TaxTMI 
TaxTMI 
2023 (1) TMI 1381
X X X X Extracts X X X X
X X X X Extracts X X X X
.... activity in the State of Jharkhand. The Petitioner Company, stock transfers its goods from its various manufacturing units to its stock yards/depots in various cities over India, including in Jharkhand. On 11. 03. 2016, batteries were being sent through Truck No. WB11B/5762 from Midnapur, West Bengal, the manufacturing unit of the Petitioner, to Jamshedpur, the depot of the Petitioner under Invoice No. 1215105461 (240 Units for a value of 26,89,405. 70) and also under Invoice No. 1215105462 (for 30 Units which was valued at 3,30,750. 00). Before the said truck could enter into the State of Jharkhand, the said truck broke down and subsequently goods were transshipped to another Truck No. WB-11B-5062. However, that Truck was seized on 11. 03. 2016 on its entry into the State of Jharkhand and the Notice to show cause was given (Annexure-9) wherein just 2 days' time was given to file reply as to why penalty should not be imposed under section 72 (6) of the JVAT Act. The Authorities, within the period of only 2/3 days from the said show cause notice, levied penalty on 14. 03. 2016 and in the meantime the petitioner applied for an amended road permit which was supplied to it on 15. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....W. P. (T) No. 2552 of 2019 the petitioner has assailed the order passed by the Commercial Tax Tribunal in Revision Case No. JR-13 of 2017 in respect of the petitioner 2015-16 whereby the order of appeal and the order of penalty under Section 72 (6) of the JVAT Act were upheld. 7. Mr. M. S. Mittal, learned senior counsel for the petitioner assisted by Mr. Rahul Lamba has assailed the impugned judgment basically on three grounds:- (i) No penalty can be levied under Section 72(6) on stock transferred goods as the tax liability is 'nil". The officer while passing the penalty order was aware that the transaction was a stock transfer. This is evident from the very first line of the penalty order (Annexure - 2). At the time of inspection, he had sufficient documents available to understand that the transaction was a stock transfer. Reliance is placed on the judgment of the Allahabad High Court (Lucknow Bench) in M/s. Ranbaxy Laboratories Ltd. v. Comm. of Commercial taxes, Lucknow, STR No. 90 of 2012) and the judgment of Karnataka High Court in M/s. Timetech India Pvt. Ltd. v. State of Karnataka, SSTA 40 of 2010. Relience has also been placed on the statutes in other states such as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dy of approaching the High Court by making an application before the Tribunal and requesting the Tribunal to refer such questions of law arising out of the impugned order. In the instant case the petitioner is aggrieved by the order of the Learned Tribunal by which Revision filed by the petitioner has been rejected affirming the order of the appellate authority. The petitioner instead of approaching the Tribunal u/s. 82 of the Jharkhand Value Added Tax Act, with an application to formulate the questions of law, has directly approached this Court. Section 82 (2) (b) of the Act provides that in the event of refusal of the Tribunal, the applicant dealer or the person in respect of whom the order has been passed of the Commissioner, as the case may be, may apply to the High Court. Section 82(3) further provides that on receipt of such application, if the High Court is not satisfied that such refusal was justified, it may require the Tribunal to state the case and refer it to High Court and on such requisition the Tribunal shall state and refer the case accordingly. In view of the preliminary objections raised on behalf of the State, the Writ Petition may be dismissed by this Court with....
X X X X Extracts X X X X
X X X X Extracts X X X X
....passed by the learned Tribunal in the case related to W. P. (T) 2549 of 2019, it appears that the truck, transporting the goods of the Petitioner-Company, was intercepted at Bahragora check-post on 11. 03. 2016 for verification of documents relating to goods loaded on it by the Commercial Taxes Officers on duty. Thereafter, the tax authority passed the order of penalty under Section 72(6) of JVAT Act. Thereafter the petitioner challenged the order of penalty passed under section 72 (6) of the JVAT Act before the appellate authority which also sustained the order of officer at check post and the respective order of the said Officer was also upheld till the learned tribunal. The learned tribunal has refused to interfere on the grounds raised by the petitioner in the said case. At this stage it is pertinent to mention here that the point of law which has been raised by the petitioner and controverted by the respondent is common in both the cases; factual details of each case has been given hereinabove and only as would suffice for disposal of both the writ applications. 11. After hearing both the parties the following questions of law emerges for consideration before this Court; (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct of the year 2015-16 and the goods brought by way of stock transfer were exempted from payment of tax totalling to Rs. 4,24,49,15,096. 00. Therefore, the Petitioner's contention that if no tax is leviable, only Rs. 5000/- penalty can be levied has substance. 13. In this regard reference may be made to the case of Mukerian Papers Ltd. (Supra) wherein Hon'ble Apex Court at para 7 has held as under:- "7. Once it is found that the revenue was not entitled to levy the tax which it purported to levy as purchase tax on the raw material, there can be no question of imposition of penalty or interest on the unpaid amount of tax. Therefore, the action taken in exercise of power under Section 10(6) and Section 11-D of the Act cannot be allowed to stand and must be set aside. " In this regard reference can also be made to the case of Purulia and Kharagpur Transmission Company Ltd. (Supra) wherein this court while dealing a similar issues has held at para 5 and 10 has held as under:- "5. In course of arguments, it was canvassed before us by learned senior counsel to the petitioner that the tax liability was only calculated on a notional basis, only in order to assess the amount of pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hi, Jharkhand. Further, the Respondent department had also issued the statutory Form-F to the petitioner for the concerned Invoice No. 1215105461 dated 08. 03. 2016 of Rs. 26,89,405. 70 and Invoice No. 12151054462 dated 08. 03. 2016 of Rs. 3,30,750. 60, thereby accepting that the goods involved in the said invoice were stock transfer and thus no sales tax / VAT under JVAT Act, 2005 was leviable on the said Invoices amounting to Rs 30,20. 156 00. It appears that the respondent authorities have also assessed the entire transaction and the records of the petitioner. The respondent authorities vide their assessment order dated 30. 3. 2019 passed for the financial year 2015-2016, which covered the Invoice No. 1215105461 dated 08. 03. 2016 of Rs. 26,89,405. 70 and Invoice No. 1215105462 dated 08. 03. 2016 of Rs. 3,30,750. 60, which are subject matter of W. P. (T) 2549 of 2019, and also covered the Invoice no. 1217081556 dated 13. 08. 15 of value of Rs. 62,800/- and Invoice No. 1217081557 dated 13. 08. 15 of value of Rs. 20,44,253/-, which are subject matter of W. P. (T) 2552 of 2019, were being stock transferred to the petitioner in the State of Jharkhand. As the Respondents have alread....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elevant to refer the judgment relied by the State. The judgment passed in the case of Salem Ahmed (supra) is not applicable in the instant case in view of the fact that there is a specific finding in para 12 of the said order by this Court that it is not the case of the petitioner that there was any breakdown in the vehicle or there was any other unavoidable reason for the delay. In the instant case one of the vehicles faced breakdown while in another vehicle there was mention of incorrect last digit, however, in both the cases it is an admitted fact while going through the assessment order of the assessee for the respective assessment period that the goods which were transported and intercepted were not having any tax liabilities. Further, the judgment passed in the case of M/s Economic Transport Organisation Ltd. (supra) it appears that the same is also not applicable in the instant case as in the said case the petitioner was not having any transit permit at all. In the said case the tribunal has also given finding that there was nothing on record to show that the voltage transformers were being transported between 13. 09. 2014 to 18. 11. 2014 with valid documents, it was diffic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....avour of the subject and against the State. 58. In the case of London and North Eastern Rly. Co. v. Berriman [1946 AC 278 : (1946) 1 All ER 255 (HL)], Lord Simonds quoted with approval (at All ER p. 270 C-D) the following observations of Lord Esher, M. R. in the case of Tuck & Sons v. Priester [(1887) 19 QBD 629 : 56 LJ QB 553 (CA)], QBD at p. 638: "We must be very careful in construing that section, because it imposes a penalty. If there is a reasonable interpretation which will avoid the penalty in any particular case, we must adopt that construction. If there are two reasonable constructions, we must give the more lenient one. That is the settled rule for the construction of penal sections. " It is trite that fiscal statute must not only be construed literally, but also strictly. It is further well known that if in terms of the provisions of a penal statute a person becomes liable to follow the provisions thereof it should be clear and unambiguous so as to let him know his legal obligations and liabilities thereunder". 18. So far as other questions/issues raised by the counsel of the petitioner with regard to giving adequate opportunity of the petitioner-company and a....