GOYAL TIMBER STORE Vs. STATE OF PUNJAB

JUDGEMENT

(1.) In this writ petition filed under articles 226/227 of the Constitution of India, the prayer is for quashing the order dated May 21, 2010 (annexure P4) passed by respondent No. 3 requiring the petitioner to deposit 25 per cent as required under section 62(5) of the Punjab Value Added Tax Act, 2005 (in short, "the Act"). The challenge is also made to order dated September 24, 2010 (annexure P6) passed by respondent No. 2 dismissing the appeal filed against order (annexure P4). Further direction has been sought for respondent No. 3 to hear the appeal filed by the petitioner without any pre-deposit. The facts necessary for adjudication of the present petition as narrated therein are that the petitioner-firm was running a saw mill and also doing the business of resale of wood and timber, etc., at Patiala and was holding TIN No. 0371067936. It filed its quarterly returns for the assessment year 2008-09 and annual statement in form VAT-20 and deposited the due tax as per returns. On October 20, 2009, the petitioner received a notice (annexure P1) from the Assistant Excise and Taxation Commissioner, Patiala-respondent No. 4 under section 29 of the Act for framing assessment for the year in question. In the notice, it was stated that as per VAT-20, tax-free purchases of Rs. 80,04,236 have been shown and correspondingly inter-State sale of Rs. 1,10,53,437 have been made which are from sale of timber sawn and sheesham, etc., and are not tax-free and the petitioner had not claimed any ITC on the tax-free purchases of sheesham. Accordingly, the designated officer while framing assessment had allowed the claim of tax-free purchases by calculating ITC to the tune of Rs. 3,52,458 on the purchases of only Rs. 28,19,664. Respondent No. 4 finding the explanation furnished by the petitioner to be not acceptable, searched its premises on October 23, 2009 under section 46 of the Act without following the due procedure. Thereafter, the petitioner received a notice dated November 17, 2009 (annexure P2) from respondent No. 4 for verification of the impounded documents. According to the petitioner, there was only one document impounded by the Inspecting Officer as the same could not be verified with the account books of 2009-10 at the time of inspection and has no relevancy with the said year and had also no relevancy with the assessment year 2008-09 as the same was an old document lying at the business premises unused. Respondent No. 4 calculated the suppressed purchase turnover at Rs. 76,36,401 and by adding profit determined the same at Rs. 83,08,404 on the basis of impounded document and added in the gross turnover for the assessment year 2008-09. Respondent No. 4 also imposed a penalty of Rs. 22,65,458 and charged interest of Rs. 2,03,891 and vide order dated December 10, 2009 (annexure P3), demand of Rs. 36,12,078 was made from the petitioner. Feeling aggrieved, the petitioner filed an appeal before respondent No. 3. Respondent No. 3 vide order dated May 21, 2010 (annexure P4) dismissed the appeal for non-deposit of 25 per cent of the demand. Still dissatisfied, the petitioner filed an appeal before the Tribunal. Along with the appeal, the petitioner filed an application for waiver of pre-deposit of 25 per cent of the demand amount. The Tribunal vide order dated September 24, 2010 (annexure P6) dismissed the appeal. Hence, the present writ petition.

(2.) Upon notice of motion having been issued, respondents Nos. 1 to 4 filed reply controverting the averments made in the writ petition. It was pleaded that the writ petition is liable to be dismissed for non-deposit of the amount as required under section 62(5) of the Act. According to the respondents, no evidence was produced by the assessee to show that the timber shown as tax-free was purchased direct from the farmers. Even no market fee paid by the petitioner on the purchase of timber was accounted for in its regular account books. It was further pleaded that the assessee had made an attempt to evade the tax.

(3.) The learned counsel for the petitioner submitted that the premises of the petitioner were searched in June, 2009 and in such a situation the concealment, if any, would relate to the assessment year 2009-10 whereas the same had been added to the assessment year 2008-09. It was further argued that there was a great hardship for asking the petitioner to deposit the amount before hearing of the appeal.