1996 (3) TMI 516 - AT - VAT and Sales Tax

Summary

Issues:
1. Challenge to the validity of rule 62A, Rajasthan Sales Tax Rules, 1955
2. Imposition of penalty under section 16(1)(k), Rajasthan Sales Tax Act, 1954
3. Quashing of notice and assessment order

Analysis:

Issue 1: Challenge to the validity of rule 62A, Rajasthan Sales Tax Rules, 1955

The petitioner contended that declaration forms ST 18-A were not required for purchasing goods for use in the hotel itself and that the provisions of rule 62A(3) were not attracted. The relevant clause of the rule stated that declaration forms were to be furnished for specific purposes, which did not include use in the petitioner's hotel. The Tribunal agreed with the petitioner's argument, noting that the forms were not necessary for goods purchased for the hotel's use. The petitioner submitted these forms as a precautionary measure, not as a legal requirement.

Issue 2: Imposition of penalty under section 16(1)(k), Rajasthan Sales Tax Act, 1954

The key question was whether section 16(1)(k) could be invoked when declaration forms were not required by law. The section imposed a penalty if goods were not used for the declared purpose after making a declaration. Since the petitioner was not obligated to furnish the forms, it was held that no declaration was made under the Act. Therefore, the liability under section 16(1)(k) did not apply, and no penalty could be imposed. The Tribunal concluded that the penalty notice and order imposing a penalty of Rs. 1,09,848 under section 16(1)(k) were to be quashed.

Issue 3: Quashing of notice and assessment order

Based on the above analysis, the Tribunal partially allowed the writ petition. The notice dated October 7, 1993, and the order dated October 19, 1993, imposing a penalty under section 16(1)(k) of the Rajasthan Sales Tax Act, 1954 were quashed. The decision was in favor of the petitioner, emphasizing that the penalty was not justified due to the absence of a legal obligation to furnish declaration forms for the specific purpose in question.

This detailed analysis highlights the Tribunal's reasoning behind quashing the penalty and upholding the petitioner's argument regarding the validity of the rule and the imposition of penalties under the relevant tax legislation.