TaxTMI 
TaxTMI 
2015 (3) TMI 132
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....d commerce in summary transaction and rejecting the plea of the appellant that these are sale in transit? (iii) Whether the order passed by the authorities below is not illegal in absence of finding of attempt to evade tax? (iv) Whether the initiation of proceedings itself is not wrong when there is no reason but mentioned in the detention notice that 'detected carrying aluminium ingots from Faridabad to Bhiwadi (Raj.). Failed to provide the proof of goods tax. The goods detained under section 31(6) of the VAT Act transaction needs verification?' (v) Whether the goods can be detained under section 31(6) for mere verification?" 2. A few facts relevant for the decision of the controversy involved, as narrated in the appeal may be noticed. The appellant-concern is a dealer registered with the Department of Sales Tax under the State Act and the Central Sales Tax Act, 1956 (in short, "the Central Act"). It is engaged in the trading of aluminum ingots in the State of Haryana. It is filing prescribed quarterly returns and discharging tax obligations in accordance therewith. It is also making sale in transit, as allowed u....
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....vied. 4. After hearing learned counsel for the appellant, we do not find any merit in the appeal. 5. The Assistant Excise and Taxation Commissioner (AETC) vide order dated December 20, 2007, annexure A1, while rejecting the contention of the appellant held that the transaction was an attempt to evade payment of tax. It was noticed as under:- "The undersigned didn't rely completely on the statement of the driver and got conducted a particular inquiry on November 25, 2007 through Shri Sukhbir Singh Kadiyan, Taxation Inspector, who along-with the driver of the vehicle visited the exact place from where the goods were loaded and the same was nothing but the godown of M/s. J. P. Engineers having two wide gates on which 'JP Engineers' was written in bold letters with white paint. On one side of which M/s. Venus Industrial Corporation Pvt. Limited and on the other side M/s. Pross Line Firms are situated. It was about 1.30 pm when one truck No. CG-10c-1644 was being unloaded inside the gate and another truck No. UP 73A-1804 was waiting outside the gate for unloading. The driver accompanied with Mr. Kadiyan pointed out the place inside the gate from where t....
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....AT D-3 inward or outward was accompanied with the documents. Heard at length. No documents or evidence produced except those stated in the written submission. Hence the documents produced with the transaction are not proper and genuine which contravenes the proviso of section 31(2) of the HVAT Act, 2003 and an attempt to evade the tax of Haryana State has been made through the present transaction." 6. The above findings were affirmed by the appellate authority, i.e., Joint 6 Excise and Taxation Commissioner (Appeals), Faridabad vide order dated April 29, 2010, annexure A2, with the following observations:- "5. I have heard both the sides in detail and perused the case file. In the present case, the respondent officer by penalty order put forward a scenario where one has to conclude that there was a definite attempt of evasion of tax by the appellant-dealer. On the other hand, the appellant in the grounds of appeal enumerated along with memorandum of appeal tried to establish that there was no attempt of evasion of the tax. On the facts and in the circumstances of the case, I am of the view that the obs....
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....of goods tax. The goods detained under section 31(6) of the VAT Act, transaction needs verification' to which learned counsel had vehemently objected that under section 31(6) of the HVAT Act goods cannot be detained for verification of the transaction. To analyse this we have to go through the provisions of section 31(6) which reads 'if the checking officer has reasons to suspect that the goods under transport are not covered by proper and genuine documents as mentioned in sub-section (2) or sub-section (4), as the case may be, or that the person transporting the goods is attempting to evade payment of tax, he may for reasons to be recorded in writing, and after hearing the said person, order the unloading and detention of goods. . .' Two scenarios come out from the language of this provision, first that when the goods under transport are not covered by proper and genuine documents and second that the person transporting the goods is attempting to evade payment of tax. The word used in between the two situation is 'or' not and certainly in the first scenario when the documents are not proper and genuine the resultant consequences will be attempt to evade payment....
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.... required to use VAT D3 (inward). Afterwards on November 23, 2007 by preparing second set of documents this transaction was being given colour of a sale in transit which was not like this. The driver-cum-person incharge of goods also stated the fact of loading the goods from the godown of appellant at Faridabad whose statement was recorded in writing and then its contents were confirmed by the Taxation Inspector during enquiry who took him to the place from where these goods were loaded. The location and address of the place were admitted by the appellant himself in his written submissions dated November 20, 2007. From these facts on record we cannot say that it was the transporter who unloaded and loaded the goods at Faridabad, then apparently there was no need of preparing second set of documents dated November 23, 2007. From the facts on record, we see that a scheme or device to evade tax was clearly set in motion when the goods were purchased from Korba without VAT D-3 (inward) and took delivery at Faridabad and then claimed to have been sold in transit to M/s. Sant Aluminum Pvt. Limited, Bhiwadi, by endorsing the GR to him which was negated by the driver-cum-person incharge of....