TMI Blog2010 (4) TMI 998X X X X Extracts X X X X X X X X Extracts X X X X ..... a Limited (for short, the assessee ) has filed the present appeal against the impugned order dated March 17, 2006 (annexure A12), vide which, the Sales Tax Tribunal, Punjab, dismissed its appeal. The compendium of the facts, culminating in the commencement of, relevant for disposal of present appeal and emanating from the record, is that the assessee was manufacturing light commercial vehicles, having its branches all over the country. One of its branches (sales office) was stated to be located and independently functioning as Swaraj Mazda Limited, Lotus Building, Stilt Floor, NECO Gardens, Viman Nagar, Nagar Road, Pune, Maharashtra . The main job of its Pune branch is simply to procure orders from various customers of Maharashtra State and supplied the vehicles after receiving the same from its head office and factory in Punjab. The assessee claimed that its Pune branch office receives the vehicles sent by the factory from Punjab and enters the same in its stock. Its sale is, thereafter, made by raising the invoice at its branches and vehicles are sold at all inclusive price . The buyer does not pay any extra transportation charges or other related expenses. It was allege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee filed the present appeal against the impugned order (annexure A12), which was admitted to consider the following substantial questions of law: (i) Whether the check-post authorities are empowered to go into the nature of transaction and impose the penalty under section 14B of the Punjab General Sales Tax Act, 1948, though the assessing officer has not disputed the transaction of branch transfer? (ii) Whether, on the facts and circumstances of the case, the Tribunal was justified in upholding the penalty under section 14B of the Act? Impugning the order, the learned counsel for the assessee has contended with some amount of vehemence that the drivers of the vehicles had voluntarily approached the ICC, Jharmari and produced/submitted all the relevant documents, depicting the quantity and value of the goods at ICC, which were duly recorded in computer record of the Department, so, the question of any evade/avoid the tax, did not arise at all. The argument further proceeds that the appropriate authority had no jurisdiction to impose penalty, during the course of summary proceedings under section 14B of the Act, which only required the proper accounting of tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the establishment of a check-post or information collection centre and inspection of goods in transit, while sub-section (6) authorizes the officer in-charge to check the documents and detain the goods. Section 14B(7)(i) of the Act postulates that the officer detaining the goods under sub-section 6, shall record the statement, if any, given by the consignor or consignee of the goods or his representative or the driver or other person in-charge of the goods vehicle and shall require him to prove the genuineness of the transaction before him in his office within a period of seventy two hours of the detention. The said officer shall, immediately thereafter, submit the proceedings along with the concerned records to such officer, as may be authorized in that behalf by the State Government for conducting necessary enquiry in the matter. Sub-clause (ii) of sub-section (7) further posits that the officer authorized by the State Government shall, before conducting the enquiry, serve a notice on the consignor or the consignee of the goods detained under clause (i) of sub-section (6), and give him an opportunity of being heard and if, after the enquiry, such officer finds that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds, such authorized officer is under legal obligation to conduct enquiry after serving a notice to the affected party and give him an opportunity of being heard and if, after the enquiry, such officer finds that there has been an attempt to avoid or evade the tax, only then the authorized officer can impose the penalty and not otherwise. Meaning thereby, the penalty can only be imposed if the documents produced by the owner or the person in-charge of the goods, were fake and not genuine and if there is sufficient material and specific finding that an attempt to avoid/ evade the tax due or likely to be due has been made by the assessee and not otherwise, which is condition precedent. Hence, the production and genuineness of the documents or otherwise is co-related and condition precedent for invoking the penal provision under this section. An identical question arose before a Full Bench of this court in Mool Chand Chuni Lal's case [1977] 40 STC 238. Having interpreted the relevant provisions and relying upon the judgment of this court in the case of Dunlop India Limited v. State of Punjab [1972] 30 STC 597, it was held that the amended section 14B(7) of the Act for levy of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. Such intricate question cannot be adjudicated upon in summary proceedings and penalty cannot be imposed without any cogent material to record the finding that there has been an attempt to avoid or evade the tax under the garb of section 14B(7) of the Act in this relevant connection, particularly when it is not the case of the State that the documents produced at ICC, depicting complete description and value of the goods, were fake or ingenuine. Hence, in our considered opinion, the authorities below proceeded on wrong premises and imposed the penalty without any material to avoid/evade the tax liability by the assessee. Reliance can also be placed upon the judgment of this court in Anand Refrigeration Co. (P) Limited's case [2010] 30 VST 235 in this regard. There is another aspect of the matter, which can be viewed from a different angle. As indicated above, section 14B(7) of the Act envisaged different situations for levying penalty. That means, there is a provision for levying a penalty in this respect, but penalty should not ordinarily be imposed only on the ground that such provision exists in statute. It should only be imposed if the party either acted deliberately ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
