TaxTMI 
TaxTMI 
TaxTMI 
2010 (2) TMI 1086
X X X X Extracts X X X X
X X X X Extracts X X X X
....enterprise issued order-cum-acceptance letter dated March 9, 2004 (annexure A1) and sale invoice dated March 17, 2004 (annexure A2). The crawler tractor purchased by the assessee was further stated to have been sold by it (assessee) to M/s. Jagdish Narain Indira Bahadur, Kolkata vide bill No. 2365 dated March 27, 2004 for Rs. 7,03,800 including Central sales tax at two per cent, vide bill/cash memo dated March 27, 2004 (annexure A3). These goods are being transported through M/s. Pappu Transport Company, Pathankot in vehicle No. HR-38-5119 along with GR No. 551 dated March 27, 2004. While the goods were going to Kolkata, the driver of the vehicle voluntarily stopped the said vehicle at ICC (Export), Shambhu for generation of necessary information as prescribed under the provisions of the Punjab General Sales Tax Act, 1948 (for short, "the Act"). The driver submitted the accompanying bill and GR to the computer operator and generated the necessary information. It was pointed out that Central sales tax at two per cent, on inter-State sale, has been charged instead of tax at four per cent, which is leviable on the sale of machinery. Consequently, the vehicle was detained under sectio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l the requisite documents, so the question of concealment did not arise and if there was no concealment of facts, then the required tax can be calculated at the time of assessment, but no penalty can be imposed under section 14B(7) of the Act. The argument further proceeds that there must be a cogent material on record and specific finding that there has been an attempt to avoid and evade the tax before invoking the penalty clause contained in section 14B(7) of the Act, which, according to the learned counsel for the assessee, is totally lacking in the present case. In support of his contention, he has placed reliance on the judgment of this court in case of Xcell Automation v. Government of Punjab [2007] 5 VST 308 and judgment of the Allahabad High Court in case of Parry and Company Ltd. v. Commissioner of Sales Tax, U.P., Lucknow [2004] 138 STC 437. Hailing the impugned orders, on the contrary, the learned counsel for the State has argued that two per cent Central sales tax was charged in the bill issued in favour of M/s. Jagdish Narain Indira Bahadur, Kolkata, instead of four per cent and, thus, the assessee has charged two per cent sales tax on the goods in transit. Therefore,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a notice on the consignor or the consignee of the goods detained under clause (i) of sub-section (6), and give him an opportunity of being heard and if, after the enquiry, such officer finds that there has been an attempt to avoid or evade the tax due or likely to be due under this Act, he shall, by order, impose on the consignor or consignee of the goods, a penalty, which shall not be less than twenty per cent and not more than thirty per cent of the value of the goods and in case he finds otherwise, he shall order the release of the goods and the vehicle, if not already released, after recording reasons in writing and shall decide the matter finally within a period of fourteen days from the commencement of the enquiry proceedings. (iii) The officer referred to in clause (ii), before conducting the enquiry, shall serve a notice on the consignee of the goods, detained under clause (ii) of sub-section (6), and give him an opportunity of being heard and if, after the enquiry, such officer is satisfied that the documents as required under sub-section (2) and sub-section (4), were not furnished at the information collection centre or the checkpost, as the case may be, with a view to a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orm of cash or bank guarantee or crossed bank draft for an amount equal to the amount of penalty imposable and shall decide the matter within a period of fourteen days from the commencement of the enquiry proceedings. Meaning thereby, the penalty under section 14B(7) can only be imposed if there is sufficient material and specific finding that an attempt to avoid or evade the tax due or likely to be due has been made by the assessee and not otherwise. An identical question arose before a Full Bench of this court in Mool Chand Chuni Lal v. Shri Manmohan Singh, Assistant Excise and Taxation Officer [1977] 40 STC 238 (P&H). Having interpreted the relevant provisions and relying upon the judgment of this court in case of Dunlop India Limited v. State of Punjab [1972] 30 STC 597, it was held that the amended section 14B(7) of the Act for levy of penalty is not based on any assumption that the goods were transported after sale within the State. Its basis is the attempt to evade tax and it prescribes a condition precedent for the levy of penalty. The condition precedent is that the authorized officer should record a finding that there has been an attempt to evade the tax due unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of 1.1 per cent under the provisions of the Income-tax Act. It issued order-cum-acceptance letter (annexure A1) and sale invoice (annexure A2). The crawler tractor purchased by the assessee was further stated to have been sold by it (assessee) to M/s. Jagdish Narain Indira Bahadur, Kolkata, vide Bill No. 2365 dated March 27, 2004 for Rs. 7,03,800 including CST at two per cent, vide bill/cash memo dated March 27, 2004 (annexure A3). The driver of the truck himself informed and submitted the bills and relevant documents to the information collection centre. The truck was detained only on the ground that as the assessee was required to charge four per cent tax from the Kolkata firm, but as it has charged two per cent less, so, the penalty was imposed under section 14B(7) of the Act. In the instant case, the assessee has plausible and reasonable explanation to offer that only two per cent tax is leviable on the scrap sold by the Government of India enterprise MSTC Limited and not four per cent on machinery, as claimed by the Revenue. Whether the tax is to be levied at the rate of two per cent or four per cent is entirely a different matter, to be determined by the authorities at the....