Gaurav Imperial Corporation vs State of Punjab and others

Ajay Kumar Mittal, J.—Delay in re-filing the appeal is condoned. This appeal has been filed by the assessee u/s 68(1) of the Punjab Value Added Tax Act, 2005 (in short, "the Act") against the order dated September 22, 2011, passed by the Value Added Tax Tribunal, Punjab (hereinafter referred to as "the Tribunal"), claiming the following substantial questions of law :

(i) Whether, in the facts and in the circumstances, there is any legal evidence available on record to sustain the findings of the authorities below that the appellant had brought the goods from Delhi through escape route in a situation when the goods were admittedly taken possession from within the town ?

(ii) Whether, in the facts and circumstances, there is any legal evidence to sustain the findings that the appellant attempted to evade the payment of tax by wilfully failing to file any declaration at the entry barrier can be sustained simply on some documents of weighment slips allegedly given by someone to ETO without there being any independent evidence ?

(iii) Whether, in the facts and circumstances, the respondents have failed to assign any ground to reject the stand of the appellant right from day one that the goods with vehicles were taken possession forcibly from the business premises of the dealer ?

(iv) Whether, in the facts and circumstances, the authorities below are justified in ignoring the written orders placed by the local dealer duly supported for the supply of the goods as also the account books of the dealer without proper scrutiny and hold him guilty of evasion of tax and the action is illegal and arbitrary ?

Briefly stated, the facts for adjudication of the present appeal are that during the course of checking u/s 51(7) of the Act, the vehicles bearing registration Nos. HR-38D-6827, HR-37B-8893 and PB-13H-7305 carrying iron scrap from Delhi to Mandi Gobindgarh, were intercepted by the Excise and Taxation Officer-cum-Assistant Director (Investigation), Patiala, on special information on April 29, 2008. On demand, the drivers failed to produce any document, i.e., invoice, challan, delivery note, G. R./log book or trip sheet of the goods loaded in their respective vehicles. The detaining officer recorded the statements of the drivers at the spot in which they admitted that they had loaded the goods from Delhi and had also not furnished the information with regard to the purchase of these goods at any Information Collection Centre (ICC) of the State of Punjab and had also not paid any entry tax. The detaining officer on getting suspicion regarding the genuineness of the transaction, detained the goods u/s 51(6)(b) of the Act for verification. The matter was sent to the AETC-cum-Deputy Director (Investigation), Patiala, who after having conducted inquiry, imposed a penalty of Rs. 7,18,937 u/s 51(7)(c) of the Act. Against the said penalty order, the assessee filed an appeal before the Deputy Excise and Taxation Commissioner (Appeals), who vide order dated January 28, 2011 dismissed the appeal. Feeling dissatisfied, the assessee filed further appeal before the Tribunal. The Tribunal vide order dated September 22, 2011, affirmed the orders and dismissed the appeal. Hence, the present appeal by the assessee.

The learned counsel for the appellant submitted that the Tribunal was in error in upholding the penalty levied upon the appellant on account of an attempt to evade tax. The findings are contrary to the record and are, thus, legally unsustainable.

After hearing the learned counsel for the parties, we do not find any merit in the appeal. The appellant had pleaded that there was enough stock available in the godowns and the trucks were being loaded for supplying the material to M/s. Bharat Prakash and Sons, Mandi Gobindgarh. The vehicles had been hired from M/s. Khanna Golden Transport Company for performing the transaction. Such plea did not find favour with any of the authorities below. A concurrent finding has been recorded by the authorities that the goods were loaded in three trucks bearing Nos. HR-38D-6827, HR-37B-8893 and PB-13H-7305 on the intervening night of April 28/29, 2008. The appellant had not produced any books of account before any authority to substantiate its plea of availability of stock of 123.365 tons of iron scrap in the godown. The Tribunal while confirming the finding of the authorities below with regard to an attempt to evade tax by the appellant had noticed as under : I have well-considered the rival contentions. The DETC(A) in her order dated January 28, 2011, has observed that the appellant had filed a writ petition in this case against the order imposing penalty which was withdrawn on July 29, 2007 with a liberty to approach the authorities under the law by way of filing an appeal. The value of the iron scrap was got determined by the detaining officer on the basis of prevalent market value. As per the weighment slips which were received from the informer, the weighment of vehicles PB-13H-7305 and HR-37B-8893 was carried out at Delhi on April 26, 2008, with gross weight 26.480 MT and 38.810 MT, respectively. The AETC has observed that the minor difference is due to consumption of fuel, i.e., diesel which is negligible and these are the same goods which were loaded from Delhi. The weighment slips depicting that these vehicles were also weighed at Delhi are forthcoming in the departmental file. In his order dated May 16, 2008, the AETC has observed that the dealer has failed to produce the account books or any other documentary evidence to prove the genuineness of the transaction inspite of proper opportunity given to him. It is pertinent to point out here that the account books and other documents were also not produced before the DETC(A) as emanates from her dated January 28, 2011. The appellant has not produced any evidence in proof of the fact that on April 28, 2008, he had 123.265 tons of iron scrap in his godown. In the absence of such evidence, it can be reasonably and legitimately inferred that to supply the goods in furtherance of the purchase orders, the iron scrap was arranged from some source, which has not been disclosed. There could be every possibility that it was being brought from Delhi. Statedly the firm Aman Alloys and M/s. Bharat Parkash and Sons are running their business at Mandi Gobindgarh. As alleged by the appellant, on the intervening night of April 28, 2008 and April 29, 2008, the material meant for M/s. Bharat Parkash and Sons were being loaded in trucks bearing Nos. HR-38D-6827, HR-37B-8893 and PB-13H-7305. If Mr. Ominder Singh, ETO as is being alleged had forcibly gained his entry into the premises of the appellant and after physical scuffle with the watchman and drivers of the trucks had overpowered them with the help of his team, in that eventuality, the appellant in all probabilities, would have made complaints to the departmental authorities against the said ETO.

As per paragraph No. 3, in the grounds of appeal, the appellant had dispatched the goods in four trucks bearing numbers HR-38G-7786, HR-38D-6827, HR-37B-8893 and PB-13H-7305 along with loading slips, but in the next breath, it is being alleged in paragraph number 4 of the grounds of appeal that on the intervening night of April 28, 2008 and April 29, 2008, when the material meant for M/s. Bharat Parkash and Sons was being loaded in Trucks Nos. HR-38D-6827, HR-37B-8893 and PB-13H-7305, then the aforesaid ETO after having forcibly gained his entry had scuffle with the watchman and the drivers and had overpowered them. Strangely enough that the loading process continued for two consecutive nights. The above versions being contradictory, it is very difficult to believe either. In these circumstances, the documentary evidence garnered and produced by the Department assumes greater importance and on its basis, it has to be inferred that the goods were brought from Delhi to meet the requirement of purchase orders. The information in form VAT-XXXVI was also not got generated by the drivers, whose statements available in the departmental file adequately establishes on the record that the goods have been brought to Punjab from Delhi by following escape route and without furnishing mandatory information at any ICC in Punjab State. The moment, the Department discharged its onus to establish the guilt against the appellant, the onus shifted on to the latter to rebut the presumption being drawn on the basis of the documentary evidence against him, but to his utter dismay, he has not adduced even an iota of evidence operating as rebuttal to the evidence of the Department. So, the evidence produced by the Department has to be relied upon and on its basis, it is held that the mens rea to evade payment of tax has been established.

The finding of fact recorded by the Tribunal was not shown to be erroneous or perverse in any manner which may warrant interference by this court. No question of law much less a substantial question of law arises in this appeal. Accordingly, the appeal is dismissed.