2011 (12) TMI 467 - HC - VAT and Sales Tax

Summary

Issues involved: Impugning the order upholding penalty under section 76(6) of the Rajasthan Value Added Tax Act, 2003.

Judgment Summary:

The petitions challenged the order upholding penalty under section 76(6) of the Rajasthan Value Added Tax Act, 2003. The respondent's vehicle was checked during transportation of goods from Rajasthan to Madhya Pradesh. The Assistant Commercial Taxes Officer levied a penalty on the respondent for an alleged illegal inter-State sale. The Deputy Commissioner (Appeals) set aside the penalty considering the presence of all required documents and absence of intent to evade tax. The Rajasthan Tax Board also dismissed the appeal, emphasizing the proper documentation and lack of evidence of tax evasion.

The High Court analyzed the case and concluded that the penalty was unjustified. The goods in transit had all necessary documents, and any transaction irregularity should have been addressed in regular assessment proceedings. The Court highlighted that the Assistant Commercial Taxes Officer exceeded his jurisdiction by imposing the penalty based on suspicion without concrete evidence of tax evasion. The Court found no intent to evade tax and dismissed the sales tax revisions, along with the stay applications.

In conclusion, the High Court dismissed the petitions challenging the penalty under section 76(6) of the Act, emphasizing the importance of proper documentation and the need for addressing transaction irregularities through regular assessment proceedings rather than penalties based on suspicion.