UNIQUE CHAINS Vs. STATE OF PUNJAB

JUDGEMENT

(1.) The assessee is in appeal before this Court against the order dated 20.02.2009 passed by the Value Added Tax Tribunal, Punjab (for short 'the Tribunal) in Appeal (VAT) No.73 of 2008-09 raising the following substantial questions of law: -

(2.) The facts in brief as recorded in the order of the Tribunal are that on 12.01.2008 information was received by ETO(MW) Amritsar from one Shri Gurdial Singh, SHO, GRP, Amritsar that their team had detained one Ankit Mehra who was carrying gold ornaments while travelling by Dadar Express train from Amritsar to Patiala. The ETO went to Beas Station and checked Ankit Mehra under Section 51 of the Punjab Value Added Tax Act, 2005 (for short 'the Act'). Gold ornaments were found from a bag in his possession. The examination of the goods revealed that these were not covered by proper and genuine documents as required under Section 51(2) of the Act. The gross weight of the gold ornaments was 8,135.320 gms and net weight 8,060.820 gms. The value thereof was assessed to be Rs. 76,61,246/-. The detaining officer issued show cause notice to the owner of the goods under Section 51(6)(b) of the Act. None appeared despite proper service. The matter was referred by the Detaining Officer to the Designated Officer for action under Section 51 of the Act. The AETC(MW) came to the conclusion that there was violation of Sections 51(2) and 51(4) of the Act with a view to avoid tax as the goods were taxable and meant for trade. The plea of the appellant that these goods were samples to show for getting orders or that these ornaments were prepared from gold given by the parties, was not accepted. Vide order dated 25.1.2008 passed by the AETC (MW) Amritsar penalty of Rs. 39,07,235/- was imposed under Sections 51(7)(c) read with Section 51(12) of the Act. The appeal filed by the appellant was dismissed by DETC(A), Jalandhar Division vide order dated 20.5.2008. The further appeal to the Tribunal was dismissed vide order dated 20.2.2009.

(3.) Before the Tribunal, it had been argued on behalf of the appellant that the provisions of Sections 51(2) and (4) of the Act were applicable only in a case where goods were being transported in a 'goods vehicle'. Relying on the definition of 'goods vehicle' as given in Section 2(1) of the Act, it was argued that a vehicle running upon fixed rails, was specifically excluded from the definition of 'goods vehicle'. Accordingly, as Ankit Mehra from whose possession, the gold ornaments were found, was travelling in a train, the provisions of Sections 51(2) and 51(4) of the Act were not attracted. Reliance was placed on a decision of this Court in International Switch Gears v. Union Territory of Chandigarh and others (1998) 109 STC 75 (P&H). The Tribunal, however, did not agree with the appellants. It was held that the judgment in Switch Gears case (supra) could not be relied upon as it was in relation to a case under Section 14-B of the Punjab General Sales Tax Act, 1948 (for short 'the Sales Tax Act'), as applicable to the Union Territory of Chandigarh, which at the relevant time did not have a proviso similar to that in Section 51(2) of the VAT Act. The first proviso to Section 51(2) of the Act reads as under:-