S.V. Cold Drinks vs State of Punjab and Others

Ajay Kumar Mittal, J.—The petitioner is a registered dealer under the Punjab Value Added Tax Act, 2005 (in short, "the Act") and as per the averments made in the petition, it filed all the statutory returns for the assessment years 2008-09 and 2009-10 and deposited the tax due under the Act. The premises of the petitioner were inspected by Mobile Wing, Jalandhar on December 27, 2010 and during the course of inspection, the inspecting team impounded two bill books, computer, two small ledgers, one diary, one blank bill book, one slip pad and seven sales bill files along with two bill books of M/s. V. K. Agencies, Balachaur for verification. The grievance of the petitioner is that the authority has passed an order on June 13, 2011 creating a total liability of Rs. 19,86,193 which included tax of Rs. 6,58,731 at the rate of 12.5 per cent, penalty of Rs. 13,17,462 u/s 56 of the Act at the rate of 200 per cent of the tax and further penalty amounting to Rs. 10,000 u/s 60 of the Act. We have heard learned counsel for the parties.

The learned counsel for the petitioner submitted that under the Act, section 29 provides for regular assessment whereas section 30 deals with provisional assessment. Respondent No. 2 without specifying whether it was a regular assessment or provisional assessment had passed one composite order for two assessment years 2008-09 and 2009-10 which is legally not permissible. Further, respondent No. 2 had passed the order, annexure P4, in violation of principles of natural justice inasmuch as the copy of slip pad was not provided to the petitioner to explain the entries therein. It was also submitted that the order nowhere dealt with the returns which had been filed by the petitioner. The benefit of various deductions and input claims under the Act had also not been given to the petitioner. In the end, it was urged that the entire demand is presumptuous and the order has been passed in a mechanical manner imposing 200 per cent penalty u/s 56 of the Act.

Challenging the retention of slip pad beyond the period prescribed under the statute, it was contended that the period of 60 days envisaged u/s 46 of the Act having expired, the slip pad could not be legally kept by the Department. It was submitted that under the Act, the maximum period for retaining the seized material was 60 days. The said period having expired, the Department was duty-bound to return the seized material. Learned counsel for the petitioner also submitted that the photo copies of the slip pad can be returned to the petitioner if this court considers that the original may be required to be used at the time of framing of regular assessment.

Opposing the prayers made by the learned counsel for the petitioner, it was submitted by the learned State counsel that the order dated June 13, 2011 was rightly passed and the petitioner had alternative remedy to challenge the said order by way of appeal, etc. The prayer for dismissal of the writ petition was made.

After hearing learned counsel for the parties, we find force in the submission of learned counsel for the petitioner. The slip pad on which reliance had been placed for assuming Uchanti sales on which tax of Rs. 6,58,731 and penalty of Rs. 13,17,462 has been imposed, could have been passed after providing an opportunity to the petitioner to explain the entries in the slip pad. Learned State counsel was unable to demonstrate that the order dated June 13, 2011 passed by the Revenue, was after providing a copy of slip pad which had been seized during the inspection on December 27, 2010. Learned State counsel was also unable to justify that the defendant had legally kept the slip pad after the expiry of statutory period prescribed under the Act for its retention. Furthermore, the petitioner had filed the returns and the order was passed without discussing the deductions claimed in the returns and the input-tax claims made therein. Since the action of the authority was in violation of principles of natural justice without affording proper opportunity, the plea of alternative remedy raised by the learned State counsel, in the facts and circumstances, loses its significance.

Accordingly, order dated June 13, 2011 (annexure P4) is quashed and the matter is remitted to the appropriate authority to pass a fresh order in accordance with law. However, the learned State counsel was unable to justify retention of seized documents beyond the period of 60 days. The petitioner has, thus, a right to return of the documents. However, to safeguard the interest of the Revenue, it is directed that the Revenue shall be entitled to retain the original of slip pad No. 5 but shall hand over the photo copy of the entire slip pad to the petitioner for explaining the same before the appropriate authority. The original slip pad may also be returned after the conclusion of the proceedings before various authorities, if any. Disposed of accordingly.