2011 (8) TMI 1025 - HC - VAT and Sales Tax

Restoration of penalty imposed on the assessee by revisional authority - Held that - The assessee has failed to comply with the burden of reporting at the first situated check-post on entering the State. There has been a clear violation of section 53(2) of the Act. Consequently, penalty under section 53(2)(d) automatically stands attracted. In the instant case, the penalty levied is due to the violation of law and hence, the revisional authority has rightly passed the impugned order. We do not find any error in the impugned order that calls for any interference. Consequently, the questions of law raised in this appeal are answered in favour of the Revenue and against the assessee. Accordingly, the appeal being devoid of the merits, is dismissed.

Summary

Issues:
1. Imposition of penalty on the assessee for alleged tax evasion.
2. Validity of the revisional authority's decision to restore the penalty.

Analysis:
Issue 1: The case involves the imposition of a penalty on the assessee, a dealer in travelling bags and suitcases, for alleged tax evasion. The penalty was imposed after the goods vehicle carrying commodities was intercepted, and it was found that the necessary documents were not tendered at the first entry check-post, indicating an intention to avoid tax. The assessee appealed the penalty, which was initially set aside by the Joint Commissioner of Commercial Taxes but later restored by the Additional Commissioner of Commercial Taxes through a revisional order.

Issue 2: The validity of the revisional authority's decision to restore the penalty was challenged in the appeal. The appellant contended that there was no intention to evade tax and that the burden of proof regarding revenue loss lies with the State. The appellant relied on a previous judgment to argue that non-scrutiny of documents by check-post authorities absolves the assessee of fault. However, the respondent defended the penalty, stating that failure to produce documents at the check-post attracts a penalty under the relevant tax Act.

The High Court, after hearing both parties and examining the records, found that the assessee had indeed violated the provisions of the tax Act by failing to report at the first check-post upon entering the State, as required by law. The Court emphasized that it was the assessee's responsibility to comply with reporting requirements, and the penalty imposed was justified under the Act. The Court distinguished the present case from the appellant's cited judgment, as in this instance, the violation was clear, and the penalty was a result of non-compliance with the law. Therefore, the revisional authority's decision to restore the penalty was upheld, and the appeal was dismissed in favor of the Revenue.