2011 (8) TMI 1031 - HC - VAT and Sales Tax

Rate of tax - 3% or 4% - Refund of 1% tax on presentation of Form ST-17 - Revenue forfeited 1% amount of tax collected - Held that - It is an admitted fact that under section 16(1)(j) of the Rajasthan Sales Tax Act 1954 there is no provision for forfeiting the amount of excess tax deposited by a registered dealer. It only provides for levying penalty upon those registered dealers who realize the excess tax. The assessing authority in this case did not think it proper to levy any penalty on the contrary he forfeited the amount of excess tax refunded by the non-petitioner assessee under section 16(1)(j) of the Rajasthan Sales Tax Act which cannot be said to be an order passed in accordance with the spirit of the provisions of the Act. The provisions contained in section 16(1)(j) of the Rajasthan Sales Tax Act are required to be read along with the provisions contained in section 23B of the Rajasthan Sales Tax Act and these provisions do not provide any force to the arguments advanced by the learned counsel for the petitioner. Decided against Revenue.

Summary

Issues:
1. Appeal against the judgment of Rajasthan Tax Board dismissing the appeal of the Revenue.
2. Refund of excess tax deposited by the assessee.
3. Interpretation of section 16(1)(j) of the Rajasthan Sales Tax Act.
4. Comparison with the judgment in Maharashtra Distilleries Ltd. v. Municipal Corporation of Aurangabad.

Analysis:
1. The case involved a revision petition by the Revenue against the Rajasthan Tax Board's decision to dismiss their appeal. The appeal was related to the order passed by the Deputy Commissioner (Appeals) in favor of the non-petitioner assessee, setting aside the assessing authority's order from July 11, 1994.

2. The main contention was regarding the refund of excess tax deposited by the assessee. The Deputy Commissioner (Appeals) had directed the refund, which the Revenue challenged. The assessing authority had forfeited the amount of excess tax deposited by the assessee under section 16(1)(j) of the Rajasthan Sales Tax Act.

3. The court analyzed the provisions of section 16(1)(j) of the Rajasthan Sales Tax Act, noting that it does not allow for the forfeiture of excess tax deposited by a registered dealer. The section only provides for levying penalties on dealers realizing excess tax. The court found that the assessing authority's action did not align with the Act's provisions and lacked the authority to forfeit the excess tax amount.

4. The judgment in Maharashtra Distilleries Ltd. v. Municipal Corporation of Aurangabad was cited by the non-petitioner's counsel to support their argument. The court considered this judgment and concluded that the decisions of the Deputy Commissioner (Appeals) and the Rajasthan Tax Board were not illegal or irregular in exercising their jurisdiction.

In conclusion, the court dismissed the revision petition, upholding the decisions of the lower authorities. The court found that the assessing authority's order to forfeit the excess tax deposited by the assessee was not in accordance with the law, and the provisions of the Rajasthan Sales Tax Act did not support the Revenue's arguments.