VAT: No Penalty If Attempt to Evade Tax Not Proved: Punjab & Haryana HC [Read Order]

VAT - Penalty - Evade Tax - Tax - Punjab and Haryana High Court - taxscan

The High Court of Punjab and Haryana, in a VAT case, recently held that the penalty can’t be imposed if attempt to evade tax is not proved.

M/s. Punjab Wool Syndicate, the appellant was making sale to Government Department all over India as the supply order was given by the Additional Deputy Inspector General of Police, CRPF, Jalandhar and the driver had produced 5 documents before the computer center at ICC but VAT-XXXVI could not generate and at the time of checking, apart from 5 documents two invoices No. 526 and 527 dated 12.7.2006 and GR Nos. 9411 and 9412 were also produced.

The counsel for the appellant argued that the person operating the computer failed to generate two bills of the appellant due to oversight. He has further contended that the sale was being made by the appellant to the Central Government Department and the Central Government Department had received sanction from the financial authority to purchase these things. All the invoices had been produced along with G.Rs and all the necessary documents were in possession of the driver before the I.C.C. and there was no intention to evade tax.

The counsel for the respondent-State has submitted that the Form VAT-XXXVI had not been issued to the appellant company for non producing invoices No. 526 and 527 before the I.C.C and the goods were detained as they seemed to be in excess of the invoices produced before the I.C.C.

The Coram comprising Ms. Justice Ritu Bahri mrs. Justice Manisha Batra observed that in the present case, the driver had produced the documents at I.C.C. and subsequently at the time of checking, he showed all the invoices. There was no attempt to evade tax. Hence, VAT appeal is allowed and no case for imposition of penalty is made out under Section 51(7)(c) of the Punjab VAT Act, 2005.

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