International Cars and Motors Ltd. vs State of Punjab and Others

Hemant Gupta J.—The challenge in the present appeal is to an order passed by learned Value Added Tax Tribunal dated March 28, 2011 whereby an order passed by the Deputy Excise and Taxation Commissioner-cum-Designated Appellate Authority, Jalandhar dated November 19, 2010 was set aside with the liberty to the appellant to raise the contentions as noted before the Tribunal including as to whether penalty was required to be imposed under sections 51(7)(b) or 51(4) of the Punjab Value Added Tax Act 2005, (for short, "the Act"). The learned counsel for the appellant vehemently argued that there is no finding recorded by any of the authority that three was any attempt to evade tax or that any tax was payable. Therefore, the question of penalty will arise only when a finding is recorded that the appellant has attempted to evade tax. In fact, there is no involvement of tax and/or evasion to tax. Consequently, the question of imposition of penalty does not arise. In the absence of such finding, the question of penalty, either u/s 51(7) or section 51(4) of the Act, does not arise for consideration, therefore the finding recorded is unjustified.

The learned counsel for the appellant relies upon a Supreme Court judgment reported as Tata Iron and Steel Co. Ltd. Vs. State of Jharkhand and Others, , wherein the remand to the authority who has decided the issue conclusively was not favoured. It is thus contended that since the Deputy Excise and Taxation Commissioner has decided the appeal on merits, it will not be fair to remand the matter for decision afresh.

We have heard learned counsel for the appellant and do not find any merit in the arguments raised. The Assistant Excise and Taxation Commissioner has imposed the penalty holding that the documents produced by the appellant are not genuine. After returning such finding, penalty was imposed u/s 51(7)(b) of the Act. In appeal, learned Deputy Excise and Taxation Commissioner held that the appellant had sent the goods out of Punjab with improper documents and that the penalty imposed is justified u/s 51(4) of the Act.

The learned Tribunal in further appeal held that the question whether the penalty is imposable u/s 51(7)(b) or u/s 51(4) is a question which is required to be decided by Deputy Excise and Taxation Commissioner and thus remitted the matter back to the Deputy Excise and Taxation Commissioner.

The arguments raised by learned counsel for the appellant that none of the authorities has recorded any finding that any tax was payable or there was any attempt to evade the tax and therefore the question of payment of penalty u/s 51(7) and 51(4) of the Act does not arise for consideration at this stage by this court.

The matter has been remitted back to learned Deputy Excise and Taxation Commissioner to decide the question of not only amount of penalty but also the contention as raised before the Tribunal. Once, the matter has been remitted back to the Deputy Excise and Taxation Commissioner with liberty to raise all contentions, we do not find that any prejudice is suffered by the appellant by such order. The authority seized of the appeal is required to examine whether any tax was payable by the appellant or that there was any attempt to evade tax or that it was just a technical breach of provisions of not having proper documents. After such finding is recorded by the Deputy Excise and Taxation Commissioner only then the authority shall examine the question of penalty payable either under sections 51(7) and 51(4) of the Act.

The judgment rendered in Tata Iron and Steel Co. Ltd. Vs. State of Jharkhand and Others, is not helpful to the arguments advanced in the present case. The honourable Supreme Court in the aforesaid judgment noticed that the Commissioner exercising the suo motu revisional powers did not dispute the finding of the Joint Commissioner but proceeded on technicalities relying on an erroneous judgment. Even the High Court in a writ petition under article 226 or 227 of the Constitution of India has not held that the finding of the Joint Commissioner was erroneous but proceeded to weigh the quantity of evidence. It was in these circumstances, the honourable Supreme Court observed that the material produced before the Joint Commissioner was sufficient to decide whether the product manufactured by the appellant was different product and then the matter could not have been remanded by the High Court for fresh enquiry.

Though in the present case, the penalty has been imposed upon the appellant by the original authority as well as by the Deputy Excise and Taxation Commissioner but the matter has been remanded to the Deputy Excise and Taxation Commissioner to examine the question of levy of penalty. The appellant has been permitted to raise other contentions. Thus, it is not interfering m the finding of fact recorded by the authority. All questions have been directed to be decided by the Deputy Excise and Taxation Commissioner. It cannot be said that there is any bar either in statute or in precedents that the matter could not be referred for re-determination. In view of the said fact, we do not find any merit in the present appeal. The same is dismissed. It shall be open to the appellant to raise all questions of law and facts before the Deputy Excise and Taxation Commissioner.