1992 (6) TMI 176 - HC - VAT and Sales Tax

Summary

Issues:
1. Failure to produce prescribed delivery notes under rule 23B.
2. Discrepancy in penalty levied by different authorities.
3. Exercise of revisional power under section 22-A.

Issue 1: Failure to produce prescribed delivery notes under rule 23B
The case involved the discovery of goods in an autorickshaw without the prescribed delivery notes under rule 23B. The check post officer imposed a penalty for non-compliance, citing that the delivery notes presented did not meet the required format. The appellants explained that the goods were being transported for processing purposes, but the officer deemed the transportation as under false representation, leading to the maximum penalty of Rs. 2,340.

Issue 2: Discrepancy in penalty levied by different authorities
Upon appeal, the appellate authority accepted the appellants' explanation, acknowledging that the goods were legitimately being transported for weaving purposes. The penalty was reduced to Rs. 200 in each case, as the delivery notes, although not in the prescribed form, contained all necessary particulars. However, the Joint Commissioner, in a revisional order, reinstated the maximum penalty, arguing that the failure to produce prescribed delivery notes indicated an intention to evade taxes.

Issue 3: Exercise of revisional power under section 22-A
The appellants argued that the revisional authority's intervention was unwarranted, as the appellate authority's discretion in penalty imposition should stand. The court emphasized that the revisional power under section 22-A should be exercised only if an order is erroneous and prejudicial to revenue interests. It was noted that the revisional authority's introduction of the intention to evade taxes, not raised by the original authority, was improper. The court held that the revisional authority overstepped its bounds by revising the penalty decision, ultimately allowing the appeal and ordering the excess penalty collected to be refunded.