2010 (7) TMI 935 - HC - VAT and Sales Tax

Penalty of ₹ 55,770.30 imposed for the consignment of specified bullions not carrying the proper papers in form 28B as required under rule 42(2) of the Bihar Sales Tax Rules, 1983 framed under the Bihar Finance Act, 1981 contravening section 31(2a) and (3) of the same. Held that - We have perused the notice dated 4.1.1992. We hold that the very initiation of the proceedings under section 31 of the Finance Act being not in accordance with the Rule 19 of the Sales Tax Rules without a gist of the accusation, vitiates the entire proceedings including the final order of penalty dated 7.1.1992. The impugned order dated 7.1.192 is accordingly quashed.The petitioner stands discharged of any security furnished by it in pursuance of the interim order dated 6.2.1992.The writ application stands allowed.

Summary

Issues:
Challenge to final order imposing penalty for consignment of bullions without proper papers under Bihar Sales Tax Rules, 1983.

Analysis:
The petitioner contested a penalty imposed for transporting bullions without the required papers under the Bihar Sales Tax Rules, 1983. The consignment was seized by the Government Railway police and handed over to commercial tax authorities due to alleged absence of necessary documents. The petitioner argued that the notice initiating proceedings did not comply with statutory requirements as it lacked the gist of accusations, rendering it defective. The petitioner maintained that the goods were intended for sale outside the State and therefore the absence of form 28B was irrelevant. Citing a previous judgment, the petitioner emphasized the necessity for the prescribed authority to be satisfied before ordering seizure of goods and giving a finding before levying a penalty. The petitioner also raised the issue of lack of notification for forms required for transportation under the Finance Act.

The court held that the initiation of proceedings under section 31 of the Finance Act was not in accordance with Rule 19 of the Sales Tax Rules as the notice lacked the gist of the accusation. This deficiency invalidated the entire proceedings, including the final order imposing the penalty. Consequently, the court quashed the impugned order and discharged the petitioner from any security furnished. The writ application was allowed, concluding the case in favor of the petitioner.