2000 (1) TMI 973 - HC - VAT and Sales Tax

Summary

Issues:
Identical question arising from common order dated July 15, 1996, passed by Rajasthan Tax Board, Ajmer, setting aside penalty under section 16(1)(i) of Rajasthan Sales Tax Act of 1954.

Analysis:
The case involved four revisions raising an identical question regarding the penalty levied under section 16(1)(i) of the Rajasthan Sales Tax Act of 1954. The issue stemmed from the department of Union of India, the Central Public Works Department, supplying material to contractors for contract execution. The department claimed these supplies were not sales, while the Revenue contended they were sales. The penalty was imposed for not including the turnover for tax purposes and not maintaining required accounts. The Deputy Commissioner (Appeals) found no concealment or mens rea, leading to the penalty being set aside. The Board affirmed this decision.

During the hearing, it was mentioned that the Supreme Court had stayed the further hearing on similar issues related to taxability of supplies by government departments. The High Court decided to keep matters pending where the taxability of such supplies was in question. The transfer petitions to the Supreme Court were dismissed based on the pendency of similar matters.

The transfer petitions highlighted questions regarding the competence of the State to levy sales tax on specific materials supplied by government departments to contractors. These questions were related to the substantive levy of tax on the transactions in question. The High Court decided to keep matters pending that raised similar questions to those pending before the Supreme Court.

The conclusion reached by the Tribunal and the appellate authority that taking a bona fide stand on a debatable issue in taxability of transactions does not amount to concealment, justifying the absence of penalty. The court agreed with the Board's decision to dismiss the revision petitions, stating no costs were to be awarded.

In summary, the High Court dismissed the revision petitions as they raised identical questions regarding penalty under the Rajasthan Sales Tax Act of 1954, finding no concealment in the assessee's stand on the taxability of transactions. The court upheld the decision to set aside the penalty and agreed with the Board's conclusion, keeping matters pending where taxability issues were under consideration by the Supreme Court.