2009 (9) TMI 900 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to orders by Tax Board and Deputy Commissioner regarding penalty imposition for violation of tax rules.

Analysis:
The Commercial Taxation Department challenged orders by the Rajasthan Tax Board and Deputy Commissioner regarding the imposition of a penalty for violating tax rules. The penalty of Rs. 26,900 was imposed for the alleged violation of rule 53 of the Rajasthan Sales Tax Rules, 1995, and section 78(2) of the Rajasthan Sales Tax Act, 1994. The firm did not have the complete form ST-18A during the goods' movement, and the form was also time-barred. The Deputy Commissioner (Appeals) set aside the assessment order and penalty, stating there was no mens rea to evade tax, as required by section 78(5) of the Act. The Tax Board upheld this decision, rejecting the Department's appeal. The case was compared to a Supreme Court judgment involving similar violations.

The revising judge referred to a Supreme Court judgment in Assistant Commercial Taxes Officer v. Bajaj Electricals Ltd., highlighting the issue of evasion due to incomplete declaration forms. The judgment emphasized instances where forms were signed but essential columns were left blank, only to be filled later during scrutiny. The judge noted a clear violation of section 78(2) by the respondent in the present case, aligning it with the principles outlined in the Bajaj Electricals Ltd. case. Consequently, the revision petition was allowed, setting aside the orders by the Deputy Commissioner and Tax Board, and restoring the assessing authority's order from October 10, 1997. No costs were awarded in this matter.