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222 Goods & Services Tax Cases - Reports [Vol. 1 by the First Appellate Authority. However, we feel, the petitioner can be granted further reduction of penalty provided the tax on the sale of old vehicle is later paid by the petitioner and the petitioner has remitted the tax along with interest. If the petitioner has remitted the tax on sale of old vehicles, either voluntarily by revising the returns, or after assessment, after detection of suppression by the Intelligence Officer and the tax along with interest for the belated period, which is also payable in terms of section 31(6) of the KVAT Act is paid, then the penalty will stand reduced to 25 per cent of the tax payable on the sale of the old vehicle. The petitioner is directed to produce certificate from the Assessing Officer about payment of tax and interest on the sale of old vehicles as above for the above two years and if such certificate is produced, the Intelligence Officer will after rechecking the correctness of the same, reduce the penalty to 25 per cent of the tax liability and excess penalty if any paid should be refunded to the petitioner. However, if the petitioner does not produce proof of payment of tax and interest as above, then the penalty fixed by the Tribunal at equal amount of tax will stand confirmed. The Tax Revisions are disposed of as above. ■■ [2010] 1 GST 222 (PUNJ. & HAR.) HIGH COURT OF PUNJAB AND HARYANA New Model Industries (P.) Ltd. v. State of Punjab* M.M. KUMAR AND JASWANT SINGH, JJ. VATAP NO. 26 OF 2009 NOVEMBER 11, 2009 SALE - Assessment year 1993-94 - Whether manufacturing of bus bodies on chassis as per design, specifications and seating capacity supplied by customers, amounted to sale of motor vehicle bodies, and is liable to tax under provisions of Act - Held, yes [Section 68 of Punjab Value Added Tax Act, 2005] FACTS The assessee was engaged in the manufacturing of bus bodies on the *In favour of revenue. GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 98 A B C D E F G
2010] New Model Industries (P.) Ltd. v. State of Punjab (Punj. & Har.) 223 A B C D E F G chassis as per design, specifications and seating capacity supplied by its customers. It also undertook repair work and resale of iron and steel. In the course of assessment, the assessing authority came to the conclusion that there was sale of motor vehicle bodies and the transactions were not of work contract as claimed by the assessee. It was further held that the sales were carried out within the State and, thus, liable to sales tax. Accordingly, demand towards tax was raised and penalty under section 10(7) was also imposed. The appeal preferred by the assessee was dismissed by the appellate authority. On second appeal, the Tribunal held that the assessee was liable to pay tax, however, it set aside the penalty order. On appeal : HELD In view of the decision of the Supreme Court in the case of CCT v. M.G. Bros. [1975] 35 STC 24, it was to be held that the Tribunal was justified in holding that the erection of body on the chassis would amount to sale. [Para 8] Further, there were categorical findings recorded by the Tribunal that the agreement stipulated fabrication of bus bodies on the chassis which were supplied by the Haryana Roadways to the assessee. A fixed price was to be realized for each of the bus body to be fabricated on the chassis and no material for fabrication of bus body was to be supplied by the Haryana Roadways. Accordingly, the Tribunal on the basis of facts had concluded that there was no other possible construction except to infer that there was sale within the State of Punjab, which was liable to tax especially when the assessee had obtained ‘D’ Forms from Haryana Roadways as was mandatory in case of sale made to the Government Department which was chargeable to tax at lower rate. [Para 10] On the issue of inter-State sale, the Tribunal had opined that even if the contention raised by the assessee was accepted and it was treated as an inter-State sale on account of movement of goods from Punjab to Haryana still the fact remained that the tax was assessable at the rate of 4 per cent which had been charged by the respondent State. Accordingly, the Tribunal had concluded that no useful purpose would be served by remanding the matter for fresh assessment, especially when the assessee did not show the transaction to be an inter-State sale. Therefore, it was opined that there would be no tax effect on the assessee in the facts and circumstances of the case. Accordingly, while leaving the question of law open, instant appeal was to be dismissed. [Para 11] CASE REVIEW CIT v. M.G. Bros. [1975] 35 STC 24 (SC) (para 8) followed. CASES REFERRED TO State of Gujarat v. Variety Body Builders [1976] 38 STC 176 (SC) (para 7), CCT v. M.G. Bros. [1975] 35 STC 24 (SC) (para 8) and State of Punjab v. Himachal Government Timber Depot [1985] 58 STC 265 (Punj. & Har.) (para 9). GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 99
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