2010 (10) TMI 955 - HC - VAT and Sales Tax

Penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 - Held that - As the learned counsel for the Revenue does not dispute this factual aspect that declaration form ST-18C was produced by the assessee before the assessing authority along with the reply to show-cause notice. In these circumstances, the assessing officer was not right in levying penalty under section 78(5) of the Act.

Summary

Issues:
1. Penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 for not accompanying declaration form ST-18C with goods in a vehicle.
2. Interpretation of the term "owner of the goods" in section 78(5) before and after the amendment made on March 22, 2002.
3. Application of the principle of natural justice in cases of missing documents during inspection.

Analysis:
1. The case involved the imposition of a penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 for not having the declaration form ST-18C with the goods in a vehicle during inspection. The assessing officer levied a penalty of Rs. 23,400 based on the absence of the form at the time of checking. The dealer contended that the goods were meant for jobwork and were being sent back, hence the form was not initially present but was later submitted along with a reply to the show-cause notice.

2. The Deputy Commissioner (Appeals) set aside the penalty citing that the form was eventually produced before the assessing officer, and the Rajasthan Tax Board dismissed the Revenue's appeal, stating that the penalty could not be imposed as the vehicle was checked before the amendment on March 22, 2002, which included the term "owner of the goods" in section 78(5). The court referred to a previous apex court judgment that clarified the term "person in charge of the goods" to include the owner, making the amendment clarificatory rather than substantive.

3. The court highlighted the importance of the principle of natural justice in cases where documents are not readily available during inspection. It was noted that despite the opportunity given to produce the required document, the penalty could still be justified if the document was not produced. In this case, the assessing officer acknowledged that the declaration form ST-18C was eventually submitted with the reply to the show-cause notice, leading to the conclusion that the penalty under section 78(5) was not justified.

Conclusion:
The court found that while the Tax Board's decision was contrary to the apex court's interpretation of the term "owner of the goods," the assessing officer's penalty was also not in line with the principles established by the apex court regarding missing documents during inspection. Consequently, the court set aside the Tax Board's order and upheld the Deputy Commissioner (Appeals) decision, dismissing the Revenue's revision petition. The parties were directed to bear their own costs.