TMI Blog2010 (1) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... o be neither complete nor proper nor genuine. Accordingly, a show-cause notice was issued, to which, the assessee filed the reply. However, the Deputy Director (Enforcement) imposed penalty of Rs. 1,26,000 under section 14B(7) of the Punjab General Sales Tax Act, 1948 (hereinafter to be referred as the Act ) vide order dated December 31, 1996 (annexure P1). The appeal filed by the assessee was also dismissed by the appellate authority vide order dated October 22, 1998 (annexure P2). Aggrieved by the impugned order, annexure P2, the assessee filed the appeal. The Sales Tax Tribunal reduced the penalty levied (i.e., Rs. 1,26,000) to the extent of 15 per cent only, vide order dated July 20, 2000 (annexure P3). The rectification application filed by the assessee was also dismissed by the Sales Tax Tribunal vide order dated June 17, 2002 (annexure P4). In the wake of STC No. 29 of 2002, this court vide order dated November 28, 2005 directed and the Sales Tax Tribunal referred the following question of law for opinion of this court: Whether, on the facts and circumstances of the case, penalty under section 14B(7) of the Punjab General Sales Tax Act, 1948, was exigible? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground for believing that any dealer is trying to evade liability for tax or other dues under this Act, and that anything necessary for the purposes of an investigation into his liability may be found in any book, account, register or document, he may seize such book, account, register or document, as may be necessary. In order to check the evasion of tax, section 14B of the Act was amended and substituted by Punjab Act 13 of 1999 as under: 14B. Establishment of check posts or information collection centres and inspection of goods in transit. (1) If, with a view to prevent or check avoidance or evasion of tax under this Act, the State Government considers it necessary so to do, it may, by notification, direct for the establishment of a check-post or information collection centre or both at such place or places, as may be specified in the notification. (2) The owner or person in-charge of a goods vehicle shall carry with him a goods vehicle record, a trip sheet or a log book, as the case may be, and a goods receipt and a sale bill or cash memo, or delivery note containing such particulars, as may be prescribed, in respect of such goods meant for the purpose of trade, as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs) and shall be released only after the matter is finally decided under clause (iii) of subsection (7). (7)(i) 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 authorised in that behalf by the State Government for conducting necessary enquiry in the matter. (ii) The officer authorised 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encement of the enquiry proceedings (sub-section (7)(ii)). According to sub-section (7)(iii) if the appropriate authority 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, impose 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 fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that the assessee submitted the sales tax return, much prior to the detection of the present consignment and paid the tax through bank accordingly, describing all the relevant details. Not only that, the transaction was pre-authenticated, but it was accompanying the import permit in form 40 dated August 7, 1996 as prescribed under the West Bengal Sales Tax Act duly signed by the purchasing company and by the sales tax authority of West Bengal and the payments were made through the banks. Therefore, once the assessee had filed the returns of the full transaction, indicating therein, all the necessary details, then, in that eventuality, it cannot possibly be said that there was any attempt on the part of the assessee to avoid/evade the tax. As is evident from the record that in the wake of demand, the driver of the vehicle submitted all the documents to the sales tax authority. But the authorities below ignored the same only on the ground that the bill was not issued from the regular bill book and thus the consignment of 20 deep freezers was not covered by the proper and genuine documents and imposed the penalty of Rs. 1,26,000 under section 14B(7) of the Act. It is nowhere sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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