Rakesh Kumar Garg, J.@mdashThe assessee has filed the present appeal u/s 68 of the Punjab Value Added Tax Act, 2005 against the order of the Tribunal in Appeal No. 59 of 2007-08 (VAT) decided on October 30, 2007 (annexure P9) raising the following substantial questions of law:
(i) Whether there is any mens rea on the part of the appellant to evade the payment of tax for which the penalty can be imposed under Sections 56 and 60 of the Act?
(ii) Whether penalty u/s 56 of the 2005 Act can be imposed only where the designated officer records his satisfaction that there is concealment on part of the assessee/dealer and such concealment is with an intention and/or in order to evade or avoid payment of tax?
(iii) Whether issuing the show cause notice qua the penalty specified in the notice is required before such penalty can be imposed actually after inspection of records, etc., by the designated officer as envisaged u/s 61 of the VAT Act read with Rule 50(1)(c) of the VAT Rules 2005?
(iv) Whether the notice to show cause under Rule 50(1)(c) would require specifying the provisions under which the penalty is proposed to be imposed as also the quantum of the penalty to be imposed? (v) Whether, on the facts and in circumstances of the case, tax can be claimed on account of a bona fide omission of a particular purchase being reflected in the quarterly returns when no purchase tax is payable under the VAT Act in respect of the said item?
(vi) Whether, on the facts and in the circumstances of the case, penalty can be imposed in respect of a bona fide omission in the quarterly returns filed by the assessee as prepared by his accountant when it was the first year of the new enactment coming into force and there being no mens rea to evade or avoid payment of tax on the part of the assessee?
(vii) Whether, on the facts and in the circumstances of the case, penalty can be imposed, on a harmonious reading of Rules 36 and 40 of the Punjab VAT Rules, 2005, for a bona fide omission of a particular entry in quarterly returns filed under Rule 36 before the filing of annual statement filed under Rule 40 of the said Rules?
(viii) Whether the appellate authorities are required to deal and give a finding on each of the contentions raised on behalf of the appellant?
(ix) Whether, on the facts and in the circumstances of the case, penalty upon the dealer can be imposed in view of the settled law of the honourable Supreme Court as 118 ITR 236 (sic) and [1970] 25 STC 211 Hindustan Steel Ltd. v. State of Orissa?
(x) Whether the first appellate authority is, in the facts and circumstances of the case, under legal duty to satisfy himself regarding the disputed questions of facts in the impugned order by summoning the records of the case and other means?
(xi) Whether penalty, in the facts and circumstances of the case, can be imposed for bona fide omission in quarterly returns when there is no such omission in the annual statement duly filed under Rule 40 of the VAT Rules, 2005?
2. The appellant is a dealer registered under the provisions of the Punjab Value Added Tax Act, 2005 (hereinafter referred to as "the VAT Act, 2005") and is engaged in the business of purchase and sale of bed sheets, blankets, etc., having its place of business at Moga, District Moga. The appellant filed his four quarterly returns under the VAT Act, 2005 during the year 2005-06. During the course of scrutiny of returns, it was noticed by the Designated Officer-cum-Excise and Taxation Officer, Moga that the dealer/assessee had made purchases of bed sheets and blankets, etc., from outside the State of Punjab and after comparing the data of inter-State purchases available in computer system of the department it was found that the dealer has omitted to reflect in returns, purchases worth Rs. 4,85,024.
3. Accordingly, a notice was issued to the dealer on September 13, 2006 for verifying the facts. Sh. Chamkaur Singh, proprietor of the firm appeared on September 14, 2006 and was confronted with the facts of non-showing of ICC data in returns. He requested for an adjournment to reconcile the data and the case was adjourned to September 29, 2006. On September 29, 2006, the assessee was present with his counsel when they were asked to explain reasons for non-showing of inter-State purchases worth Rs. 4,85,024 in their returns/accounts. However, they were unable to explain the same and therefore, it was brought to their notice that their action amounts to suppression of purchases made by the dealer/assessee and the same is liable for imposition of penalty/tax at the prevailing rate. The dealer/assessee who were unable to give any suitable explanation for the lapse on his part and action, requested for the adjournment. The case was adjourned to October 6, 2006. On the said date, the proprietor Sh. Chamkaur Singh along with his Advocate Sh. V.K. Bansal was present and when they were asked to explain the reasons for non-showing the amount of purchases in their returns, they admitted that it was a lapse on their part and requested for taking a lenient view while imposing tax/penalty.
4. In view of the above admission of the assessee, he was assessed. The relevant part of the order of the assessing officer is reproduced hereinafter below:
I have gone through the facts of the case. The dealer has failed to reflect the inter-State purchases of goods worth Rs. 4,85,024 in his account books/returns for the year 2005-06. The dealer has no satisfactory explanation in his defence and admitted his fault.
From the foregoing discussions, it is clear that the dealer has suppressed his purchases worth Rs. 4,85,024 and resultantly sales have also been suppressed. Keeping in view the circumstances of the case, the case is provisionally assessed as under:
Inter-State purchases not shown in returns
is treated as suppressed purchases : Rs. 4,85,024
Tax at four per cent : Rs. 19,401
Penalty u/s 56 of Punjab VAT Act : Rs. 38,802
Penalty u/s 60 of Punjab VAT Act : Rs. 2,000
Total : Rs. 60,203
Total due : Rs. 60,203
Issue TDN and challan form for Rs. 60,203 along with a copy of this order.
Sd/-
(Jagtar Singh)
Designated Officer-cum-Excise
and Taxation Officer, Moga.
5. Aggrieved against the said order, the assessee-appellant filed an appeal before the Deputy Excise and Taxation Commissioner (Appeals) stating therein that the said purchases were not being reflected in quarterly returns on account of the bona fide omission and in any case the penalty imposed at the rate of 200 per cent of tax is highly excessive and uncalled for. The appeal filed by the assessee was dismissed by the Deputy Excise and Taxation Commissioner (Appeals) vide his order dated February 19, 2007. The assessee further filed an appeal before the Tribunal. However, the Tribunal also dismissed the appeal vide its order dated October 30, 2007.
6. Mr. Puneet Kansal, Advocate appearing for the petitioner, has vehemently argued that Section 56 of the VAT Act, 2005 envisages that penalty can be imposed upon a person only when the designated officer is satisfied that the concealment of any particulars in any return furnished by any person is with an intention or in order to evade or avoid payment of tax and the mere omission of any particulars in the return ipso facto does not envisage imposition of penalty. Thus, according to him, for imposition of penalty the pre-conditions are that the omission must be in the nature of concealment and further such concealment should be with the intention or in order to evade or avoid of payment of tax.
The learned Counsel has argued that there is no finding by the assessing officer that the omission of the purchases not being reflected in the quarterly returns is in the nature of concealment and that such concealments are being done with an intention or in order to evade or avoid the payment of tax. He has further argued that in any case the omission of non-reflection of the purchases in the quarterly returns was on account of bona fide omission on the part of the accountant of the appellant-firm, that being the first year of the enactment of the VAT Act in the State of Punjab and further the bona fides are proved from the fact that the said purchases have been duly reflected in the account books of the firm.
7. Learned Counsel has further argued that in the case in hand, the principle of natural justice has not been complied with as the appellant has not been given an opportunity to show cause for imposing penalty. In support of his contentions Mr. Puneet Kansal, Advocate, has relied upon
We have heard learned Counsel for the appellant and perused the record.
8. The Punjab Value Added Tax Act, 2005 came into force with effect from April 1, 2005. The said Act has been enacted to provide for the levy and collection of value added tax and turnover tax on the sales or purchases of goods and for matters connected therewith and incidental thereto, and for the repeal of the Punjab General Sales Tax Act, 1948. Further Rules have been framed under the Act. The provisions for incidence and levy of tax have been provided in Chapter II of the said Act. Chapter V of the said Act provides a procedure and administration of tax, i.e., for submission of the returns and payment of the tax. Under Chapter IX a provision has been made for establishment of a check-post or information collection centres and such place or places, as may be specified in the notification issued by the Government with a view to prevent or check avoidance or evasion of tax under the VAT Act and as per the provisions of Section 51 of the Act. The owner or person-in-charge of a goods vehicle is under an obligation to give necessary information regarding the goods being brought in the State of Punjab. Chapter X of the Act provides for penalties to be imposed for failure to pay tax and also for imposition of penalty for evasion of tax.
9. The relevant provisions of the Punjab VAT Act, 2005 are reproduced hereinafter below:
6. Incidence of tax.--(1) Every person, except a casual trader and one dealing exclusively in goods declared tax-free u/s 16, whose gross turnover during the year immediately preceding the commencement of this Act or during any year subsequent thereto, exceeded the taxable quantum, as provided in Clause (a) of Sub-section (3), shall be liable to pay tax under this Act by way of VAT on the taxable turnover.
(2) Every person, except a casual trader and one dealing exclusively in goods declared tax-free u/s 16, whose gross turnover during the year immediately preceding the commencement of this Act or during any year subsequent thereto, exceeded the taxable quantum, as provided in Clause (b) of Sub-section (3), shall be liable to pay tax under this Act by way of TOT on the taxable turnover.
(3) For the purpose of this section, the expression ''taxable quantum'' means
(a) for registration as a taxable person for VAT,-
(i) in relation to any person, who imports taxable goods for sale or use in manufacturing or processing any goods in the State, rupee one ;
(ii) in relation to a person, who receives goods on consignment/ branch transfer basis from within or outside the State on which no tax has been paid under this Act, rupee one ;
(iii) in relation to a person, liable to pay purchase tax u/s 19, rupee one ;
(iv) in relation to a person, who is a manufacturer, rupees one lac ;
(v) in relation to voluntary registration, rupees five lac ; and
(vi) in relation to any other person, rupees Substituted for the words "thirty lac" by Punjab Value Added Tax (Amendment) Ordinance (6 of 2005), w.e.f. 5-5-2005 [fifty lac]
(b)for registration as a registered person for TOT,-
in relation to a person other than those specified in Clause (a), whose turnover during the preceding year is more than rupees five lac, but below rupees Substituted for the words "thirty lac" by Punjab Value Added Tax (Amendment) Ordinance (6 of 2005), w.e.f. 5-5-2005 [fifty lac].
(4) Every person, who has become liable to pay tax under this Act, either by way of VAT or TOT, shall continue to be so liable, until the expiry of three consecutive years during each of which his gross turnover does not exceed the taxable quantum and such further period after the date of such expiry, as may be specified by notification by the State Government and on the expiry of such specified period, his liability to pay tax, shall cease.
(5) Every person whose liability to pay tax has ceased under Sub-section (4), shall again be liable to pay tax under this Act from the date on which his gross turnover again exceeds the taxable quantum.
(6) Every casual trader shall be liable to pay tax under this Act by way of VAT on the taxable turnover including sales through agent within the State.
7. Liability of person registered under the Central Sales Tax Act, 1956.�The person registered under the Central Sales Tax Act, 1956 (Central Act No. 74 of 1956), shall be liable to pay VAT under this Act on any sale made by him within the State, irrespective of the fact that he is not liable to pay tax u/s 6 of this Act. However, the provisions of this section shall not apply in case of a person, who deals exclusively in goods declared tax-free u/s 16.
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26. Returns.--(1) Every taxable person shall make self-assessment of tax and shall file return for a period, within such time and in such form as may be prescribed.
(2) Every registered person shall make self-assessment of tax and shall file return for a period, within such time and in such form as may be prescribed.
(3) Every person shall, in such manner, as may be prescribed, pay into a Government Treasury or any bank authorised to transact Government business or at the District Excise and Taxation Office, the full amount of tax due from him as per provisions of this Act and shall furnish along with the returns, receipt from such Treasury or Bank or District Excise and Taxation Office, as the case may be, showing the payment of such amount:
Provided that no payment of such amount shall be accepted at the District Excise and Taxation Office, except through a bank draft or crossed cheque drawn on a local Scheduled Bank in favour of the designated officer.
(4) If any person referred to in Sub-sections (1) and (2), discovers any bona fide error or omission in any return furnished by him, he may rectify such error or omission in the return, due to be filed immediately following the detection of such error or omission. If such rectification results in a higher amount of tax to be due than the original return, it shall be accompanied by a receipt for payment of the additional amount of tax, payable along with the interest at the rate specified under this Act for the period of delay, in the manner prescribed in Sub-section (3). No such rectification shall, however, be allowed after the end of the financial year immediately following the year to which the rectification relates or issue of a notice for audit or assessment, whichever is earlier. Where such rectification results in excess amount of tax having been paid than due, such excess tax shall be refundable on application as per provisions of this Act and the Rules framed thereunder. No adjustment shall, however, be allowed for such excess payment.
(5) In addition to any return under Sub-sections (1) and (2), the Commissioner or the designated officer may, require a taxable person or a registered person to furnish such further information along with the returns or at any other time, as may be deemed necessary.
(6) Notwithstanding anything contained in this section, the Commissioner or the designated officer, as the case may be, may by notice, direct a person other than a taxable person or a registered person, to file returns at such intervals and in such form and containing such information, as may be required.
(7) Every taxable person or registered person, as the case may be, shall file an annual statement in such form and in such manner, as may be prescribed.
(8) A taxable person or a registered person, whose registration is cancelled u/s 24, shall file such final return, as may be prescribed, within thirty days from the date of cancellation by the Commissioner or the designated officer, as the case may be.
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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, as may be specified in the notification.
(2) The owner or person-in-charge of a goods vehicle shall carry with him a goods vehicle record, goods receipt, a trip sheet or a logbook, 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 and produce a copy each of the aforesaid documents to an officer-in-charge of a check-post or information collection 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 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-in-charge of the goods vehicle shall stop the vehicle and keep it stationary, as long as may reasonably be necessary, and allow the officer-in-charge 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-in-charge of the vehicle or of the goods.
(4) The owner or person-in-charge of 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) along with the documents in respect of the goods carried in such vehicle before the officer-in-charge of the check-post or information collection centre. The officer-in-charge shall return a copy of the declaration duly verified by him to the owner or person-in-charge of 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-in-charge of such vehicle shall furnish, in duplicate, to the officer-in-charge of the check-post or information 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-in-charge of the goods vehicle, shall deliver within forty-eight hours the aforesaid copy to the officer-in-charge 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-in-charge 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-in-charge 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 vehicle or the employee of transport company or goods booking agency, shall produce for examination, transport receipts and all other documents and accounts book 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-in-charge 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 recorded in writing and after hearing the person concerned, order detention of the goods along with 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 in-charge 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 along with the vehicle for a period not exceeding seventy-two hours subject to orders under Clause (c) of Sub-section (7).
(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 in-charge 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 along with 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 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 Sub-sections (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 impos-able and shall decide the matter finally within a period of fourteen days from the commencement of the enquiry proceedings ; and
(d) The officer-in-charge 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 realised or the enquiry officer orders release of the detained goods after enquiry, whichever is earlier.
(8) In the event of the consignor or consignee of the goods not paying the penalty imposed under Sub-section (7), within thirty days from the date of the commencement of the order imposing the penalty, the goods detained, shall be liable to be sold by the officer, who imposed the penalty for realisation of the penalty, by public auction in the prescribed manner. If the goods detained are of perishable nature or subject to speedy or natural decay or when the expenses of keeping them in custody are likely to exceed their value, the officer-in-charge of the check-post or information collection centre or any other officer referred to in Sub-section (2), as the case may be, shall order immediately to sell such goods or otherwise dispose them of after giving notice to the consignor or consignee in the prescribed manner. The sale proceeds shall be deposited in the State Government Treasury and the consignor or consignee of the goods shall be entitled to only the balance amount of sale proceeds after deducting the amount of penalty, interest and expenses and other incidental charges incurred in detaining and disposing of the goods:
Provided that if the consignor or consignee of the goods does not come forward to claim the goods, then the entire sale proceeds, shall be deposited in the State Government Treasury and no claim for balance amount of sale proceeds shall be entertained from any other person.
(9) The officer detaining the goods shall issue to the owner of the goods or his representative or the driver or the person-in-charge of the goods vehicle, a receipt specifying the description and quantity of the goods so detained and obtain an acknowledgement from such person or if such person refuses to give an acknowledgment, then record the fact of refusal in the presence of two witnesses.
(10) If the order of detention of goods under Sub-section (6) or of imposition of penalty under Sub-section (4), or Sub-section (7) or order under Sub-section (8), is in the meantime set aside or modified in appeal or other proceedings, the officer imposing the penalty shall give effect to the orders in such appeal or other proceedings, as the case may be.
(11) No person or any individual including a carrier of goods or agent of a transport company or booking agency, acting on behalf of a taxable person or a registered person, shall take delivery of, or transport from any station, airport or any other place, whether of similar nature or otherwise, any consignment of goods, other than personal luggage or goods for personal consumption, the sale or purchase of which, is taxable under this Act, except in accordance with such conditions, as may be prescribed, with a view to ensure that there is no avoidance or evasion of the tax imposed by or under this Act.
(12) Where a transporter fails to give information as required under Sub-section (2) about the consignor or consignee of the goods, within such time, as may be specified, or transports the goods without documents or with ingenuine documents, he shall be liable to pay, in addition to the penalty leviable under this section, the tax due on such goods at the VAT rate applicable under this Act.
(13) The provisions of this Act shall, for the purpose of levy and collection of tax, determination of interest and recovery of tax and interest, apply to the transporter.
Explanation.--(1) For the purposes of this section, where goods are delivered to a carrier, a goods booking agency or any other bailee for transportation, the movement of the goods shall be deemed to commence at the time of such delivery and terminate at the time, such delivery is taken from such carrier, goods booking agency or any other bailee, as the case maY be.
(2) For the purpose of Sub-section (7), service of notice on the representative of the owner or the driver or other person-in-charge of the goods vehicle, shall be deemed to be a valid service on the consignor or consignee of the goods.
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54. Penalty for failure to file return or annual statement.�If a person registered under this Act or any other person required to furnish return or annual statement without sufficient cause,�
(a) fails to furnish any return or annual statement by the prescribed date; or
(b) fails to furnish along with the return or annual statement, the proof of payment of tax in accordance with the provisions of this Act ; or
(c) fails to rectify any error or omission in any return or annual statement in accordance with the provisions of this Act; or
(d) fails to comply with the requirements of any notice issued under this Act,
the Commissioner or the designated officer, may, direct him to pay in addition to tax, interest and penalty under any other provisions of this Act, a further penalty of a sum of rupees one hundred, per day of default, subject to the maximum of rupees ten thousand.
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56. Penalty for evasion of tax.--If the Commissioner or the designated officer is satisfied that the person, in order to evade or avoid payment of tax,-
(a) has concealed any particulars from any return furnished by him; or
(b) has deliberately furnished incorrect particulars therein; or
(c) has concealed any transactions of sale or purchase from his account books; or
(d) has not maintained intelligible accounts, which prevent the Commissioner or the designated officer to assess the tax due from him; or
(e) has availed input tax credit to which he is not entitled to; or
(f) has claimed refund which was not due to him; or
(g) has claimed credit in respect of tax, which was not actually paid,
he shall direct that the person shall pay, by way of penalty, in addition to the tax and interest payable by him, a sum equal to twice the amount of tax, assessed on account of the aforesaid reasons.
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61. Authority competent to impose penalty.--The Commissioner or the designated officer shall be the competent authority officer to impose penalty under this Act. No penalty shall, however, be imposed, unless the person concerned is afforded an opportunity of being heard by serving a notice." It is also useful to refer to the relevant provisions of the Punjab VAT 1 Rules, 2005 hereinafter below:
36. Returns.--(1) Every taxable person shall file quarterly self-assessed return in Form VAT-15 within a period of thirty days from the date of expiry of each quarter along with the proof of the payment made into the appropriate Government Treasury and the tax deductions at source (hereinafter referred to as the TDS) certificates, if any:
Provided that where a person opts to make the payment of tax through crossed cheque or bank draft, he shall enclose the crossed cheque or the bank draft, as the case may be, along with the return, which shall be filed within a period of twenty days from the date of the expiry of the quarter:
Provided further that a person, whose annual gross turnover exceeds rupees one crore in the previous year, shall determine his tax liability for every month and shall pay tax by the 20th day of the month, if paid through the crossed cheque or draft and by the 30th day of the month, if paid through the treasury receipt and shall submit the same to the Designated Officer, along with the information in Form VAT-16 ; and payment for the last month of each quarter shall be made on the 20th or the 30th day of the close of quarter, as the case may be, along with the quarterly return. The return in form VAT-15, shall be accompanied by photocopies of the treasury receipt evidencing the payment of tax for the previous two months also:
Provided further that notwithstanding the fact that even if no tax becomes due or payable in a particular month, the person referred to in the second proviso, shall have to furnish information in form VAT-16:
Provided further that a person making sales in the course of inter-State trade or export out of India may, by making an application to the designated officer, opt to file self-assessed return on monthly basis in form VAT-15 within a period of twenty days, if payment of tax is made by a crossed cheque or draft and within a period of thirty days, if payment is made through a treasury receipt.
(2) Every registered person, shall file quarterly self-assessed return in form VAT-17 within a period of thirty days from the date of expiry of each quarter along with the proof of payment made into the appropriate Government Treasury and the TDS certificates, if any:
Provided that a person, who opts to make payment of tax through the crossed cheque or bank draft, he shall enclose the crossed cheque or the bank draft, as the case may be, along with the return, which shall be filed within a period of twenty days from the date of the expiry of the quarter.
(3) In the case of a taxable person or a registered person, having more than one place of business in the State, returns shall be submitted by the authorised person of principal place of business in the State and shall include the total value of goods sold or purchased or transferred by all additional places of business of such taxable person or registered person, as the case may be.
(4) In the event of cancellation of registration, the taxable person or registered person, as the case may be, shall file a final return in form VAT-15 or form VAT-17, as the case may be, within a period of thirty days of such closure along with a statement of stock existing on the date of closure.
(5) A return in Form No.VAT-15 or VAT-17, as the case may be, shall be in duplicate. The original copy, shall be retained by the designated officer and the duplicate copy shall be returned to the person after acknowledging the same by signing and affixing the official stamp and the receipt number.
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40. Annual statement.--(1) In addition to the returns prescribed under Sub-rules (1) and (2) of Rule 36, every taxable person and registered person, shall file an annual statement in form VAT-20 or form VAT-21, as the case may be, by giving therein the final liability of tax for the year by the 20th day of November in case of a taxable person and by the 20th day of August in case of a registered person. This statement shall be accompanied by the receipt, evidencing the payment of tax less paid, if any, together with due interest thereon, and the details of the goods in stock existing on the 31st day of March of the year to which the statement relates.
(2) Every taxable person shall also furnish along with the annual statement, a copy of the trading account, profit and loss account and balance sheet as on the 31st day of March of that year along with statutory declaration in form D and other relevant forms under Central Sales Tax Act, 1956.
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50. Manner of imposition of penalty for offences under the Act and payment of such penalty.�(1) Where it appears to the Commissioner or the designated officer, as the case may be, that it is necessary to proceed against a person u/s 52, 53, 54, 55, 56, 57, 58, 59 or 60, as the case may be, such officer shall serve upon such person a notice, directing him to appear before him in person or through an authorised agent and,-
(a) to produce before him the books of account, registers or documents for examination ;
(b) to explain the books of account or documents produced by such person or evidence that came into possession of any of the said officer; and
(c) to show cause on the date specified in such notice, why penalty specified as in the notice, should not be imposed on him.
(2) The person may, if he so wishes, prefer any objection in writing or he may adduce any evidence in support of his contention on the date of hearing.
(3) After examining the books of account, documents or evidence, produced by the person and considering his objection, the Commissioner or the designated officer, as the case may be, if satisfied with the explanation given or on the basis of the evidence, furnished, may not impose penalty. In case, no satisfactory explanations is forthcoming, the officer, shall impose penalty upon the person under the relevant section, for the amount as provided under the Act and serve a notice upon such person, directing him to make payment of the amount in accordance with the provisions of the Act and these Rules and to produce the treasury challan in proof of such payment, by the date, specified in the said notice. The officer shall, in every such case, pass a self speaking order, giving therein reasons for the action taken.
11. From a bare perusal of the provisions of the Act and the Rules framed thereunder, as reproduced above, it is clear that under Rule 36 of the Punjab VAT Rules, 2005, it is obligatory on every taxable person to file a quarterly self-assessed return in form VAT 15 within a period of 30 days from the date of expiry of each quarter along with proof of payment made into the appropriate Government Treasury and the tax deductions at source certificate, if any, and a penalty is imposable u/s 54 of the Act if a person registered under the Act fails to furnish any such return or annual statement without sufficient cause. It is further clear that under the provisions of Section 56 the designated officer/Commissioner has the power to impose penalty if he is satisfied that such person in order to evade or avoid payment of tax has concealed any particulars from any return furnished by him.
12. In the present case, admittedly, the appellant had not reflected the inter-State purchases of bed sheets and blankets of the value of Rs. 4,85,024 in quarterly returns submitted for the year 2005-06 and this omission on the part of the appellant was found during the course of scrutiny of returns while comparing the data of inter-State purchases available in the computer system of the department. Admittedly, the appellant was issued a show cause notice vide annexure PI to submit his explanation for the lapse on his part. It is also not disputed that despite the three adjournments, the appellant failed to submit any explanation with regard to the non-reflection of inter-State purchases of bed sheets and blankets in his returns. During these proceedings, it was also brought to the notice of the assessee-appellant that the laps/omission on his part amounts to suppression of purchases and the same is liable for imposition of penalty/tax at the prevailing rate. However, on October 6, 2006, the proprietor of the appellant-firm in the present case and his Advocate admitted the omission on their part and requested for taking a lenient view while imposing tax/penalty and therefore, the arguments raised by the learned Counsel for the appellant in the present appeal are devoid of any merit. The judgment in
13. The learned Counsel for the appellant has argued that the designated officer while imposing the penalty has not afforded an opportunity of being heard by serving a notice upon the appellant as provided under Rule 50(l)(c) read with Section 61 of the Punjab VAT Act, 2005. The said argument is without any force. From the resume of facts, it is crystal clear that the appellant was given enough opportunity of being heard and to explain the reasons for non-reflection of inter-State purchases worth Rs. 4,85,024 in his return and also that this action on his part amounts to suppression of purchases and the same is liable for imposition of penalty/tax. Thus, from these facts, it is clear that he was given an opportunity of being heard before imposing the penalty. The other argument of counsel for the appellant, to the effect that there is no finding recorded by the designated officer to the effect that the appellant has attempted to evade tax and in the absence of such a finding, the order of the designated officer imposing the tax/penalty is liable to be quashed, is also liable to be rejected. The omission on the part of the appellant was not bona fide as the appellant has not shown any sufficient reasons for non-reflection of inter-State purchases in his returns. The ignorance of law on the part of the accountant of the firm as pleaded by the appellant has no legs to stand. Admittedly, the appellant is carrying on his business for the last so many years and was earlier registered under the Punjab General Sales Tax Act, 1948 and was filing returns. In view of this fact alone, it cannot be taken that his accountant was not knowing that all the inter-State purchases are to be shown in the returns filed by the appellant under the VAT Act. From the perusal of the order of the designated officer, annexure PI, we find that he has given a clear finding that the dealer has suppressed his purchases worth Rs. 4,85,024 and resultantly, the sales have also been suppressed and the dealer has not furnished satisfactory explanation in his defence and has admitted his fault.
14. In view of this, we find no ground to interfere with the impugned orders JAS no question of law, much less substantial, as raised by the appellant in para No. 3 of the appeal, arises for the determination by this court. Hence, the appeal is dismissed in limine.
