TMI Blog2023 (5) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... l for the assessee-appellant had stated that he had wrongly claimed ITC on items bearing Nos. 41 to 59 as mentioned in Form VAT-24 and customer-wise summary. In view of the said fact, the appellant was not held entitled to claim ITC on the said items - Once, the assessee had himself admitted his mistake, whether penalty of Rs. 16,02,484/- under Section 56 of the Act can be imposed along with interest of Rs. 5,52,857/-. On this issue, reference can be made to a judgment passed by in COMMISSIONER OF INCOME-TAX VERSUS RELIANCE PETROPRODUCTS PVT. LTD. [ 2010 (3) TMI 80 - SUPREME COURT ] , wherein, Hon ble the Supreme Court was examining a case of imposition of penalty under Section 271 (1) (c) of the Income Tax Act. The assessee had claimed incorrect expenditure in his return. In that case, it was held that Tribunal, as well as, the Commissioner of Income-tax (Appeals) and the High Court have correctly reached this conclusion as where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not sustainable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny mens-rea on the part of the appellant? (iii) Whether on the facts and in the circumstances of the case, the Ld. Tribunal was justified in upholding the charging of interest when there is no mens-rea on the part of the appellant and tax has been paid as per returns? Brief facts of the case are that the assessment of the appellantassessee for the year 2006-07 was framed by the Designated Officer vide order dated 28.07.2010 creating an additional demand of Rs.29,64,583/- on the following grounds:- (i) levying tax on sale of old cars. (ii) Disallowance of ITC availed on sundry items i.e. machinery repair, generator repair, computer repair, fans for office, stationery items, which were purchased against cash memo/retail invoices. (iii) non inclusion of freight in GTO and avoidance of payment of tax. (iv) non reversal of ITC on account of losses or pilferage. Against the said order, the appellant filed an appeal before the Deputy Excise and Taxation Commissioner (Appeals), Patiala, which was dismissed vide order dated 20.12.2010. This order was challenged by the appellant before the Tribunal. Vide order dated 12.09.2011, the Tribunal remanded th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e list of Tax Free Goods (Schedule B of PVAT Act, 2005). Learned counsel for the appellant has argued that the Tribunal has ignored the definition of business as given in Section 2 (c) of the Punjab VAT Act, 2005 and has wrongly relied upon notification No. SO 50/PA.8/2005/S.8/2006 by which, sale of Pre-owned Cars was made taxable. He has further argued that at the time of purchase of old cars, the appellant had suffered sale tax, which the assessee as a buyer was bound to pay. The old cars were never held by the assessee for the purpose of sale or purchase, but they were for used for carrying out his business transactions. The sale was carried to get rid of the old vehicles having regard to lapse of time and their wear and tear. As per Entry No.60 in Schedule B, the intent of the legislature was to tax persons, who are exclusively dealing in the sale of old cars only. He has referred to the judgments passed in State of Gujarat vs. Raipur Manufacturing Co. Ltd., (1967) 19 STC 1; M/s Moraji Brothers (Import Export) P. Ltd. vs. State of Maharashtra, (1955) 99 STC 117 and M/s Panacea Biotech vs. Commissioner Trade Tax, (2013) 44 PHT 166 (Del). In Panacea Biotech Ltd. s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds, and the fact that unserviceable goods are sold and not stored so that badly needed space is available for the business of the assessee also does not lead to inference that business is intended to be carried on in selling those goods. The contention on behalf of the State in respect of the first part of the turnover for 1964-65 therefore fails. With respect to the second part of the turnover the question, whether the amendments in 1964 to the definition of business and casual trader are directly applicable has to be considered. It will be observed that under the definition of business even commercial transactions carried on without a motive to make gain or profit, or whether or not any profit accrues from such activity are included in that definition. The amended sub clause (ii) also includes with that definition transaction in connection with or incidental or ancillary to such trade, manufacture or adventure or concern. The question is, whether the word such in sub-clause (ii) of clause (d) of Section 2 refers to the trade etc. defined in sub-clause (i). It was contended before the Madras High Court that it is not so and that incidental or ancillary ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had stated that he had wrongly claimed ITC on items bearing Nos. 41 to 59 as mentioned in Form VAT-24 and customer-wise summary. In view of the said fact, the appellant was not held entitled to claim ITC on the said items. Once, the assessee had himself admitted his mistake, whether penalty of Rs. 16,02,484/- under Section 56 of the Act can be imposed along with interest of Rs. 5,52,857/-. On this issue, reference can be made to a judgment passed by in Commissioner of Income Tax, Ahmedabad vs. Reliance Petroproducts Private Limited, (2010) 11 Supreme Court Cases 762, wherein, Hon ble the Supreme Court was examining a case of imposition of penalty under Section 271 (1) (c) of the Income Tax Act. The assessee had claimed incorrect expenditure in his return. In that case, it was observed as under:- 9. As against this, Learned Counsel appearing on behalf of the respondent pointed out that the language of Section 271(1)(c) had to be strictly construed, this being a taxing statute and more particularly the one providing for penalty. It was pointed out that unless the wording directly covered the assessee and the fact situation herein, there could not be any penalty under t ..... 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