Additional Commissioner, Commercial Taxes(Admn.) on 26.4.2005, therefore, Additional Commissioner was impliedly authorized to exercise powers under sub-section (4) of Section 67 of the Act. X) Then Appellate Authority has opined that the powers of the authorized officers under Section 67(10) of the Act are not restricted to Check post or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal, is CTO. The Additional Commissioner was authorized by the Commissioner to inspect the goods, the documents and to seize the same, if found necessary under Section 66(3) and 66(6) of the Act, therefore, Additional Commissionercould not be said to be an appropriate authoritynor was he authorized to impose penalty for any default under Section 69 of the Act. In the same background, order of the Additional Commissioner passed under Section 69 and also the order of the Appellate Authority has been set aside. (b) While referring to the order passed under Section 67(10) of the Act, the Tribunal has observed that the seizure of the gold ornaments has been made under Section 66(6) and not under Section 67 of the VAT Act. The Additional Commissioner had no jurisdiction to seize the goods and to demand security because Section 67(10) empowers the officer incharge of the Special Investigating Unit (SIU), notified area or check post or any other officer authorized under sub-section (4) of Section 67 of the Act. The Additional Commissioner does not fall within said categories. The Commissioner (Appellate Authority) has wrongly assumed that the Additional Commissioner is authorized offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . c. Whether on the facts and circumstances of the case, this Tribunal was correct in holding that the learned Addl. Commissioner, Commercial Taxes (Admn.) Kashmir Division, Srinagar is not appropriate authorityunder Section 69 of the Act. d. Whether on the facts and circumstances of the case, this Tribunal is correct in holding that section 67 of the Act is applicable where the goods are transported within state and are in transit or being transported or lying in any godown of transport agency at the time of seizure only. e. Whether on the facts and circumstances of the case, this Tribunal is correct in holding that the security cannot be demanded where the penalty has already been levied under the provisions of the Act. 8. Question(a):Whether on the facts and circumstances of the case, this Tribunal has been justified in law in confirming the order of imposition of penalty u/s 66(6) of the J&K VAT Act 2005. (1)Contention of the learned counsel for the appellant (Tina Sanjeev Verma) that the appellant is not a dealer under the Act, is without any substance. Section 66(6) of the VAT Act is self-explanatory.Section 66(3) and 66(6), for the facility of reference, is reproduced he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uggest that any goods which are not accounted for by the dealer or such other person in his account books maintained in the ordinary course of business, the Commissioner or the authorized officer shall have the powers to seize such goods and levy a penalty which shall be equal to double the amount of tax payable on such goods. (3)In the instant case, the question whether the appellant is a dealer or not, in view of the words employed in Section 66(6) of the VAT Actor such other persontakes into its sweep not only the dealer but other person. When admittedly appellant was carrying huge quantity of gold ornaments and had come up for market survey, she was required to possess some documents or account books, normally maintained in the ordinary course of business, her contention that she had not sold, as yet, any portion of the goods so as to maintain account books, is irrelevant because she was otherwise required to possess documents. (4)Additional Commissioner, admittedly, was authorized by the Commissioner, Commercial Taxes, under sub-section (3) of Section 66 of the VAT Act and in case need arises, then to take action under sub-section (6) of Section 66 of the VAT Act. 9. String ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 69(1)(o) of the J&K VAT Act, 2005. Question(c)Whether on the facts and circumstances of the case, this Tribunal was correct in holding that the learned Addl. Commissioner, Commercial Taxes (Admn.) Kashmir Division, Srinagar is not appropriate authorityunder Section 69 of the Act. Question(d)Whether on the facts and circumstances of the case, this Tribunal is correct in holding that section 67 of the Act is applicable where the goods are transported within state and are in transit or being transported or lying in any godown of transport agency at the time of seizure only. 12.Section 67 of the VAT Act has an objective. Establishment of check posts and inspection of goods in transit is to ensure that the tax leviable, on the goods, is not evaded. Section 67 empowers the concerned authorities, as reflected in the Section itself, as to how the transport of the goods shall be monitored and strictly checked. Powers under sub-section (10) of Section 67 have been invoked by the Additional Commissioner where-under appellant has been asked to furnish the security for an amount equal to double the amount of tax leviable. The said power has to be exercised by the officer incharge of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... projected that she was not aware about the tax laws applicable in the state of Jammu & Kashmir, she had no idea to declare the carrying of goods at two Check posts but the said explanation has not been accepted, rightly so, by the first Appellate Authority. A person dealing in taxable goods has to be aware about the tax regime, by one pretext or the other, the person cannot be given chance to give slip to the law and to evade the imposition of penalty. The explanation offered has been rightly rejected by the Appellate Authority. Ignorance of law is no excuse. No cause, what to speak of justified cause, has been offered by the appellant for not declaring goods (golden ornaments) worth crores of rupees, which she was carrying for market survey and sale to Kashmir. 15. Whether Additional Commissioner was competent to impose the penalty underSection 69(1)(s)(xiii). Section 69(1)(s) provides that for default, penalty shall be imposed by the appropriate authority,who is the said appropriate authorityhas not been defined in the Act, as has been noticed by the learned Tribunal. 16. The Appellate Authority (Commissioner, Commercial Taxes), while referring to Section 17(1)(o) of the J&K GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner, in terms of said notification, would continue to be the designated officer. There is no such notification which would show that words Deputy Sales Tax Commissioner as appear in the notification, have been substituted by Additional Commissioner, Commercial Taxes. Tribunal has taken the view that appropriate authority is the Assessing Authority i.e. CTO. The word appropriate authority has been interpreted to mean a person who can assess tax under the Act. In the instant case Assessing Authorityis CTO, so it is CTO who can be termed to be an appropriate authoritybut Section 104(2)(b) of the VAT Act is relevant to be quoted:- 104.Transitional provisions. (1)...... (2) (a)...... (b) any person appointed as Commissioner or any person appointed to assist the Commissioner under the Jammu and Kashmir General Sales Tax Act, 1962 before the appointed date shall, on and from the appointed day, be deemed to have also been appointed under the Act and shall continue in office as such till such person ceases to be Commissioner or ceases to be the person appointed to assist the Commissioner. 19. The wording employed would show that any person appointed to assist the Commissioner under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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