Hon’ble Punjab VAT Tribunal in a significant judgment in case of M/s Katyal & Co., Jalandhar decided on 17.03.2017 has held that mere non furnishing of e-ICC Information under Rule 64B of the Punjab VAT Rules, 2005 is not a sufficient ground to levy penalty under Section 51 of the PVAT Act, 2005 when all the other documents accompanying the goods are proper. Mere non generation of e-ICC will not constitute an attempt to evade tax.
In the present case the goods were detained by the officers of Mobile Wing Fazilka and penalty was imposed for non generation of e-ICC. The appellant in the appeal contended that the server of the department was non functioning properly and in the given circumstances the appellant was left with no alternative then to send the goods without generation of e-ICC.
The appellant also submitted that the goods were covered with requisite documents and voluntarily reported at ICC and as such there could not be any attempt to evade tax.
The Hon’ble Tribunal departing from its earlier judgments has held that furnishing of E-ICC is as such not a mandatory document under Section 51 of the PVAT Act, 2005 and in the circumstances when the goods are covered with the documents as required under Section 51 no attempt to evade tax can be made out and in such like cases no penalty can be levied. The relevant extract of the judgment is reproduced below:
“Having heard the rival contentions and having gone through the record of the case, it is revealed that the goods under transaction were being taken out of the State of Punjab under the VAT invoices. The goods were voluntarily reported at the ICC. The excise duty @12%, education cess @2%, S&H Edu. Cess @ 1% and CST @2 % has been duly charged. The same being interstate, in no manner, the element of Punjab Tax was involved. Further more, the goods under transaction were accompanying the documents as prescribed u/d 51 of the Act, 2005. The e-ICC regarding the other transactions, which was being carried in the same truck has been generated one day earlier to the transaction in question, establishes the bonafides of the appellant and also proves some justification in the plea setup by the appellant that the e-ICC qua this transaction could not be generated due to the fault of the server.”
(Author: Varun Chadha (Advocate), Taxation Consultant Off: 3, Shastri Market-II, Jalandhar City. Ph: +91-9872200724 E-mail: firstname.lastname@example.org)