TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 297
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....t beyond the limited jurisdiction of examining the documents accompanying goods by imposing penalty on a transaction not liable to tax under HPVAT Act? b. Whether the impugned order is illegal and perverse when not considering the fact the Assessing Authority in assessment order dated 04.09.2008 passed for the assessment year 2006-07 has accepted the returns filed by the Appellant and not imposed any tax on the transaction disputed in the impugned order? c. Whether the genuineness of Form-C & Form-E-1 can be doubted by Excise and Taxation Authorities in Himachal Pradesh and finding of evasion of tax confirmed on this ground?" The background facts. 3) The petitioner had entered into a "Supply Agreement" on 22.12.2003 with M/s Bharti Cellular Limited, New Delhi for supply of equipment for cellular services in the State of Himachal Pradesh. 4) On 20.11.2006, 22.11.2006 & 24.11.2006, four vehicles carrying goods described as Feeder Cakes, DG Sets, SMPS-48 and SMPS-24 were detained by the Excise & Taxation Officer (in short "the ETO") at Multi Purpose Barrier (MPB), Parwanoo, under Section 34(6) of the Act. 5) The ETO detained the goods on the ground that they were not accompani....
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.... the tax by preparing improper and not genuine documents to show the sale as a transit sale. 12) He therefore concluded that the Assessing Officer rightly imposed penalty under Section 34(7) of the Act, but directed the Assessing Authority to give credit to the petitioner for those transactions in which VAT had been paid, after hearing the petitioner, and for the said purpose matter was remanded to the Assessing Authority. The Assessment order dt.4.9.2008 13) In the meantime, an original assessment order was passed by the Assessing Authority for the Year 2006-07 on 04.09.2008 concluding the assessment and allowing the excess amount deposited by the petitioner to the tune of Rs. 5,86,430/- to be carried forward to the next quarter for the Assessment Year 2006-07. 14) In the said order, the Assessing Authority accepted the turnover declared by the petitioner and did not state anything regarding imposition of tax on the transaction disputed at the Barrier. The order dt.19.8.2009 of the Tribunal in the appeal against the order dt.15.11.2007 of the Appellate Authority 15) The petitioner then challenged the order dt. 15.11.2007 before the H.P. Tax Tribunal, Dharamshala, Camp at Shi....
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....d appeal by holding as under:- "........Appellant has contended that the sale in question was sale in transit covered by section 6(2) of the CST Act. As per the agreement entered into between the appellant and M/s Bharti Airtel Ltd., Shimla goods were to be supplied at site at Shimla. The sale was thus to be completed at the site of Bharti Airtel Ltd. Shimla from the appellant and VAT was then to be paid to the State of H.P. The Assessing Authority (AETC) in my opinion was thus right in holding that the appellant had made an attempt to evade the tax under HPVAT Act, 2005 in the garb of sale in transit. He is thus right in treating the penalty imposed by the ETO I/c MPB, Parwanoo u/s 34(7) of the Act as genuine. The judgment relied upon by the appellant also does not support his case since the case has been now decided by the AETC, Shimla afresh whereas the judgment pertains to the powers of the check-post officer. The order of the Assessing Authority is thus upheld and the appeal is dismissed....." The order dt.9.9.2016 of the Tribunal 24) The petitioner then challenged this order before the H.P. Tax Tribunal, which dismissed the appeal on 09.09.2016. 25) It examined the Suppl....
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....ed Advocate General appearing for the respondents-State refuted the said contentions and supported the order passed by the Tribunal. Consideration by the Court 35) The aspect of scope of power of the Officer at the Check Post under the Sales tax Law fell for consideration before a Division Bench of the Punjab & Haryana High Court in Xcell Automation vs. Government of Punjab & Another (2007) 5 VST 308 (P&H). The Division Bench explained the power of the Officer at the Check Post after considering the provisions of the Punjab General Sales Tax Act, 1948, which contains similar powers for inspection of goods and transit at Check Post. The Division Bench summed up the legal position in the following terms:- " The position can be summed up as under: (1) Exercise of power at the check-post to be valid, should have reasonable nexus with the attempt at evasion. (2) Straight-jacket approach is not called for and each instance of exercise of power has to be seen in the light of individual facts. Neither exercise of power can be restricted, wherever required for checking attempt at evasion nor can be extended to areas where there was no attempt at evasion. (3) In an appropriate ca....
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....diction for imposing penalty. 40) The fact that the petitioner in the instant case too produced all the relevant documents, is not in dispute. 41) The plea of the petitioner that the transaction is not taxable, is a bonafide plea and in the absence of either mis-declaration or concealment, it has to be held that the exercise of power of imposing penalty at Check Post, was not warranted. 42) Moreover, the petitioner had submitted documents of title, i.e. Purchase Order & Form-C procured from buyer in the State and Form E-1 procured from seller in Goa, but the genuineness of the Form-C and Form E-1 had been doubted by the ETO as well as the Assessing Authority subsequently. 43) Undoubtedly, sale against From-C and Form E-1 is exempt from CST under Section 6(2) of the CST Act ; Form-C needs to be furnished by the seller to the prescribed authority of the Seller's State; so the onus is on the State from where the goods are being sold to ensure that the Form against which such sale is being conducted, is legitimate and genuine. 44) Consequently, the Excise Department of the State of Himachal Pradesh, had no right to invalidate and/or question the same, as it had admittedly been fur....
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.... the other State, it still will be an inter-State sale. The determinative factor is inter-State movement of goods pursuant to a completed sale or agreement to sell, as held in M/s DCM Limited vs. Commissioner of Sales Tax, Delhi. (2009) 21 VST 417 (SC) 51) In that case, the Supreme Court held that taking of delivery in Delhi by the purchasing dealers for their assigned territories outside Delhi per se would not take away the transactions in question from the category of inter-State sales; the determinative test to be applied is whether the purchasing dealers were obliged contractually to remove the goods from Delhi where they were bought to the assigned territories and whether in fact the goods actually removed. It was held that situs of sale would not decide the question as to whether the sales in question were "inter-State sales" or "local sales". 52) Therefore, having regard to the above settled legal position, it was not necessary to se for the authorities under the act to see the situs of the sale in question and they ought to have seen whether there was a movement of goods from one State to the other pursuant to the sale. 53) For the aforesaid reasons, the Revision is allo....