2007 (10) TMI 558 - HC - VAT and Sales Tax

Summary

Issues involved:
The issues involved in this case are the imposition of penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 on the assessee for alleged tax evasion in the sale of non-ferrous metal scrap to a buyer in Delhi.

Imposition of Penalty by Assessing Authority:
The assessing authority imposed a penalty of Rs. 53,445 on the assessee after intercepting the goods and sale bills during a check on April 16, 2004. The suspicion arose due to the discrepancy between the Rajasthan sales tax/Central sales tax paid indicated on the bills and the consignee being located in Delhi. The penalty was based on the absence of a transporter's bilty and the perceived evasion of tax by the assessee.

Appeals and Orders:
The Deputy Commissioner (Appeals) set aside the penalty on the appeal of the assessee, but the Revenue filed a second appeal before the Tax Board. The Tax Board allowed the Revenue's appeal on April 3, 2006, upholding the penalty order under section 78(5) of the Act.

Contentions of Assessee and Revenue:
The assessee explained that the mention of "paid" on the invoices was an inadvertent mistake, and the sales were actually in the course of inter-State trade with CST liability. The assessee had been assessed under the CST Act, and the absence of a bilty was due to transportation via a private truck. The assessee relied on the decision in A. C.T.O. v. Yaswant & Company to argue against the penalty. On the other hand, the Revenue claimed an admission of guilt by the assessee, which was refuted based on the reply filed during the enquiry.

Court's Decision:
After considering the submissions, the court found that the Tax Board erred in upholding the penalty. The court noted that the transaction was recorded in the books of account, and the assessee had paid the due CST to the Revenue as assessed. Since there was no admission of guilt and the tax liability was declared and accepted, the court held that no penalty under section 78(5) could be imposed. Consequently, the revision petition was allowed, and the impugned order of the Tax Board was set aside. No costs were awarded in this matter.