STATE OF PUNJAB Vs. OSWAL KNIT INDIA LTD

JUDGEMENT

(1.) THE State of Punjab has filed the instant petition challenging order dated 20.2.2007 (Annexure P.5) passed by the VAT Tribunal, Punjab in Appeal No. 264 of 2006-07.

(2.) BRIEF facts of the case are that on 13.8.2003, vehicle No. PB 10W 2992 reached Information Collection Centre, Shambu (Export). It was revealed that the goods were being transported from Ludhiana to Delhi. The driver of the vehicle produced challan No. 2346 and 2347 in respect of the goods both dated 13.7.2003 issued by M/s Oswal Knit India Ltd., Ludhiana. The goods were hosiery goods valued at Rs. 3,62,000/- in favour of Shri Navdeep Chhabra of New Delhi. At the ICC Centre it generated ST XXIV-A form a document which was lateron produced before the Excise and Taxation Officer on duty. It was found that 442 hosiery pullovers were sent to Shri Navdeep Chhabra, New Delhi showing the item as 'sample sets'. The price was worked out at Rs. 3,62,000/- on which tax @4.4% was charged in the bill. The Revenue found that such a big consignment of 442 sample sets of pullovers could not be considered in consonance with the practice of sending sample sets in the hosiery trade . It was suspected to be inter-state sale in the course of inter-state trade and commerce to an unregistered dealers sent under the garb of sample sets. Accordingly the goods were detained by the Detaining Officer under Section 14B(6)(i) of the Punjab General Sales Tax Act, 1948 vide order dated 13.7.2003. On notice, Shri D.P. Chopra, Accounts Officer of the Consignor company appeared but he did not produce account books nor any explanation was offered as to why the pullovers did not carry a tag showing them as sample sets. The Detaining Officer forwarded the case to the Assistant Excise and Taxation-Commissioner by treating the consignment as sale to unregistered dealer for taking action under Section 14B(7)(ii) of the Act. After issuance of show cause notice and making further enquiry the Assistant Excise and Taxation Commissioner reached the conclusion that there was an attempt to evade tax and accordingly he levied penalty of Rs. 90,000/- vide order dated 14.7.2003. The matter was taken in appeal before the Deputy Excise and Taxation Commissioner who held that the goods were infact sold in the course of inter-state sale as is amply proved by charging of 4.4% Central Sales Tax and that sending of large number of 442 pieces of pullovers of one size for a particular value would further lead to such an inference that the assessee- respondent was evading payment of sales tax. The Deputy Excise and Taxation Commissioner accordingly upheld the order of the Assistant Excise and Taxation Commissioner.

(3.) WE have heard learned counsel for the parties at a considerable length and find that the findings of fact have been recorded by the Tribunal which are based on the statements made in the invoices that the goods were being sent as sample sets. The contrary inferences drawn by the Excise and Taxation Commissioner and Deputy Excise and Taxation Commissioner have been found to be unwarranted especially when there was no evidence to that effect. Even the statement of Shri Navdeep Chhabra to whom the goods are supposed to be sold has not been recorded. The findings recorded by the Tribunal proceeds on the correct premise because evidence to that effect in the invoices and in the form of declaration is available on record whereas no evidence contradicting those facts have been brought on record. The findings of the Asstt. Excise and Taxation Commissioner and Dy. Excise and Taxation Commissioner are based on conjectures, surmises and suspicion. There is no evidence to sustain those findings as correctly observed by the Tribunal. There is thus no merit in the petition and the same does not merit admission.