N.S.S. ENTERPRISES Vs. STATE OF PUNJAB

JUDGEMENT

(1.) Impugning the order dated 5.12.2006 (Annexure A8), the appellant-assessee-N.S.S. Enterprises (for brevity the assessee) has directed the present appeal, vide which, VAT Tribunal, Punjab, Chandigarh has dismissed its appeal. 2. The brief facts, relevant for disposal of present appeal and emanating from the record, are that the assessee is engaged in the business of trading of bardana, scrap and other disposal of goods. The assessee claimed that in the normal course of the business, it submitted a tender with MSTC Ltd., which is a Government of India enterprise, for purchase of unserviceable crawler tractors, which was accepted and the goods were sold to it (assessee), after deduction of TCS at the rate of 1.1% under Section 206-C of the Income Tax Act. Government of India enterprise issued order-cum-acceptance letter dated 9.3.2004 (Annexure A1) and sale invoice dated 17.3.2004 (Annexure A2). The crawler tractor purchased by the assessee was further stated to have been sold by it (assessee) to M/s Jagdish Narain Indira Bahadur, Kolkata vide Bill No. 2365 dated 27.3.2004 for Rs. 703800/-including CST @ 2%, vide Bill/cash Memo dated 27.3.2004 (Annexure A3). These goods are being transported through M/s Pappu Transport Company, Pathankot in vehicle No. HR-38-5119 alongwith GR No. 551 dated 27.3.2004.

(2.) While the goods were going to Kolkata, the driver of the vehicle voluntarily stopped the said vehicle at ICC (Export) Shambhu for generation of necessary information as prescribed under the provisions of the Punjab General Sales Tax Act, 1948 (for short the Act). The driver submitted the accompanying bill and GR to the computer operator and generated the necessary information. It was pointed out that CST @ 2%, on inter state sale, has been charged instead of tax @ 4%, which is leviable on the sale of machinery. Consequently, the vehicle was detained under Section 14-B(6)(i) of the Act and notice dated 1.4.2002 (Annexure A4) was issued to the assessee.

(3.) In the wake of notice, the assessee explained that the goods are sold by MSTC Limited, a Government of India Enterprise, as a scrap and it (assessee), under the bonafide impression, charged CST @ 2%, which is leviable on the scrap, as per the notification issued under Section 8 (5) of the Act.