Inter-State sale exemption and evasion penalty turn on unresolved facts about timing, title transfer and movement of goods.

Remand was upheld because the record did not conclusively establish exemption on undisputed facts, and further evidence was needed on the true nature, timing and documentation of the sales and movement of goods. Exemption under section 6(2) of the Central Sales Tax Act, 1956 was not shown on the existing record because the second sale had not been clearly proved to occur during movement of the goods and after the first inter-State sale. Penalty could still operate under section 51(7)(b) of the Punjab Value Added Tax Act, 2005 where the material suggested possible evasion of tax due or likely to be due, even if no tax was presently payable under the State Act.

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Issues: (i) whether the remand by the first appellate authority and its affirmation by the Tribunal was justified in the facts of the case; (ii) whether the claimed second sale satisfied the conditions of exemption under section 6(2) of the Central Sales Tax Act, 1956; (iii) whether penalty could be sustained under section 51(7)(b) of the Punjab Value Added Tax Act, 2005 despite the contention that no tax was payable under the State Act.

Issue (i): whether the remand by the first appellate authority and its affirmation by the Tribunal was justified in the facts of the case.

Analysis: The record did not conclusively establish the transaction as exempt on undisputed facts. Material questions remained as to the true nature and timing of the sales, the effect of the invoices and lorry receipt, and whether further evidence was needed. A remand was therefore appropriate and protected the appellants' opportunity to establish their case.

Conclusion: The remand was justified and rightly upheld.

Issue (ii): whether the claimed second sale satisfied the conditions of exemption under section 6(2) of the Central Sales Tax Act, 1956.

Analysis: Section 6(2) applies only where there is a prior inter-State sale occasioning movement of goods and a subsequent sale during that movement effected by transfer of documents of title to a registered dealer. While the first sale could be treated as one occasioning movement from Rajasthan to Punjab, the second sale raised unresolved factual questions. The record did not clearly show that the sale to the later purchaser was subsequent to the first sale and during the movement of the goods. The marking on the goods and the simultaneous dates of the invoices supported the need for evidence on these aspects.

Conclusion: Exemption under section 6(2) was not established on the existing record.

Issue (iii): whether penalty could be sustained under section 51(7)(b) of the Punjab Value Added Tax Act, 2005 despite the contention that no tax was payable under the State Act.

Analysis: The penalty provision is attracted where there is an attempt to avoid or evade tax due or likely to be due under the Act. It is not confined to tax already payable under the Punjab Act alone. A misdeclaration affecting the value and character of the consignment could justify inquiry into evasion and penalty, and the question whether the requisite intention existed remained open for determination on remand.

Conclusion: The penalty provision could operate notwithstanding the argument that no tax was directly payable under the Punjab Act.

Final Conclusion: The appellate challenge failed, the remand order was sustained, and the matter was left to be decided afresh by the assessing authority without being influenced by earlier observations.

Ratio Decidendi: A remand is justified where exemption under section 6(2) of the Central Sales Tax Act, 1956 depends on unresolved factual questions about the sequence and timing of sales and movement of goods, and a penalty provision can be invoked for an attempt to evade tax likely to be due even if no tax is presently payable under the State enactment.

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