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2007 DIGILAW 1368 (PNJ)

Doraha Agro Foods v. State Of Punjab

2007-07-24

AJAY K.MITTAL, M.M.KUMAR

body2007
Judgment M.M.Kumar, J. 1. This appeal filed under Section 68 of the Punjab Value Added Tax Act, 2005 (for brevity, "the Act") is directed against the order dated September 1, 2006 (annexure A13) passed by the Value Added Tax Tribunal, Punjab, Chandigarh (for brevity, "the Tribunal"). The Tribunal has declined the prayer made by the appellant for setting aside the order dated November 2, 2005 passed by the Excise and Taxation Officer-cum-Designated Officer, Ward No. 6, Khanna, imposing tax and inflicting penalty on the appellant amounting to Rs. 2,57,795 and also upheld the assessment order dated November 2, 2005. 2. Facts in brief may first be noticed. The appellant is a firm which is engaged in the business of resale of timber and is running a sheller. It filed the return for the quarter ending June 30, 2005. The Designated Officer with a view to ascertain the correctness of return filed audited the same as per the provisions of Section 28(1) of the Act. Subsequently, the Designated Officer issued a notice under Section 28(2) of the Act for production of account books along with other related documents. There was a surprise inspection of the business premises of the appellant on June 26, 2005 and it was found that the firm had shown numerous inter-State transactions to M/s. Rudrakash Sales Corporation, Old Bus Stand, Kathua (J&K). The details of the transactions are given as under: S.No. Vat invoice No. Date Vehicle No. Value of goods CST charged at 2% Tax amount of invoice 1. 158 24.6.2005 PB 10AP 3115 265654 5373 281727 2. 159 26.6.2005 PB 29B 1195 275051 5501 288436 3. 160 24.6.2005 PB OF 9950 264239 5285 277098 3. On investigation it was found that the goods, referred in the aforementioned three transactions did not ever cross the ICC, Madhopur and a report in that regard was sent by the Assistant Excise and Taxation Commissioner, ICC, Madhopur on July 11, 2005. It was further discovered that the owner of the goods had approached the ICC, Madhopur with bill Nos. 158 to 160 to get VAT XXXVI form generated. On questioning by the T. I. on duty to disclose the vehicles carrying goods the owner left the ICC, Madhopur leaving the bills there. It was further discovered that the owner of the goods had approached the ICC, Madhopur with bill Nos. 158 to 160 to get VAT XXXVI form generated. On questioning by the T. I. on duty to disclose the vehicles carrying goods the owner left the ICC, Madhopur leaving the bills there. It was also revealed that no transit pass in respect of any such vehicles was obtained which showed that actual inter-State movement of goods had not taken place. Therefore, notice was issued to the dealer to show cause as to why these transactions be not considered as intra-State transactions and penal action under sections 56 and 57 of the Act be not taken for issuing fake invoices with the intention to evade tax. The Excise and Taxation Officer-cum-Designated Officer, Ward No. 6, Khanna vide order dated November 2, 2005 after following due process framed assessment assessing the tax liability and penalty amounting to Rs. 2,57,795 under sections 56 and 57 of the Act. The order of the Designated Officer was challenged in an appeal filed under Section 62 of the Act which was dismissed vide order dated April 19, 2006. Aggrieved by the aforementioned order, the appellant filed an appeal under Section 63 of the Act before the Tribunal. The Tribunal at the outset asked the counsel for the appellant to explain as to how the goods passed through Lakhanpur Border of Jammu and Kashmir without bills and no satisfactory reply was given and accordingly the appeal was dismissed by the Tribunal vide order dated September 1, 2006. The operative part of the order passed by the Tribunal reads as under: I have considered arguments of both the parties and have gone through the facts of the case. I have also seen the report of AETC, ICC, Madhopur wherein it has been reported that some persons tried to get three bills fed into the computer at ICC. But when he was asked to show loaded trucks against these invoices, he slipped away leaving behind these original three bills. The AETC, ICC, Madhopur has enclosed three bills and other related documents along with his report. Counsel for the appellant was asked to explain as to how the goods passed through Lakhanpur barrier of Jammu and Kashmir State without bills. Learned Counsel would not give satisfactory reply. The AETC, ICC, Madhopur has enclosed three bills and other related documents along with his report. Counsel for the appellant was asked to explain as to how the goods passed through Lakhanpur barrier of Jammu and Kashmir State without bills. Learned Counsel would not give satisfactory reply. This fact coupled with report of Municipal Committee, Phillaur that no transit pass was prepared at Municipal Committee, Phillaur proves beyond doubt the mala fide of the appellant. I am, therefore, inclined to agree with the contention of the counsel for the State that the appellant-dealer in connivance with the consignee at Kathua tried to show movement of goods to the Jammu and Kashmir State without their actual transport to reduce his liability of tax by paying two per cent under the Central Sales Tax Act, 1956 instead of 12.5 per cent under the State Act. Therefore, levy of tax and penalty under Section 56 is upheld. Penalty of Rs. 5,000 under Section 57 of the Punjab Value Added Tax Act does not appear to have been levied with proper application of mind and is, therefore, set aside. 4. We have heard Shri K. L. Goyal, learned Counsel for the appellant who has claimed that numerous questions of law would arise for our determination. He has referred to four questions framed by him in para 5 which read as under: (i) Whether there are any basis for the finding given by the Tribunal that appellant-dealer has connivanced with the purchasing dealer of Jammu and Kashmir State ? Whether the findings as such are on surmises and conjectures and therefore not sustainable in the eyes of law ? (ii) Whether there are any basis to give a finding that the movement of goods has not taken place from Punjab State and therefore tax is payable under the provisions of the Punjab VAT Act ? (iii) Whether the action of the authorities imposing the penalty under Section 56(c) of the Act is justified in any manner, when the appellant has not concealed any transaction of sale and purchase in his accounts book ? (iv) Whether, on the facts and circumstances of the case, the order, annexure A13, passed by the Tribunal is patently perverse in nature and therefore liable to be quashed ? 5. (iv) Whether, on the facts and circumstances of the case, the order, annexure A13, passed by the Tribunal is patently perverse in nature and therefore liable to be quashed ? 5. Having examined the aforementioned questions in the light of the arguments raised by the learned Counsel for the appellant, we are of the view that in fact no substantive question of law would arise for our determination for the reason that all these questions are pure questions of fact. It has been categorically found by the first appellate authority as well as by the Tribunal that a novel devise was invented by the appellant to avail tax benefits as he went to the data entry operators window at ICC, Madhopur along with three bill Nos. 158 to 160 and tried to get ST XXXVI form generated. On questioning by the T.I. at the barrier about the vehicles loaded with goods the owner left three original invoices along with other documents at ICC, Madhopur and fled away. He never returned to claim those original invoices and other documents. Once these are the findings of fact then it is not understood as to how a substantive question of law within the meaning of Section 68(2) of the Act would arise for our determination. A glance at the first question of law sought to be raised would highlight that the question is based on presumptions which are contrary to the findings of fact recorded. There is ample evidence on record to show that the appellant made an unsuccessful attempt at ICC, Madhopur to generate ST XXXVI form when he went to the data entry operators window along with bill Nos. 158 to 160 in respect of which claim has been made for granting concession in tax at two per cent. Similar is the position with regard to question No. (ii) which proceeds contrary to the finding that the appellant was not able to show to the authorities at ICC, Madhopur that those three bills were in respect of trucks loaded with goods. The second question would not arise because it seeks to raise the issue that there is no basis to record finding that the movement of goods did not take place from Punjab State to Jammu and Kashmir. There is ample evidence on record to show that no goods vehicles could be connected to the bill Nos. The second question would not arise because it seeks to raise the issue that there is no basis to record finding that the movement of goods did not take place from Punjab State to Jammu and Kashmir. There is ample evidence on record to show that no goods vehicles could be connected to the bill Nos. 158 to 160 in respect of which claim for concession of tax has been made. The findings are based on evidence. We cannot while adjudicating a question of law examine the adequacy of evidence and by re-appreciating evidence reach a conclusion different than the one recorded by the Tribunal. Similar would be the position with regard to other two questions. Therefore, we find that the appeal is wholly misconceived and does not warrant admission. 6. For the reasons recorded above, this appeal fails and the same is dismissed.