2002 (12) TMI 581 - HC - VAT and Sales Tax

Summary

Issues:
1. Imposition of penalty on a trader for alleged evasion of sales tax.
2. Discrepancies in the transportation and destination of goods leading to penalty imposition.
3. Appeal against penalty to Deputy Commissioner (Appeals) and subsequent decisions by Rajasthan Tax Board.
4. Justification for setting aside the penalty and the liability for sales tax payment.

Analysis:
The case involves a revision against the penalty imposed on a trader for alleged evasion of sales tax on the sale of mustard oil tanks. The Assessing Officer levied the penalty based on suspicions of dishonest intention and evasion, citing discrepancies in the transportation route and destination of the goods. The trader appealed to the Deputy Commissioner (Appeals) at Jaipur, who set aside the penalty. It was determined that the sales tax had been paid at the correct rate for the transaction, despite cuttings on the bilty indicating a different destination initially. The error in the percentage of sales tax calculation was rectified, establishing that the trader had paid the appropriate tax amount to the concerned authorities in Rajasthan.

The Deputy Commissioner (Appeals) held that the cuttings on the bilty were made in good faith, and the transaction occurred in Rajasthan, where the sales tax was duly paid. The Rajasthan Tax Board upheld this decision, leading to the dismissal of the penalty imposition. The petitioner, Department of Commercial Taxes, challenged these decisions through a revision petition, which was subsequently dismissed. The counsel for the trader provided evidence that the sales tax had been paid to the appropriate authorities in Rajasthan, absolving the trader of any evasion allegations.

The court found that the trader had fulfilled their tax obligations by paying the sales tax to the relevant authorities in Rajasthan. Even if the goods were further sold to traders in other states, the liability for sales tax payment rested with the initial seller in Rajasthan. The orders of the Deputy Commissioner (Appeals) and the Rajasthan Tax Board were deemed justified in setting aside the penalty, as there was no evidence of evasion of sales tax in the transaction. Consequently, the revision petition was dismissed, affirming the decisions of the lower authorities and concluding the legal proceedings.