Excelsior Correspondent
JAMMU, July 31: In a significant ruling, the Division Bench of Jammu & Kashmir and Ladakh High Court comprising Justice Sanjeev Kumar and Justice Sanjay Parihar has dismissed the petition filed by the Commissioner of State Taxes and Assessing Authority, seeking a legal reference against M/s Reliance Jio Infocomm Ltd regarding the imposition of penalties under the Jammu & Kashmir VAT and GST Acts.
The Division Bench held that the penalty levied on Reliance Jio for bypassing a tax check post lacked legal foundation under the applicable Entry Tax Act of 2000.
The case stemmed from an incident dated November 15, 2016, when a vehicle carrying equipment belonging to Reliance Jio was intercepted at Lower Munda Check Post without clearance from Lakhanpur. A penalty of over Rs 1.48 crore was imposed under the J&K VAT Act, which was subsequently upheld by the Appellate Authority but overturned by the Sales Tax Tribunal.
The Tribunal had ruled that the imposition of penalty was unwarranted since the correct statutory provision under the Entry Tax Act had not been invoked, and more importantly, that the documents were neither fake nor false — the only grounds under which a penalty can be imposed under Section 4(3) of the Entry Tax Act, 2000.
Upholding the Tribunal’s findings, the High Court clarified that penalty provisions from other statutes like the VAT Act or the GST Act cannot be invoked unless specifically adopted by the Entry Tax Act. The Court noted that Section 6 of the Entry Tax Act only extends procedural, not penal, provisions from other laws.
The DB observed, “penalty is a statutory liability and in addition to tax. There must be a charging section to create liability. The Entry Tax Act only permits penalties when documents are fake or false, which was not the case”.
Follow our WhatsApp channel
