Ramsons vs State of Punjab

Ajay Kumar Mittal, J.—The assessee-dealer has filed this appeal u/s 68 of the Punjab Value Added Tax Act, 2005 (hereinafter referred to as, "the Act") against the order dated April 28, 2011, annexure A14, passed by the Punjab VAT Tribunal (in short, "the Tribunal") in Appeal No. 252 of 2010; claiming following substantial questions of law:

(1) Whether or not under the circumstances of the case, the appellant has made any attempt to evade tax and thus liable for penalty u/s 51(7)(c) of the Punjab VAT Act, 2005 ?

(2) Whether or not under the circumstances of the case, mere negligence of the driver to obtain transit slip u/s 51(4) of the Punjab VAT Act, 2005 is sufficient ground to impose penalty u/s 51(7)(c), in the absence of any attempt to evade tax and opting for a longer route ?

(3) Whether or not under the, circumstances of the case, penalty u/s 51(7)(c) of the Punjab VAT. Act, 2005 can be imposed without making any proper, enquiry?

(4) Whether or not under the circumstances of the case, the order passed by the honourable Punjab, VAT Tribunal is non-speaking and not in conformity with the principles of natural justice ?

(5) Whether or not under the circumstances, penalty u/s 51(7)(c) of the Punjab VAT Act 2005 can be imposed merely upon presumptions without establishing attempt to evade tax ?

(6) Whether or not under the circumstances of the case, penalty can be imposed especially when the entire payment is routed through bank and major portion of payment is made in advance through bank for same transaction ?

Brief facts as narrated in the appeal may be noticed. The appellant is a partnership firm and is registered under the provisions of the Delhi Value Added Tax Act at New Delhi. It is running a house of dairy products. It purchased ghee from Health Aid Food Specialist Private Limited, Airport, Amritsar, to the tune of Rs. 2,20,09,009 for the period from April 1, 2009 to March 31, 2010. On September 5, 2009, the appellant out of this stock sold 350 tins of desi ghee to M/s. Jay Pee Traders, Lower Raghunath Bazar, Jammu. The bill bearing Number 321 dated September 5, 2009 was issued by Ramson''s, Karol Bagh, New Delhi in favour of M/s. Jay Pee Traders, Jammu along with GR bearing No. 488825 dated September 5, 2009 by M/s. Patiala Freightways (Regd.). However, the goods could not be dispatched on September 5, 2009 to the consignee at his instructions as he had requested to dispatch the same in the week of October 2009. However, the goods were finally dispatched on October 1, 2009 and reached Amritsar instead of Jammu on October 2, 2009. The goods were brought to Amritsar instead of Jammu because there was no direct transportation service available for Jammu from the transport company which was hired for transportation of the goods. The goods were found lying in the godown of M/s. Indian Cargo Booking Agency (Patiala Freightway Regd.), Amritsar, when these were seized by the office of Civil, Surgeon, Amritsar, on October 13, 2009. On checking of the documents by the Excise and Taxation Officer, Amritsar, it was found that the goods were meant for trade and were dispatched from New Delhi to Jammu but transit slip was not with the goods. The mandatory information as required u/s 51(4) of the Act was not furnished at the Information Collection Centre of Punjab, while entering into the limits of State of Punjab. Accordingly, penalty of Rs. 5,90,835 was imposed vide order dated November 10, 2009, annexure A7, by the Assistant Excise and Taxation Commissioner, Amritsar. Feeling aggrieved, the appellant filed an appeal before the Deputy Excise and Taxation Commissioner (Appeals), Jalandhar Division, Jalandhar on March 12, 2010, annexure A9, which was rejected vide order dated May 6, 2010, annexure A10. The second appeal filed by the appellant before the Tribunal was also dismissed vide order dated April 28, 2011, annexure A14. Hence this appeal by the assessee.

The learned counsel for the appellant submitted that the assessing authority was in error in imposing penalty u/s 51(7)(c) of the Act on the ground that the assessee had attempted to evade tax. He submitted that the goods were sent by the assessee-dealer from Delhi and the destination was M/s. Jay Pee Traders, Jammu and in such a situation, there was no loss of revenue to the State of Punjab as in fact no tax was payable in Punjab being only transit State.

After hearing counsel for the appellant, we do not find any merit in the appeal.

The Tribunal recorded that the goods were booked on September 5, 2009 at Delhi and the same were lying in the booking agency on October 26, 2009. The goods were not dispatched immediately and the same were found at Amritsar which was not the route from Delhi to Jammu. The assessee-dealer was unable to give explanation much less satisfactory about the goods which were found at Amritsar as to in what circumstances, the transporter preferred to go via Amritsar. Under the circumstances, the Tribunal recorded that there was possibility of goods being disposed of at Amritsar and there was attempt to evade tax. Accordingly, the penalty imposed by the assessing authority and the appellate authority was upheld by the Tribunal.

It would be apposite to refer to the findings recorded by the Tribunal on this issue, which are as under:

The goods were booked on September 5, 2009. These were found lying in the booking agency on October 26, 2009. Desi ghee is not such a commodity, which is not easily available in the common market. If the goods were required in the month of October, then the purchaser should have stopped the seller from dispatching the same before commencement of the said month. If such instruction had really been given, the appellant would have not dispatched the goods in the first week of September. In annexure II, it has been mentioned that the goods be dispatched in the end of September or first week of October 2009 and if the same have been sent to the Transporter, the same be held at Transporter''s godown. This document does not bear any reference number. The date mentioned on it is September 5, 2009. If this document had been in existence on September 5, 2009, the goods would have not been dispatched immediately. In annexure II, Jay Pee Traders nowhere says that due to non-availability of space with it, the goods be not sent prior to the end of September or first week of October. If Jay Pee Traders could afford to pay excess freight to the transporter for keeping the goods in his godown, they could also make arrangement to store the same at some safer place at Jammu. They could also conceive the possibility of contents of tins of desi ghee being tampered with, if allowed to be kept for a sufficient period in the godown of the transporter. The possibility of the goods being disposed of at Amritsar or reuse of the invoice cannot be ruled out. It is astounding that the buyer had agreed to pay excess freight for keeping the goods in the godown of the transporter at Amritsar. In Punjab Tractors Limited (supra), the chassis and engine numbers of the tractors had tallied with the particulars given in the invoices, but herein, there is nothing on the record to show that the goods lying in the godown are the same, which were dispatched from Delhi. There does not seem to be any identification mark to hold that the goods lying in the godown do conform to the bill. There is no dispute with the proportion that mere non-reporting at the ICC does not warrant imposition of penalty when the documents are genuine and proper, but here in this case, the documents do not cover the transaction. The challan containing a note that the goods were to be reloaded from Amritsar was not produced before the authorities at any stage. The possibility of such a note having been incorporated in annexure III after detention of the goods cannot be ruled out. This note appears to be post-script. If there had been such note on the challan, it would have certainly been produced before the authorities below. It was only the transit slip which would have forced the transporter to exit the goods within 48 hours from the State of Punjab, i.e., an intervening or transit State. In the absence of transit slip, it is very difficult to say that the detained goods are the same which are covered by the invoice. In Sodhi Transport Co. and others Vs. State of U.P. and others, , the honourable Supreme Court while interpreting the U.P. Sales Tax Act, 1948 and the Rules framed thereunder held that the words contained in section 28B, ''Failing which it shall be presumed that the goods carried thereby have been sold within the State by the owner or person in-charge of the vehicle'' only require the authorities concerned to raise a rebuttable presumption that the goods have been sold in the State, if the transit pass is not handed over to the officer at the check-post or the barrier near the place of exit from the State. In the present case, no reason has been assigned for not getting the transit slip generated. The authorities sought to be relied upon by Dr. Naveen Rattan are inapplicable to the facts of this case.

No illegality or perversity could be demonstrated in the findings of fact recorded by the assessing authority and also the appellate authorities. Accordingly, no substantial question of law arises in this appeal and the same is dismissed.