TaxTMI 
TaxTMI 
2026 (7) TMI 1931
X X X X Extracts X X X X
X X X X Extracts X X X X
....VAT Tribunal in Appeal No. 205 of 2014 dated 26.11.2015, whereby the same was dismissed and the penalty of Rs. 94,500/- under Section 51(7) (c) of the PVAT, Act, imposed by the Assistant Excise and Taxation Commissioner-cum-Designated Officer, ICC, Shambu (Import) vide order dated 23.08.2012 was affirmed. 2. The appellant is a registered dealer under the provisions of the PVAT Act and Central Sales Tax Act, 1956 at Ludhiana, Punjab with TIN No. 03931103838. The company is engaged in the business of resale of mobile phones and parts, computers and computer peripherals and is duly paying tax under the provisions of PVAT Act as well as Central Sales Tax Act, 1956. 3. It transpires that in the normal course of the business, the appellant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ority also rejected the appellant's appeal vide order dated 28.03.2014. Aggrieved by such order, an appeal was preferred before the Punjab Value Added Tax Tribunal, Chandigarh, under Section 63(1) of the PVAT Act, which too was rejected. Thus aggrieved, the appellant is before this Court. 5. Learned counsel for the appellant submits that there was a lack of clarity on the rate of tax payable on the accessory of a mobile phone, which came to be settled by the judgment dated 17.12.2014, passed by the Hon'ble Supreme Court in 'State of Punjab and other vs. Nokia India Pvt. Ltd.', 2015 AIR Supreme Court 1068. The Hon'ble Supreme Court, after going through the provisions and the applicable notifications, found that the accessory of mobile pho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s Shreyans Industries Ltd.' and VATAP No. 4 of 2009, 'M/s. Jain Steel Industries vs. State of Punjab & Anr.'. 8. Learned counsel for the State-respondent, on the other hand, contends that the law having been settled by the Supreme Court in Nokia India Pvt. Ltd. (Supra), it remains undisputed that the liability to pay tax on accessories was @ 12.5% as against 5% for mobile phones. It is also urged that this fact in itself establishes that there was an intent on part of the appellant to evade payment of tax and therefore, the orders passed by the authorities require no interference. 9. We have heard learned counsel for the appellant and learned State counsel and perused the materials on record. 10. Sections 51 (7) (a) and (b) of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....enalty, there has to be an intent to evade tax on part of the assessee. This position in law stands crystallized by the Division Bench of this Court in M/s Makin Paper Mills (supra), wherein the Court, relying upon the judgment of this Court in 'Xcell Automation vs. Government of Punjab and another', [2007] 5 VST 308 (P&H), has culled out the position in law 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 extend....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reference to entry 54 of List-ll of the 7th Schedule of the Constitution. We have also noticed that mere conferring of such drastic power did not mean that power could be used arbitrarily. Invocation of such powers is called for checking evasion when a person, inter-alia, either conceals relevant information, gives misleading information or acts in any other clandestine way or where from the available information itself, attempt to evade tax is patent. The said power has to be exercised with caution and not as a substitute for ordinary assessment or penalty as separately provided for under the Act. Exercise of power may some time be overlapping and mere alternative procedure is not conclusive for not exercising the said powers, where it is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... would not be gone into by the check-post authorities when the position in law in that regard was yet to be settled. Though, the law declared by the Hon'ble Supreme Court in Nokia India Pvt. Ltd. (supra) would be treated to be the law on the subject from the very beginning but for the purposes of ascertaining the intention on part of the assessee to evade payment of tax, we can conveniently acknowledge that the proposition in that regard came to be settled much later. Even otherwise, there was no intent found on part of the appellant to evade payment of tax since the accessories were clearly specified as being a part of the mobile phone. Had it been the intent of the appellant to evade payment of tax, it could have easily omitted to refer t....