2020 (1) TMI 1175 - HC - VAT and Sales Tax

Transport Company Penalized for Lack of Road Permit Upheld by High Court

M/s Economic Transport Organisation Ltd., Ranchi    Versus The State of Jharkhand, The Commissioner of Commercial Taxes, The Deputy Commissioner of Commercial Taxes, The Commercial Taxes Officer, Steel Authority of India Limited, Bharat Heavy Electricals Limited,

M/s Economic Transport Organisation Ltd., Ranchi    Versus The State of Jharkhand, The Commissioner of Commercial Taxes, The Deputy Commissioner of ... Issues:1. Imposition of penalty on a Transport Company for transporting transformers without a valid road permit.2. Interpretation of Section 72 of the Jharkhand Value Added Tax Act, 2005.3. Validity of the impugned orders passed by the authorities and the Tribunal.Analysis:1. The petitioner, a Transport Company, challenged the penalty imposed by the Commercial Taxes Tribunal for transporting transformers without a valid road permit. The petitioner argued that the original road permit had expired due to a breakdown, and a new permit was not considered. The petitioner contended that since the transported goods were exempt from tax, no penalty should have been imposed. However, the Tribunal found that the petitioner failed to provide sufficient evidence regarding the road permit and the nature of the transported goods.2. The petitioner relied on Section 72 of the JVAT Act, emphasizing that check posts aim to prevent tax evasion. The State, on the other hand, highlighted the Tribunal's findings that the petitioner lacked a valid road permit during transportation. The State argued that under Section 72(5) and (6), penalties are applicable for moving goods without proper documentation. The Tribunal concluded that the transformers were taxable goods and imposed a penalty three times the tax liability, which was upheld by the authorities.3. The High Court upheld the Tribunal's decision, emphasizing the absence of a valid road permit during transportation. The Court noted that the petitioner failed to demonstrate the legitimacy of the road permit and the nature of the transported goods. The Court found no legal error in the orders passed by the authorities and the Tribunal, stating that the penalty was rightly imposed under Section 72(6) of the JVAT Act. Consequently, the writ application was dismissed, affirming the legality of the impugned orders.In conclusion, the judgment highlights the importance of compliance with documentation requirements during the transportation of goods to prevent tax evasion. The Court's decision underscores the necessity of valid permits and documents for the movement of taxable goods, ultimately upholding the penalty imposed on the Transport Company for transporting transformers without a valid road permit.