Rakesh Garg, J. - (1.) THE assessee has filed the present appeal under Section 68 of the Punjab Value Added Tax Act, 2005 against the order of the Tribunal in Appeal No. 59 of 2007 -08 (VAT) decided on October 30, 2007 (annexure P9) raising the following substantial questions of law: (i) Whether there is any mens rea on the part of the appellant to evade the payment of tax for which the penalty can be imposed under Sections 56 and 60 of the Act? (ii) Whether penalty under Section 56 of the 2005 Act can be imposed only where the designated officer records his satisfaction that there is concealment on part of the assessee/dealer and such concealment is with an intention and/or in order to evade or avoid payment of tax? (iii) Whether issuing the show cause notice qua the penalty specified in the notice is required before such penalty can be imposed actually after inspection of records, etc., by the designated officer as envisaged under Section 61 of the VAT Act read with Rule 50(1)(c) of the VAT Rules 2005? (iv) Whether the notice to show cause under Rule 50(1)(c) would require specifying the provisions under which the penalty is proposed to be imposed as also the quantum of the penalty to be imposed? (v) Whether, on the facts and in circumstances of the case, tax can be claimed on account of a bona fide omission of a particular purchase being reflected in the quarterly returns when no purchase tax is payable under the VAT Act in respect of the said item? (vi) Whether, on the facts and in the circumstances of the case, penalty can be imposed in respect of a bona fide omission in the quarterly returns filed by the assessee as prepared by his accountant when it was the first year of the new enactment coming into force and there being no mens rea to evade or avoid payment of tax on the part of the assessee? (vii) Whether, on the facts and in the circumstances of the case, penalty can be imposed, on a harmonious reading of Rules 36 and 40 of the Punjab VAT Rules, 2005, for a bona fide omission of a particular entry in quarterly returns filed under Rule 36 before the filing of annual statement filed under Rule 40 of the said Rules? (viii) Whether the appellate authorities are required to deal and give a finding on each of the contentions raised on behalf of the appellant? (ix) Whether, on the facts and in the circumstances of the case, penalty upon the dealer can be imposed in view of the settled law of the honourable Supreme Court as, 118 ITR 236 (sic) and, [1970] 25 STC 211 Hindustan Steel Ltd. v. State of Orissa? (x) Whether the first appellate authority is, in the facts and circumstances of the case, under legal duty to satisfy himself regarding the disputed questions of facts in the impugned order by summoning the records of the case and other means? (xi) Whether penalty, in the facts and circumstances of the case, can be imposed for bona fide omission in quarterly returns when there is no such omission in the annual statement duly filed under Rule 40 of the VAT Rules, 2005?
(2.) THE appellant is a dealer registered under the provisions of the Punjab Value Added Tax Act, 2005 (hereinafter referred to as "the VAT Act, 2005") and is engaged in the business of purchase and sale of bed sheets, blankets, etc., having its place of business at Moga, District Moga. The appellant filed his four quarterly returns under the VAT Act, 2005 during the year 2005 -06. During the course of scrutiny of returns, it was noticed by the Designated Officer -cum -Excise and Taxation Officer, Moga that the dealer/assessee had made purchases of bed sheets and blankets, etc., from outside the State of Punjab and after comparing the data of inter -State purchases available in computer system of the department it was found that the dealer has omitted to reflect in returns, purchases worth Rs. 4,85,024. Accordingly, a notice was issued to the dealer on September 13, 2006 for verifying the facts. Sh. Chamkaur Singh, proprietor of the firm appeared on September 14, 2006 and was confronted with the facts of non -showing of ICC data in returns. He requested for an adjournment to reconcile the data and the case was adjourned to September 29, 2006. On September 29, 2006, the assessee was present with his counsel when they were asked to explain reasons for non -showing of inter -State purchases worth Rs. 4,85,024 in their returns/accounts. However, they were unable to explain the same and therefore, it was brought to their notice that their action amounts to suppression of purchases made by the dealer/assessee and the same is liable for imposition of penalty/tax at the prevailing rate. The dealer/assessee who were unable to give any suitable explanation for the lapse on his part and action, requested for the adjournment. The case was adjourned to October 6, 2006. On the said date, the proprietor Sh. Chamkaur Singh along with his Advocate Sh. V.K. Bansal was present and when they were asked to explain the reasons for non -showing the amount of purchases in their returns, they admitted that it was a lapse on their part and requested for taking a lenient view while imposing tax/penalty.
(3.) IN view of the above admission of the assessee, he was assessed. The relevant part of the order of the assessing officer is reproduced hereinafter below: I have gone through the facts of the case. The dealer has failed to reflect the inter -State purchases of goods worth Rs. 4,85,024 in his account books/returns for the year 2005 -06. The dealer has no satisfactory explanation in his defence and admitted his fault. From the foregoing discussions, it is clear that the dealer has suppressed his purchases worth Rs. 4,85,024 and resultantly sales have also been suppressed. Keeping in view the circumstances of the case, the case is provisionally assessed as under: Inter -State purchases not shown in returns is treated as suppressed purchases : Rs. 4,85,024 Tax at four per cent : Rs. 19,401 Penalty under Section 56 of Punjab VAT Act : Rs. 38,802 Penalty under Section 60 of Punjab VAT Act : Rs. 2,000 Total : Rs. 60,203 Total due : Rs. 60,203 Issue TDN and challan form for Rs. 60,203 along with a copy of this order. Sd/ -(Jagtar Singh)Designated Officer -cum -Exciseand Taxation Officer, Moga.;