1985 (7) TMI 333 - HC - VAT and Sales Tax

Summary

Issues:
Application for reference under section 15(2)(b) of the Rajasthan Sales Tax Act - Imposition of penalty under section 22(6) - Requirement of actual seizure of goods before imposing penalty.

Analysis:
The case involved an application filed by the Assistant Commercial Taxes Officer under section 15(2)(b) of the Rajasthan Sales Tax Act, seeking a reference to the High Court regarding the imposition of a penalty under section 22(6) of the Act. The penalty in question was imposed on a dealer-respondent for possessing unaccounted goods worth Rs. 6,350, which were not reflected in the dealer's books of account. The assessing authority imposed a penalty of Rs. 1,270 under section 22(6) of the Act after a notice was issued, and the dealer-respondent expressed willingness to pay the penalty but requested not to seize the goods. An appeal was filed against the penalty, and the Deputy Commissioner (Appeals) set it aside. However, the revision petition by the assessing authority was dismissed by a Single Member of the Board, and a special appeal was also dismissed by the Division Bench of the Board.

The main contention in the case was whether actual seizure of goods was necessary before imposing a penalty under section 22(6) of the Act. The assessing authority argued that the power to seize goods did not require actual seizure, while the dealer-respondent's counsel emphasized the necessity of actual seizure based on the object and scheme of the Act. The Court analyzed the relevant provisions of section 22(6) and noted that the expression "power to seize" referred to actual seizure of goods, as supported by the proviso and subsequent clauses of the section. The Court referred to previous decisions by the Board, such as Bhonrilal Gopal Dass's case and Commercial Tax Officer, Jaipur v. Thakurdas Khatri & Sons, which held that penalty could only be imposed if the unaccounted goods were seized.

The Court further discussed other cases, including Commercial Tax Officer, Special Circle I, Jaipur v. Rallis India Ltd., and Assistant Commercial Tax Officer (A.E.) v. Mohanlal Sohanlal, which reiterated the requirement of actual seizure for imposing a penalty under section 22(6). The Court concluded that the consistent view of the Board was correct, and the imposition of penalty without actual seizure was not justified. The Court upheld the decisions of the Board and dismissed the reference application, affirming that the penalty could not be imposed under section 22(6) without the actual seizure of goods. The Court found the Board's interpretation of the law to be correct and declined to interfere with the appellate order dated 16th April, 1979.

In conclusion, the Court dismissed the reference application, treating it as a revision under the amended Act, and upheld the decision of the Board regarding the necessity of actual seizure before imposing a penalty under section 22(6) of the Rajasthan Sales Tax Act.