State of Punjab & Anr. v. M/s PC Traders, Bazar Bansa, Jalandhar City

Present: Mr. Piyush Kant Jain, Addl.A.G.Punjab for the appellants. Adarsh Kumar Goel,J.

The revenue has preferred this appeal under Section 68 of the Punjab Value Added Tax Act, 2005 against the order dated 2.6.2008 passed by Chairman, VAT Tribunal, Punjab accepting the appeal (VAT) No.16 of 2008-09 of the respondent filed under section 63 of the Act, proposing to raise following substantial questions of law:-

i) Whether by not mentioning complete particulars of the goods in the column of Description of goods in the retail Invoice, the selling and purchasing dealer could evade tax of their respective States? VATAP No.65 of 2008 2 ii) Whether the orders passed by the learned VAT Tribunal Punjab deserves to be quashed in view of the fact that complete particulars of the goods loaded in the vehicle were not mentioned in the column of description of goods in the retail invoice? iii) Whether the penalty order dated 6.7.2006 is sustainable in law because complete description of the goods was not mentioned in the retail invoice by the selling dealer and in its absence, Form VAT 36 would remain incomplete? iv) Whether the order of the learned Tribunal, holding that the matter should have been referred to the Assessing Authority, in case there was suspicion to the designated Officer that the dealer was not paying tax correctly on the sale of the goods, is sustainable in law? v) Whether the ETO has rightly imposed penalty by passing an ex parte order when the respondent had not produced account books or any other evidence to prove the genuineness of the transaction inspite of giving opportunities?

The vehicle of the assessee was intercepted at the Check Post and enquiry was held about the valuation of goods. It was observed that the invoice did not carry adequate description of the goods. However, after enquiry, it was found VATAP No.65 of 2008 3 that there was no under valuation. The matter was referred to the Designated Officer who imposed penalty. The said view was affirmed by the appellate authority. On appeal, the Tribunal set aside the penalty with the following observations:-

Here is a case where the goods were described in the bill, as 3853 sawn pieces. Size of the pieces had been mentioned. In the GR also, sawn with number of the pieces and word timber had been written. Merely because the quality of the goods i.e. timber was not further mentioned, it will not give power to the authorities at the ICC to suspect the genuineness of the transaction and come to the conclusion that there was an attempt to evade tax. If there was any data available at the ICC in respect of the present appellant and there was any suspicion to the Designated Officer that the dealer was not paying tax correctly then the matter should have been referred to the assessing Authority of the appellant especially when TIN number of the appellant was mentioned in the bill itself. Under the circumstances of the case, action under section 51(7)(b) of the Act was not permissible especially when bill and GR was there with the driver. The matter should have been reported to the Assessing Authority of the appellant to take appropriate action, if any.

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We have heard learned counsel for the revenue. Only contention put forward is that since in the invoice, adequate description was not given, inference of evasion was rightly drawn.

We are unable to accept the submission. If after enquiry, it was found that there was no undervaluation, the suspicion could not be thereafter a ground to impose penalty. We find that the Tribunal has given a finding of fact in the facts and circumstances of the case, which cannot be held to be perverse.