2012 (8) TMI 879 - HC - VAT and Sales Tax

Summary

Issues involved:
The issues involved in this case are related to the levy of penalty u/s 78(5) of the Rajasthan Sales Tax Act, 1994 based on discrepancies in the documents accompanying goods in transit and the subsequent appeals against the penalty order.

Summary:

Levy of Penalty u/s 78(5) of the Rajasthan Sales Tax Act, 1994:
The respondent-assessee purchased goods with a declaration ST 17 (D form) from M/s. Vimal Oil Industries and transported them from Kekri to Mania. Discrepancies were found in the documents during transportation, leading to the assessing officer seeking verification. Despite furnishing the required details, a penalty of Rs. 70,800 was levied. The Deputy Commissioner (Appeals) set aside the penalty, citing lack of positive findings of irregularity in transit. The Rajasthan Tax Board also upheld this decision, leading to the revision petition.

Court's Analysis and Decision:
The High Court analyzed the case and concluded that minor discrepancies in the documents did not warrant the penalty imposed. It was noted that all necessary documents were present, including the bill and goods transit receipt, with transactions duly recorded in the books of account. The respondent provided the required declaration ST 17 and the DD number on the bills indicated genuine transaction and consideration passage. The court emphasized that there was no evidence of tax evasion or lack of genuineness in the transaction. It was held that the penalty was based on suspicion and lacked a solid legal basis. The court upheld the decisions of the Deputy Commissioner (Appeals) and the Tax Board, stating that they were not flawed by any legal misdirection or factual error.

Outcome:
Consequently, the High Court dismissed the revision petition, ruling in favor of the respondent-assessee and against the imposition of the penalty u/s 78(5) of the Rajasthan Sales Tax Act, 1994.