1996 (10) TMI 437 - AT - VAT and Sales Tax

Summary

Issues Involved:
(1) Jurisdiction of CTO, Flying Squad, Alwar on May 14, 1996 to intercept and check trucks.
(2) Jurisdiction of the respondent to pass the impugned orders under section 78 of the Act.
(3) Compliance with guidelines in the circular dated October 11, 1995 by CTO, Flying Squad, Alwar.
(4) Adequacy of the enquiry conducted before passing the impugned orders.
(5) Legality of transferring the file from CTO, Flying Squad, Alwar, to the respondent on May 22, 1996 under section 41 of the Act.

Issue-wise Detailed Analysis:

Points Nos. (1) and (2):
The applicants contended that the CTO, Flying Squad, Alwar, violated section 78 of the Rajasthan Sales Tax Act, 1994, and rule 53 of the Rajasthan Sales Tax Rules, 1995, as they were not importers of goods into Rajasthan. The Tribunal examined sections 2(22), 78, and 80 of the Act, and rule 53 of the Rules, concluding that the goods in movement within Rajasthan could be inspected and checked. The Tribunal found that the documents accompanying the goods were false and forged, intended to evade tax. The penalty was imposed on the drivers after due notice and hearing. Therefore, the Tribunal decided these points against the petitioners.

Point No. 3:
The applicants argued that the CTO, Flying Squad, Alwar, did not comply with the guidelines in the circular dated October 11, 1995. The Tribunal held that no circular conflicting with the law is binding on authorities. Section 78 empowers tax authorities to inspect goods in movement within Rajasthan. The circular does not protect tax evaders. The Tribunal decided this point against the applicants.

Point No. 4:
The applicants claimed that no proper enquiry was held. The Tribunal found that reasonable opportunity was given to the drivers and Shri G.L. Sharma, who failed to provide satisfactory explanations regarding the genuineness of the documents and the consignor and consignee-firms. The Tribunal decided this point against the applicants.

Point No. 5:
The applicants contended that the file transfer from CTO, Flying Squad, Alwar, to the respondent violated section 41 of the Act. The Tribunal noted that section 41(4) allows the Commissioner to transfer files for administrative reasons without notice to the dealer. No prejudice was caused to the applicants due to the file transfer. The Tribunal decided this point against the applicants.

Conclusion:
The Tribunal found the applicants' case to be a bundle of falsehoods. The Tribunal upheld the order dated May 25, 1996, of the Assistant Commissioner, Anti-Evasion, Alwar, dismissing the applications with costs of Rs. 5,000 in each case. All applicants, including M/s. Diamond Transport Service, Delhi, were held jointly and severally liable for the penalty amounts levied in the impugned order. The applications were dismissed.