Punjab-Haryana High Court
Shree Shiva Steels vs State Of Punjab And Anr on 28 January, 2025
Author: Sudeepti Sharma
Bench: Arun Palli, Sudeepti Sharma
Neutral Citation No:=2025:PHHC:012035-DB
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VATAP No.84 of 2010
IN THE HIGH COURT OF PUNJAB & HARYANA
AT CHANDIGARH
VATAP No.84 of 2010 (O&M)
Reserved on: 07.01.2025
Pronounced on: January 28, 2025
Shree Shiva Steels ......Appellant
Vs.
The State of Punjab and another ......Respondents
CORAM: HON'BLE MR. JUSTICE ARUN PALLI
HON'BLE MRS. JUSTICE SUDEEPTI SHARMA
Present: Ms. Aakriti, Advocate for
Mr. Sandeep Goyal, Advocate
for the appellant.
Mr. Saurabh Kapoor, Additional Advocate General, Punjab.
----
SUDEEPTI SHARMA J.
The present appeal under Section 68(2) of the Punjab Value Added
Tax Act, 2005 (hereinafter referred to as 'the Act') is preferred against the order
dated 30.07.2010 passed by Ld. VAT Tribunal, Punjab, whereby the penalty
order dated 27.08.2009 passed by Assistant Excise and Commissioner (Mobile
Wing), Bathinda to the tune of Rs.2,12,310/- under Section 51(7) (c) of the
Punjab VAT Act, 2005, is upheld.
2. The following questions of law have been claimed in the present
appeal:-
(i) Whether on facts and circumstances of the case, the Ld.
Tribunal was justified in upholding the penalty imposed by
AETC?
(ii) Whether the appellant could have attempted to evade the
tax under the Punjab VAT Act by not submitting the bills at
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ICC despite the fact that the details of bills are duly
mentioned in the Statutory Form of Rajasthan (VAT 47) and
was produced at the time of generation of information for
other transactions?
(iii) Whether the ETO (Mobile Wing) has the jurisdiction to
check and detain the vehicles at the ICC premises itself even
though officers of ICC have the jurisdiction to do so within
their premises?
(iv) Whether on the facts and circumstances of the case, the
ETO (Mobile Wing) can check and detain the vehicles, when
the vehicles were at ICC premises and ICC staff could have
corrected the information if there were any defects in the
documents?
3. Brief facts of the case as narrated in the appeal are that on
19.08.2009, the goods i.e. Iron Goods being transported in the vehicles No. RG-
13G-4274 & RJ-13G-8182 were detained by the Excise and Taxation Officer
(MW), Bathinda for verification on the grounds that the goods in transit were in
excess by weight as detected after weighment and requisite information in
respect of the excess goods was not furnished at any Information Collecton
Centre (for short 'ICC'). The documents accompanying the goods were GRs
No. 1434 and 1435 dated 19.08.2009. Trip Sheet of Punjab Goods Transport
Company, Mandi Gobindgarh and three VAT XXXVI forms, Invoices No. 1287
and 2448 and 2456 dated 19.08.2009 for Rs. 32,798/-, Rs. 33,130/-, Rs.
89,025/- and Rs. 73,400/-, respectively and four forms VAT XXXVI and Forms
VAT 47. Statements of the drivers were recorded and a notice was issued to the
owner of the goods.
4. Sh. Neeraj Kumar stated to be Manager of the firm M/s Shree
Shiva Steels, Mandi Gobindgarh, appeared before the Detaining Officer and
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claimed ownership of the goods loaded excess in both the vehicles. He was
confronted with the facts of the case. He produced FR No. 980 and 981
alongwith retail invoices 39 and 40 dated 19.08.2009 issued by M/s Shree Shiva
Steels, Mandi Gobindgarh for Rs. 1,58,781/- and Rs. 2,65,481/- in favour of
M/s Raghav Trading Company, Sri Ganganagar. He explained that the goods
which were detected in excess were covered by these documents which were
given to the drivers but the TIN of the consignor firm was blocked so the driver
could not generate the information in respect of these goods. He did not produce
any account books. He furnished cash security of Rs. 53,100/- and bank
guarantee for Rs. 1,59,253/- and requested for release of the goods, the goods
were accordingly released. The Detaining Officer observed that the excess
goods worth Rs. 4,24,622/- were being transported without documents and
requisite information was knowingly not furnished to any ICC. The case was
forwarded to the AETC (MW), Bathinda, for imposing penalty u/s 51(7)(c) of
the Act.
5. After inquiry, the AETC (MW), Bathinda, imposed a penalty of Rs.
2,12,310/-, u/s 51 (7) (c) of the Punjab VAT Act, 2005, vide his order dated
27.08.2009.
6. Aggrieved by the order of the AETC (MW), Bathinda, the
appellant preferred an appeal before the DETC(A), Faridkot Division, HQ,
Bathinda, who dismissed the appeal, vide his order dated 19.11.2009.
7. Aggrieved by the order of the DETC (A), Faridkot Division, HQ
Bathinda, the appellant preferred an appeal before VAT Tribunal, Punjab,
Chandigarh who vide order dated 30.07.2010 dismissed the appeal. Hence, the
present appeal.
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SUBMISSIONS OF LEARNED COUNSEL FOR THE PARTIES
8. Learned counsel for the appellant contends that the penalty under
Section 51(7) (C) of the Punjab VAT Act, 2005 could not be imposed since there
was no intention to evade any tax. She has relied upon the judgment passed by
this Court in VAT Appeal No.36 of 2012 decided on 26.09.2012, titled as State
of Punjab and another Vs. M/s Desai Brothers Limited.
9. Per contra, learned State counsel contends that the appeal filed by
the appellant has rightly been dismissed by Ld. VAT Tribunal, Punjab vide its
order dated 30.07.2010, since the appellant was not carrying bill and GR of the
excess goods at the time of their detention.
10. We have heard the learned counsel for the parties and perused the
whole record of this case.
11. Before preceding, it would be necessary to reproduce the relevant
portion of Section 51 of the Punjab Value Added Tax Act, 2005, which is
reproduced as under:-
"51. Establishment of information collection centres or
check posts and inspection of goods in transit.
"(1) If, with a view to prevent or check avoidance or
evasion of tax under this Act, the State Government
considers it necessary so to do, it may, by notification, direct
for the establishment of a check post or, information
collection centre or both at such place or places (or in such
manner), as may be specified in the notification.
(2) The owner or person Incharge of (the goods) a goods
vehicle shall carry with him a goods vehicle record, goods
receipt, a trip sheet or a log-book, as the case may be, and a
sale invoice or bill or cash memo, or delivery challan
containing such particulars, as may be prescribed, in respect
of such goods meant for the purpose of business, as are
being carried in the goods vehicle (or by any other means)
and produce a copy each of the aforesaid documents to an
officer Incharge of a check post or information collection
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centre, or any other officer not below the rank of an Excise
and Taxation Officer checking the vehicle at any place:
Provided that a person selling goods from within or outside
the State in the course of (intrastate or) inter-State trade or
commerce, shall also furnish or cause to be furnished a
declaration with such particulars, as may be prescribed:
Provided further that a taxable person, who sells or
despatches any goods from within the State to a place
outside the State or imports or brings any goods or
otherwise receives goods from outside the State, shall furnish
particulars of the goods in a specified form obtained from
the designated officer, duly filled in and signed.
(3) At every check post or information collection centre or
at any other place when so required by an officer referred to
in sub-section (2), the driver or any other person Incharge of
the goods (and goods) )vehicle shall stop the vehicle and
keep it stationary, as long as may reasonably be necessary,
and allow the officer Incharge of the check post or the
information collection centre or the aforesaid officer to
check the contents in the vehicle by breaking open the
package or packages, if necessary, and inspect all records
relating to the goods carried, which are in the possession of
the driver or any other person, as may be required by the
aforesaid officer, and if considered necessary, such officer
may also search the goods vehicle and the driver or other
person Incharge of the vehicle or of the goods.
(4) The owner or person Incharge of a goods (the goods
and) vehicle entering the limits or leaving the limits of the
State, shall stop at the nearest check post or information
collection centre, as the case may be, and shall furnish in
triplicate a declaration mentioned in sub-section (2)
alongwith the documents in respect of the goods carried in
such vehicle before the officer Incharge of the check post or
information collection centre. The officer Incharge shall
return a copy of the declaration duly verified by him to the
owner or person Incharge of (the goods and) the goods
vehicle to enable him to produce the same at the time of
subsequent checking, if any:
Provided that where a goods vehicle bound for any place
outside the State passes through the State, the owner or
person Incharge of such vehicle shall furnish, in duplicate, to
the officer Incharge of the check post or information
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collection centre, a declaration in respect of his entry into
the State in the prescribed form and obtain from him a copy
thereof duly verified. The owner or person Incharge of the
goods vehicle, shall deliver within forty-eight hours the
aforesaid copy to the officer Incharge of the check post or
information collection centre at the point of its exit from the
State, failing which, he shall be liable to pay a penalty to be
imposed by an order, made by the officer incharge of the
check post or information collection centre equal to fifty per
cent of the value of the goods involved:
Provided further that where the goods carried by such
vehicle are, after their entry into the State, transported
outside the State by any other vehicle or conveyance, the
burden of proving that the goods have actually moved out of
the State, shall lie on the owner or person Incharge of the
vehicle:
Provided further that no penalty shall be imposed unless the
person concerned has been given an opportunity of being
heard.
(5) At every station of transport of goods, bus stand or
place of loading or unloading of goods, when so required by
the Commissioner or the designated officer, the driver or the
owner of (the goods, and) the goods vehicle or the employee
of transport company or goods booking agency, shall
produce for examination, transport receipts and all other
documents and accounts books concerning the goods
carried, transported, loaded, unloaded, consigned or
received for transport, maintained by him in the prescribed
manner. The Commissioner or the designated officer shall,
for the purpose of examining that such transport receipts or
other documents or account books are in respect of the
goods carried, transported, loaded, unloaded or consigned
or received for transport, have the powers to break open any
package, or packages of such goods.
(6)(a) If the officer Incharge of the check post or information
collection centre or any other officer as mentioned in sub-
section (2), has reasons to suspect that the goods under
transport are meant for trade and are not covered by proper
and genuine documents as mentioned in sub-section (2) or
sub-section (4), or that the person transporting the goods is
attempting to evade payment of tax, he may, for reasons to be
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recorded in writing and after hearing the person concerned,
order detention of the goods alongwith the vehicle for a
period not exceeding seventy-two hours. Such goods shall be
released on furnishing of security or executing a bond with
sureties in the prescribed form and manner by the consignor
or the consignee, if registered under this Act to the
satisfaction of the officer on duty and in case the consignor
or the consignee is not registered under this Act, then on
furnishing of a security in the form of cash or bank
guarantee or crossed bank draft, which shall be equal to the
amount of penalty leviable rounded up-to the nearest
hundred.
(b) If the owner or the person Incharge of the goods has
not submitted the documents as mentioned in sub-sections
(2) and (4) at the nearest check post or information
collection centre, in the State, as the case may be, on his
entry into or before exit from the State, such goods shall be
detained alongwith the vehicle for a period not exceeding
seventy-two hours subject to orders under clause (c) of sub-
section (7).
NOTE: (1) "Person in-charge of the goods" shall include
carrier of goods or agent of a transport company or booking
agency or any other bailee for transportation and in-charge
or owner of a bonded warehouse or of any other warehouse.
(2) "information collection centre" shall include Virtual
information collection centre.
(7)(a) The officer detaining the goods under sub-section (6),
shall record the statement, if any, given by the consignor or
consignee of the goods or his representative or the driver or
other person Incharge of the goods vehicle and shall require
him to prove the genuineness of the transaction before him in
his office within the period of seventy-two hours of the
detention. The said officer shall, immediately thereafter,
submit the proceedings alongwith the concerned records to
the designated officer for conducting necessary enquiry in
the matter;
(b) The designated officer shall, before conducting the
enquiry, serve a notice on the consignor or consignee of the
goods detained under clause (a) 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
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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 be equal to thirty per cent of the value
of the goods. In case he finds otherwise, he shall order
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;
(c) The officer referred to in clause (b), before conducting
the enquiry, shall serve a notice on the consignor or
consignee of the goods detained under clause (b) 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 subsections (2) and (4), were
not furnished at the information collection centre or the
check post, as the case may be, with a view to attempt to
avoid or evade the tax due or likely to be due under this Act,
he shall by order, for reasons to be recorded in writing,
impose on the consignor or consignee of the goods, penalty
equal to fifty per cent of the value of the goods involved. In
case, he finds otherwise, he shall order release of the goods
for sufficient reasons to be recorded in writing. He may,
however, order release of the goods and the vehicle on
furnishing of a security by the consignor or the consignee in
the form of cash or bank guarantee or crossed bank draft for
an amount equal to the amount of penalty imposable and
shall decide the matter finally within a period of fourteen
days from the commencement of the enquiry proceedings;
and
(d) The officer Incharge of a check post or information
collection centre or any other officer referred to in sub-
section (2), may receive the amount of cash security as
referred to in clause (a) of sub-section (6) and clause (c) of
sub-section (7) and the amount of penalty imposed under
sub-section (4) and clauses (b) and (c) of sub-section (7)
against a proper receipt in the prescribed manner.
Explanation. - The detained goods and the vehicle shall
continue to be so detained beyond the period specified in
sub-sections (6) and (7), unless released by the detaining
officer or enquiry officer against surety or security as
provided for in these sub-sections or the penalty imposed,
has been realized or the enquiry officer orders release of the
detained goods after enquiry, whichever is earlier. "
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12. A perusal of the above shows that the object and reasoning behind
the establishment of check post or Information Collection Centre or both was to
prevent or check avoidance or evasion of tax. Therefore, it is the requirement
under Section 51(2) of the Act that the owner or person Incharge of the goods
or a goods vehicle shall carry with him a goods vehicle record, goods receipt, a
trip sheet or a log-book, as the case may be, and a sale invoice or bill or cash
memo, or delivery challan containing such particulars, as may be prescribed, in
respect of such goods meant for the purpose of business, as are being carried in
the goods vehicle or by any other means and produce a copy of each of the
aforesaid documents before an officer incharge of check post.
13. Further, as per Section 51(4), it is mandatory requirement that the
owner or person Incharge of the goods and a goods vehicle entering the limits
or leaving the limits of the State, shall stop at the nearest check post or
information collection centre, as the case may be, and shall furnish in triplicate
a declaration mentioned in sub-section (2) alongwith the documents in respect
of the goods carried in such vehicle before the officer Incharge of the check post
or information collection centre.
14. In view of the above mandatory provisions, now we come to the
facts of the present case. The undisputed fact is that the goods i.e. iron goods
being transported in two vehicles were detained by the Excise and Taxation
Officer (MW), Bathinda for verification on the grounds that the goods in transit
were in excess by weight as was detected after weighment, and requisite
information in respect of excess goods was not furnished at any ICC. After
issuance of show cause notice, Shri Neeraj Kumar Manager of the firm M/s
Shree Shiva Steels, Mandi Gobindgarh, appeared before the Detaining Officer
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who claimed himself to be the owner of the excess goods loaded in both the
vehicles. He was confronted with the facts of the case. He produced FR No. 980
and 981 alongwith retail invoices 39 and 40 dated 19.08.2009 issued by M/s
Shree Shiva Steels, Mandi Gobindgarh for Rs. 1,58,781/- and Rs. 2,65,481/- in
favour of M/s Raghav Trading Company, Sri Ganganagar. He explained that the
goods in excess were covered by aforementioned documents and were given to
the driver but since the TIN of the consignor firm was blocked, therefore, the
driver could not generate the information in respect of the excess goods. He did
not produce any account books in support of his explanation. The production of
documents by Sh. Neeraj Kumar, Manager of the firm-M/s Shree Shiva Steels,
Mandi Gobindgarh after issuance of show cause notice is an afterthought.
15. A perusal of the record further shows that the drivers of both the
trucks did not produce any document in respect of excess goods and
categorically stated that they have no other document relating to the goods in
question. The explanation given by owner of the goods that since the TIN of the
consignor firm was blocked, therefore, the drivers could not generate the
information in respect of excess goods, cannot be believed since perusal of the
record shows that GR No.980 and 981 alongwith retail invoices No.39 and 40
dated 19.08.2009 were produced by Sh. Neeraj Kumar stated to be Manager of
the appellant-firm, after the show cause notice was issued to the owner of the
goods. Further these documents should have been with the drivers at the time of
furnishing information at ICC as per the requirement of Section 51(2) of the Act
as referred to above. This proves the intention of the appellant to evade tax.
16. So far as the judgment relied upon by the learned counsel for the
appellant is concerned, the facts of the same are distinguishable, since in that
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case the entries were made in Form ELTA-12 as well as declaration in Form 85
and the driver inadvertently left the invoices relating to the goods in dispute due
to over-sight and on being asked by the officer on duty, he went back and
picked up the remaining documents and produced the same before the officer
Incharge, whereas, in the present case, both the drivers were not carrying the
requisite documents as per the requirement of the provisions of Section 51 of
the Punjab Value Added Tax Act, 2005
17. A perusal of the record shows that the Ld. AETC (MW) Bathinda
after conducting proper inquiry and after giving full opportunity of being heard
to the appellant, has passed the penalty order under Section 51(7) (c) of the Act.
18. In view of the above, we do not find any infirmity in the order
dated 30.07.2010 passed by the Ld. VAT Tribunal, Punjab, Chandigarh, the
same is upheld. No question of law much less substantial question of law arises
in the present appeal. Accordingly, the same is dismissed.
19. All the pending applications also stand disposed of.
(ARUN PALLI) (SUDEEPTI SHARMA)
JUDGE JUDGE
January 28, 2025
sonia arora
Whether speaking/reasoned: Speaking
Whether reportable Yes / No
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