Rakesh Garg, J. - (1.) THE assessee has filed the present appeal challenging the order of the Sales Tax Tribunal, Punjab, Chandigarh dated November 28, 2005 raising the following substantial questions of law: (i) Whether in the facts and in the circumstances of the case, the learned Tribunal is justified to treat the sale of Silair air -bubble film as sale of 'packing material' and therefore taxable at the first stage of sale under Section 5(1A) of the Punjab General Sales Tax Act, 1948? (ii) Whether in the facts and in the circumstances of the case, the learned Tribunal is justified to uphold the imposition of penalty under Section 10(6) and levy of interest under Section 11D of the PGST Act, 1948, when there was no default under Section 10(4) of the Act ibid ? (iii) Whether the imposition of penalty as upheld by the Tribunal can be justified when there was no mens rea on the part of the appellant -dealer?
(2.) THE brief facts of the case are that the appellant is a registered dealer under the sales tax laws and is engaged in the business of packing material, ice, etc. The appellant filed four requisite returns under the Punjab General Sales Tax Act, 1948 for the assessment year 2002 -03. Not satisfied with the returns filed by the dealer -assessee, a notice under Section 11(2) of the Act was issued for framing assessment. In response to the said notice, the assessee along with his advocate appeared and also produced account books from time to time. During the scrutiny of purchase bills it was found that the assessee -appellant has purchased packing material, i.e., Silair air -bubble film from M/s. The Supreme Industries Ltd., Gwalior (MP). The assessee was liable to pay tax at the rate of four per cent for the said packing material at first stage within the State being the first seller after import as per notification dated February 23, 2002. However, the dealer -assessee has failed to discharge his tax liabilities. It was also found that he has returned sales worth Rs. 20,74,895.67 as sales to registered dealers under Section 5(2)(a)(ii) and has not paid the tax due. A notice dated April 23, 2003 was served upon the assessee giving him reasonable opportunity of being heard. The appellant -assessee in his written reply dated April 28, 2003 stated that he deals in resale in Silair air -bubble film which is taxable at last stage under the category of general goods and, therefore, no penal action or interest can be imposed upon the appellant. The Assessing Officer vide his order dated April 30, 2003 rejected the claim of the appellant and taxed the goods, i.e., Silair air -bubble film worth Rs. 20,74,895.67 at first stage at the rate of four per cent. The Assessing Officer also imposed penalty under Sections 10(6), 11D and 23 of the Punjab General Sales Tax Act, 1948. The appeal filed by the appellant was dismissed by the Appellate Authority vide order dated April 16, 2004. However, while dismissing the appeal the quantum of penalty imposed under Section 10(6) of the Act was reduced to Rs. 20,000.
(3.) THE assessee -appellant filed further appeal challenging the abovesaid order of the Deputy Excise and Taxation Commissioner (A), Patiala before the Sales Tax Tribunal, Punjab, Chandigarh. The Tribunal vide impugned order dated November 28, 2005 dismissed the appeal filed by the appellant while holding that the goods sold by the appellant, i.e., Silair air -bubble film was a packing material and the same was taxable at the first stage at the rate of four per cent. We have heard learned Counsel for the parties and perused the record.;