1994 (2) TMI 290 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of tax based on discrepancy in goods declaration during transportation; Rejection of applicant's explanation by Sales Tax Officer, Assistant Commissioner, and Sales Tax Tribunal; Appeal for revision challenging the order of Sales Tax Tribunal.

Analysis:
The case involved a revision filed against the Sales Tax Tribunal's order related to the assessment of tax concerning a discrepancy in the declaration of goods during transportation. The Sales Tax Officer detained goods based on a discrepancy between the declared and physically verified quantities. The applicant explained the error as a typographical mistake in the invoice, but authorities found the explanation unsatisfactory, suspecting an intention to evade tax. Consequently, the Sales Tax Officer ordered the seizure of goods and demanded a cash deposit for release.

The applicant's appeal to the Assistant Commissioner and subsequent second appeal to the Sales Tax Tribunal were both rejected. The applicant argued that the goods were intended for export, not for sale or use in the state, thus denying any tax evasion intent. However, all authorities upheld the decision based on the discrepancy. The court acknowledged the plausibility of a mistake theory but refrained from assessing the explanation's merits in the revisional jurisdiction.

The court, considering the circumstances and the evidence provided by the applicant, modified the orders of the Sales Tax Officer and Tribunal. It directed the release of goods upon the applicant's deposit of a specified amount representing tax liability and furnishing security for the remaining sum. The court emphasized that the penalty proceedings under section 15-A(i) would determine the explanation's validity, and in the interest of justice, allowed the applicant to proceed with the goods upon fulfilling the specified requirements.

In conclusion, the court modified the previous orders, allowing the release of goods upon compliance with specified conditions. The court highlighted that the penalty proceedings would further evaluate the applicant's explanation, emphasizing the importance of justice in the resolution.