Penalty for alleged tax evasion fails where genuine transport documents and factual findings negate any attempt to evade tax.

Penalty for attempt to evade tax under the Punjab Value Added Tax Act could not be sustained where the accompanying documents were found genuine, reflecting the bill details, consignor, consignee and GR particulars. The Tribunal accepted the explanation that the route adopted was for reducing freight charges and was consistent with prior transactions. In appeal, that factual finding could be interfered with only if shown to be perverse or otherwise erroneous, and no such error was demonstrated. The penalty was therefore not justified and the finding in favour of the assessee was upheld.

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Issues: Whether penalty under section 51(7)(b) of the Punjab Value Added Tax Act, 2005 was justified on the ground of an attempt to evade tax.

Analysis: The documents accompanying the goods disclosed the bill number, value, consignor and consignee, and the GR number and date were also reflected in the invoice. The transport arrangement showed movement from Moga to Delhi via Mandi Gobindgarh for reducing freight charges, and the Tribunal accepted the explanation as consistent with prior transactions. The finding recorded was that the documents were genuine and that no attempt to evade tax was established. In an appeal under section 68 of the Punjab Value Added Tax Act, 2005, such a factual finding could be interfered with only if it was shown to be perverse or otherwise erroneous, which was not demonstrated.

Conclusion: The penalty under section 51(7)(b) was not justified and the finding in favour of the assessee was upheld.

Ratio Decidendi: A penalty for attempt to evade tax cannot be sustained where the documentary record is found genuine and the factual finding negating evasion is not shown to be perverse in appeal.

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