TMI Blog2019 (11) TMI 1605X X X X Extracts X X X X X X X X Extracts X X X X ..... the M. P. VAT Act, 2002 makes it very clear that in those circumstances where there is no attempt to evade tax in respect of goods, it shall be deemed that there is no violation of provision of sub-section (2) has taken place. The appellate Board has not at all considered the aforesaid explanation while affirming the penalty order and therefore, the question of law is answered in favour of the assessee. Appeal allowed - decided in favor of appellant. - VATA No.22/2018, VATA No.21/2018 - - - Dated:- 14-11-2019 - S. C. Sharma And Shailendra Shukla JJ. For the Appellant : Shri Shashwat Seth, learned counsel For the Respondent/State : Shri Vinay Gandhi, learned Deputy Government Advocate ORDER Regard being had to the similitude in the controversy involved in the present cases, the appeals were analogously heard and by a common order, they are being disposed of by this Court. Facts of VATA No.22/2018 are narrated hereunder. 02-The present appeal is arising out of order dated12/01/2018 passed by Madhya Pradesh Commercial Tax Appellate Board, Bench at Indore. 03-The facts of the case reveal that the appellant before this Court is a Company registered under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also dismissed the appeal by passing the order dated 12/01/2018. The appellant has thereafter, preferred an application under Section 54 of the Act of 2002 for rectification and the same was also dismissed by the Board and the Bank guarantee of the appellant has also been encashed. 08-The appellant has raised various grounds before this Court and it has been argued that the impugned order passed by the appellate Board is without application of mind as well as without considering the case laws referred by the appellant at the time of hearing. It has been further contended that the appellate Board also ignored the explanation to Section 57(8) of the Act of 2002 which reads as under:- Explanation - Where the explanation submitted lead to the conclusion that there is no possibility of sale of goods within State of Madhya Pradesh or there was no attempt to evade tax in respect of the goods, it shall be deemed that no violation of the provisions of sub-section (2) has taken place. The contention of learned counsel for the appellant is that as per the provisions of Section 57(2) of the Act of 2002, transporter was carrying bill, bilty and has produced the same before the Che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after, the authority is required to pass self contained order of penalty. 10-Reliance has also been placed upon a judgment delivered in the case of Ganpati Foods Vs. State of Punjab and Another reported in (2014) 24 STJ 517 (P H), wherein it was held that the goods in question were duly accompanied by Invoice/GR, Statutory form VAT D-3 and insurance policy. Further there was stamp of Information Collection Centre on GR. The driver out of ignorance being illiterate did not generate the declaration at the Information Collection Centre. The Tribunal without examining authenticity and veracity of these documents on suspicion concluded that there was an attempt to evade tax on the part of appellant. The High Court held that no conclusion could be drawn that the declaration was not obtained with a view to evade tax unless the documents available with vehicle were not genuine . It was further held by the High Court that the Tribunal should have recorded definite finding whether these documents were genuine or not and thereafter should have adjudicated the matter. Impugned order of the Tribunal was set aside, and matter was remanded to Tribunal to decide the same afresh in accordance w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d circumstances of the case. 14-With the consent of the parties, the matter is being heard finally at motion hearing stage itself on the following substantial question of law:- Whether the appellate Board has erred in ignoring the explanation to Section 57(8) of the Act of 2002, which provides that where the explanation submitted lead to the conclusion that there is no possibility of sale of goods within State of Madhya Pradesh or there was no attempt to evade tax in respect of the goods, it shall be deemed that no violation of the provisions of sub-section (2) has taken place. 15-Undisputedly, at the time of surprise check, the driver was having all papers available with him except Form No.49. The assessee is engaged in the business of manufacturing of Chewing Tobacco, Scented Elaichi and Scented Supari. The truck was carrying roasted Elaichi and Supari with silver coating. The goods were being transported from Delhi to Madhya Pradesh and it is nobody's case that an attempt was made by the assessee to evade payment of tax. On the contrary, the appellant has paying tax on the subject goods @ 13% on the basis of its uses and classification under the Act of 2002 and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resume, until contrary is proved, that an attempt is being made to facilitate the evasion of tax. Under such a situation, the check post officer may seize the vehicle and goods and ask for particulars from the consignor or consignee of the goods and if the particulars are not given and if the check post officer is not satisfied, he has to record his finding along with reason issue a show cause notice within fifteen days as to why penalty specified in the notice be not imposed. Penalty shall be equal to ten times of the amount which would have been payable if the goods were sold within the State. Under sub-section (11), after noticing as required under sub-section (10), opportunity of hearing has to be granted and order passed under subsection (12) imposing penalty. 9. In the present case, the irregularity that was detected when the vehicle was checked is the one contemplated under sub-section (7) of section 45-A of the Act as the goods notified under sub-section (4) were being transported and in respect of the same, transporter had not filed any declaration. It is not in dispute in the present case that the declaration as required under Form 75 was not produced by the transporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the revisional authority that the documents produced at the time of checking and the material being transported showed any difference in the matter of quality, quantity or specification or otherwise. On the contrary, it is stated that Form No. 75 which was a separate document to be carried was not available. Records indicate that all the material particulars and information which were required were available in the documents produced at the time of checking of the vehicle and no mala fides are proved or established and the nexus between the act of non-production of the document and the intention to evade tax is not proved. Under these circumstances, the question is can penalty be imposed merely because some document is not produced at the time of checking of the vehicle. In this regard, the principle laid down by the Supreme Court in the case of M/s Hindustan Steels Ltd. (supra) may be considered. In paragraph 7 of the aforesaid judgment, the Supreme Court has held as under: An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication at the check post. That apart, the Company was granted total exemption from payment of entry tax from 17th November, 1997 to 16th November, 2002 vide order, Annexure P/11 dated 13th November, 2001. Therefore, there cannot be intention on the part of the Company to evade payment of entry tax as they were already exempted from such payment. Similarly, a certificate of eligibility in the matter of deferment in payment of tax has been granted vide notification dated 3rd August, 2001 passed by the Government of Madhya Pradesh, Directorate of Industries, Bhopal Under these circumstances, it was incumbent upon the authorities concerned to examine the entire matter and find out if there was any intention to evade payment of tax before imposing penalty on the Company, a finding should have been recorded as to whether there was any intention on the part of the Company to evade tax, as no such intention is either established or proved, on the contrary, as a matter of course, mechanically penalty is imposed merely on the ground that the statutory provisions are violated and a particular declaration form is not produced. Mere non-production of a document, i.e., Form No. 75 in the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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