TMI Blog2010 (2) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee ), has directed the present appeal, vide which, VAT Tribunal, Punjab, Chandigarh has dismissed its appeal. The brief facts, relevant for disposal of the present appeal and emanating from the record, are that the assessee is engaged in the business of trading of bardana, scrap and other disposal of goods. The assessee claimed that in the normal course of the business, it submitted a tender with MSTC Ltd., which is a Government of India enterprise, for purchase of unserviceable crawler tractors, which was accepted and the goods were sold to it (assessee), after deduction of tax collected at source at the rate of 1.1 per cent under section 206C of the Income-tax Act. The Government of India enterprise issued order-cum-acceptance letter dated March 9, 2004 (annexure A1) and sale invoice dated March 17, 2004 (annexure A2). The crawler tractor purchased by the assessee was further stated to have been sold by it (assessee) to M/s. Jagdish Narain Indira Bahadur, Kolkata vide bill No. 2365 dated March 27, 2004 for Rs. 7,03,800 including Central sales tax at two per cent, vide bill/cash memo dated March 27, 2004 (annexure A3). These goods are being transported through M/s. Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion collection centre and produced all the papers including bill and goods receipt, if there is a bona fide difference of opinion regarding rate of tax leviable on the goods under transport? Assailing the impugned orders, the learned counsel for the assessee has submitted that the Government of India enterprise MSTC Ltd., which is dealing only in the scrap, being sold by the Central Government authorities, has not charged any tax from the assessee, as it was a registered dealer and it has collected the tax at source under the provisions of the Income-tax Act, which was deductible only in case of sale of scrap. The argument is that the driver of the vehicle has voluntarily disclosed at the ICC and produced all the requisite documents, so the question of concealment did not arise and if there was no concealment of facts, then the required tax can be calculated at the time of assessment, but no penalty can be imposed under section 14B(7) of the Act. The argument further proceeds that there must be a cogent material on record and specific finding that there has been an attempt to avoid and evade the tax before invoking the penalty clause contained in section 14B(7) of the Act, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4B(7), which is as under: 14B. (7)(i) The officer detaining the goods under sub-section (6), shall record the statement, if any, given by the consignor or consignee or the goods or his representative or the driver or other person-incharge 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 authorised in that behalf by the State Government for conducting necessary enquiry in the matter. (ii) 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 there has been an attempt to avoid or evade the tax due or likely to be due under this Act, he shall, by order, impose on the consignor or consignee of the goods, a penalty, which shall not be less than twenty per cent and not more than thirty per cent of the value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty is satisfied that the documents as required under sub-sections (2) and (4), were not furnished at the information collection centre or the check-post, as the case may be, with a view to attempt to avoid or evade the tax due or likely to be due under the Act, he shall by order for reason to be recorded in writing, mpose on the consignor or consignee of the goods, penalty equal to fifty per cent of the value of the goods involved. In case, he finds otherwise, he shall order release of the goods for sufficient reasons to be recorded in writing. He may, however, notwithstanding anything contained in clause (ii) of sub-section (6), order release of the goods and vehicle on furnishing a security by the consignor or the consignee in the form of cash or bank guarantee or crossed bank draft for an amount equal to the amount of penalty imposable and shall decide the matter within a period of fourteen days from the commencement of the enquiry proceedings. Meaning thereby, the penalty under section 14B(7) can only be imposed if there is sufficient material and specific finding that an attempt to avoid or evade the tax due or likely to be due has been made by the assessee and not otherwis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer [1993] 90 STC 47 and Vasantham Foundry v. Union of India [1995] 99 STC 87), the matter did require serious consideration, and adjudication by the check-post officer was not called for. In such a situation invocation of jurisdiction for imposing penalty on the allegation of attempt at evasion was not permissible. The same view was expressed by this court in case Anand Refrigeration Co. (P) Limited, Jalandhar City v. State of Punjab [2010] 30 VST 235 (G.S. T.R. No. 17 of 2006, decided on January 18, 2010). It is not a matter of dispute that in the wake of tender, the assessee purchased unserviceable crawler tractor from the Government of India enterprise MSTC Ltd., and after deduction of tax collected at source at the rate of 1.1 per cent under the provisions of the Income-tax Act. It issued order-cum-acceptance letter (annexure A1) and sale invoice (annexure A2). The crawler tractor purchased by the assessee was further stated to have been sold by it (assessee) to M/s. Jagdish Narain Indira Bahadur, Kolkata, vide Bill No. 2365 dated March 27, 2004 for Rs. 7,03,800 including CST at two per cent, vide bill/cash memo dated March 27, 2004 (annexure A3). The driver o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on consideration of all the relevant circumstances. The honourable apex court in Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211 has ruled that even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Thus, seen from any angle, we are of the considered opinion that in the absence of any cogent material and specific finding that there has been an attempt to avoid or evade the tax due or likely to be due, no penalty can be imposed on the assessee as contemplated under section 14B(7) of the Act. The contrary argument on behalf of the Department stricto sensu deserves to be and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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