1996 (6) TMI 334 - HC - VAT and Sales Tax

Summary

Issues:
1. Claim of exemption based on false documents.
2. Levying penalty under section 7-A(2) of the Act.
3. Interpretation of form E as a declaration.
4. Compliance with A.P. General Sales Tax Rules, 1957.

Detailed Analysis:

1. The petitioner, a registered dealer under the Andhra Pradesh General Sales Tax Act, claimed exemption on sales turnover based on false information regarding the purchase of groundnut cake from a non-existent company. The assessing authority rejected the exemption claim and initiated penalty proceedings under section 7-A(2) of the Act due to the wilful false claim made by the petitioner.

2. The Deputy Commissioner upheld the penalty, stating that the false claim was wilful as evidenced by the discrepancies in the purchase vouchers and actual transactions. The Sales Tax Appellate Tribunal also affirmed the penalty, emphasizing that the petitioner knowingly produced false documents to support the exemption claim, leading to the dismissal of the appeal.

3. The petitioner argued that form E return cannot be considered a declaration, citing a previous judgment. However, the High Court clarified that form E, filed along with the return A-2, is a prescribed statement under the A.P. General Sales Tax Rules, serving as a basis for any claim for refund of sales tax. The Court determined that the information provided in form E constitutes a valid declaration within the meaning of section 7-A(2).

4. Referring to the A.P. General Sales Tax Rules, the Court highlighted the requirement for dealers to submit form E showing details of purchases or sales when claiming exemption. The Court emphasized that even if form E is considered a form of return, the petitioner's submission of false vouchers in support of the refund claim warranted the penalty under section 7-A(2).

In conclusion, the High Court upheld the penalty imposed on the petitioner, affirming the Tribunal's decision but providing additional reasons for the dismissal of the appeal. The Court found no merit in the Tax Revision Case and dismissed it, emphasizing the petitioner's non-compliance with the tax regulations and the use of false documents to claim exemption.