M.M. Kumar, J. - (1.) This appeal filed under Sec. 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 Sec. 28(1) of the Act. Subsequently, the Designated Officer issued a notice under Sec. 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. Vat invoice Value of CST charged Tax amount No. No. Date Vehicle No. goods at 2% 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 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 Ss. 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 Ss. 56 and 57 of the Act. The order of the Designated Officer was challenged in an appeal filed under Sec. 62 of the Act which was dismissed vide order dated April 19, 2006. Aggrieved by the aforementioned order, the appellant filed an appeal under Sec. 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. 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 Sec. 56 is upheld. Penalty of Rs. 5,000 under Sec. 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.;