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of <h1>Penalty under Act 2000 limited to false documents; GST Act penalties not applicable for Entry Tax cases</h1> HC held that once it was admitted that the goods seized were liable to Entry Tax under the Act of 2000, no proceedings under the GST Act or the Act of ... Power and entitelment appeal versus power to levy penalty - Applicability of provisions of GST Act for the prior acts of erstwhile repealed acts - of Exercise of power so long as the power does exist and can be traced to a source available in law - Source of power is not specifically referred to or a reference is made to a wrong provision of law - Invocation of of section 67 (1) (o) of the J&K VAT Act, 2005 - section 17 (1) (o) of the J&K GST Act, 1962 is pari-materia to section 69 (1) (o) of the J&K Vat Act, 2005 or not - HELD THAT:- Once it is conceded by the Petitioners that the goods seized by the authorities at Lower Munda Check Post were leviable to Entry tax Under Section 4 of the Act of 2000, no proceedings should have been initiated, either under the GST Act or the Act of 2005. From careful reading of Section 6 of the Act of 2000, it is abundantly clear that the provisions of the GST Act or, for that matter, the Act of 2005 do apply to the proceedings under the Act of 2000, but their application is limited to the provisions relating to appeal, revisions, Appellate Tribunal, power to withdraw and transfer cases, recovery of fines, taxes or penalties, etc., etc. The procedural provisions of the GST Act, of which reference is made in Section 6 of the Act of 2000, have been applied to the proceedings under the Act of 2000 mutatis mutandis and, therefore, shall be deemed to be part of the Act of 2000 by reference. The provisions of Section 69 (1) (o) of the Act of 2005 and the provisions of Section 17 (1) (o) of the GST Act have, thus, not been made part of the Act of 2000. In short, the only provisions which are adopted mutatis mutandis for the proceedings under the Act of 2000, in terms of Section 6 of the Act of 2000, are either those which pertain to the right of appeal and revision and the forums for hearing such appeals and revisions or to the provisions providing for recovery and refund of fines, taxes and penalties imposable under the Act of 2000. Since, no penalty is imposable under the Act of 2000 for bypassing the Commercial Taxes Check Post simplicitor, as such, Section 6 of the Act of 2000 cannot be interpreted to create a provision of penalty which otherwise does not exist in the Act of 2000. It is, thus, trite that penalty, being a liability and a sort of additional tax, requires constitutional mandate for its imposition. Article 265 of the Constitution of India provides that no tax shall be levied or collected, except by authority of law. It is, thus, well settled that the penalty is like addition tax and can only be charged or levied by a substantive ‘Charging Section’. In the instant case, Section 4 of the Act of 2000 is a standalone ‘Charging Section’ dealing with imposition of penalty and provides for its imposition only if the documents accompanying the taxable goods are found false and forged with regard to particulars containing therein. Section 6 of the Act of 2000 is merely a ‘Machinery Provision’ that is by reference to GST Act/ Act of 2005. There may be lacuna in the Act of 2000, but the Court has to interpret and apply the provisions of the Statute as they stand. We also find it little anomalous that a person, who violates law and does not report the concerned Check Post for verification of the documents and the goods, is not held liable for any penalty and would be let off only by payment of the Entry Tax leviable under the Act of 2000. This was something for the Petitioners herein to ponder over and take remedial measures, if they so deemed it fit - However, in the instant case, the debate on the various provisions of the GST Act and the Act of 2005 was totally uncalled for and the forums below were unnecessarily kept engaged on the issues that never arose for determination in the proceedings. There are no merit in the petition - petition dismissed. ISSUES: Whether findings of the Appellate Tribunal are perverse when the source of power is not specifically referred to or a wrong provision of law is cited, but the power exists and can be traced to a legal source.Whether invoking Section 67(1)(o) of the J&K VAT Act, 2005 instead of Section 17(1)(o) of the J&K GST Act, 1962 by the Assessing Authority vitiates the order and proceedings, considering the pari materia nature of these provisions.Whether penalty can be imposed under the Jammu & Kashmir Entry Tax on Goods Act, 2000 for bypassing the Commercial Taxes Check Post when no provision explicitly authorizes such penalty.Whether procedural provisions of the Jammu & Kashmir General Sales Tax Act, 1962 apply mutatis mutandis to the Entry Tax Act, 2000, including penalty provisions under other statutes.The constitutional validity and statutory requirements for imposing penalty under tax legislation, specifically the necessity of a substantive 'Charging Section' for penalty imposition. RULINGS / HOLDINGS: The Tribunal's findings are not perverse merely because the source of power was not specifically cited or a wrong provision was referenced, so long as the power 'does exist and can be traced to a source available in law.'Invoking Section 67(1)(o) of the VAT Act, 2005 instead of Section 17(1)(o) of the GST Act, 1962 does not vitiate the proceedings because these provisions are pari materia, as per Supreme Court precedent.Penalty for bypassing the Commercial Taxes Check Post cannot be imposed under the Entry Tax Act, 2000, as the only penalty provision under Section 4(3) applies exclusively to carrying goods with fake or false documents, which was not the case here.Section 6 of the Entry Tax Act, 2000 applies the provisions of the GST Act relating only to appeals, revisions, tribunals, recovery of fines, taxes or penalties, and procedural powers mutatis mutandis; it does not incorporate substantive penalty provisions such as Section 69(1)(o) of the VAT Act or Section 17(1)(o) of the GST Act.Penalty is a statutory liability that requires a substantive 'Charging Section' in the statute to create such liability; procedural or machinery provisions cannot be construed to create or impose penalty liability. RATIONALE: The Court applied the statutory framework of the Jammu & Kashmir Entry Tax on Goods Act, 2000 and the Jammu & Kashmir General Sales Tax Act, 1962, interpreting Section 6 of the Entry Tax Act as a machinery provision limited to procedural aspects and not substantive penalty imposition.The Court relied on constitutional principles under Article 265 of the Constitution of India, which mandates that no tax or penalty shall be levied except by authority of law, requiring a clear charging section for penalty imposition.The Court cited Supreme Court precedent from M/s Khemka and Co. (Agencies) Pvt. Ltd. v. State of Maharashtra, emphasizing that penalty is an additional tax and cannot be imposed without a statutory charging provision; procedural provisions cannot enlarge or create penalty liability.The Court rejected the attempt to impose penalty under provisions of a different Act (VAT Act, 2005) where the Entry Tax Act, 2000 did not provide for such penalty, underscoring the principle that penalty provisions must be clearly and expressly provided in the relevant statute.The Court noted a legislative lacuna in the Entry Tax Act regarding penalty for bypassing Check Posts but held that judicial interpretation cannot create penal liability where none exists, and suggested remedial legislative action instead.
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