Penalty under the Punjab VAT law set aside where genuine documents and no tax evasion were found.

Penalty under Section 51(7)(b) of the Punjab Value Added Tax Act, 2005 was held unsustainable because the Tribunal found genuine documents, voluntary reporting at the information collection centre, payment through banking channels, and only a clerical or human error in the consignee's name. The Tribunal also found no material showing that the goods were intended to be kept out of account or that there was any attempt to evade tax. Those findings were neither perverse nor illegal, and no substantial question of law arose; the departmental appeal failed.

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Issues: Whether the penalty imposed under Section 51(7)(b) of the Punjab Value Added Tax Act, 2005 was justified on the facts found by the Tribunal.

Analysis: The Tribunal found that the goods were accompanied by genuine documents, the transaction was voluntarily reported at the information collection centre, payment was made through banking channels, and the entry error in the consignee's name was only a clerical or human mistake. It further held that there was no material to show that the goods were meant to be kept out of account or that there was any attempt to evade tax. Those findings were not shown to be perverse or illegal, and no substantial question of law arose in the appeal.

Conclusion: The penalty was not sustainable and the departmental appeal failed.

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