2013 (5) TMI 778 - HC - VAT and Sales Tax

Penalty u/s 22A(7) of the Rajasthan Sales Tax Act, 1994 - no documents were found with the driver of the vehicle in which black oil (used) was found on inspection - Held that - black oil was purchased/procured by the driver of the vehicle from various mechanic/mistris for specific purpose of use by other mechanics for repair of vehicles and it was not otherwise usable, earlier it was tax paid and there was no intention of tax evasion in so far as said oil found in the vehicle is concerned. It is a finding of fact that oil which was found in the vehicle was tax paid earlier as no oil can be sold without payment of tax and further, if the purchaser would resale, again tax would be charged by it. There is concurrent finding of fact of the two lower-authorities, that the goods were tax paid and no evasion of tax and therefore, the penalty on such tax paid goods cannot be levied. - no question of law is involved - Decided against Revenue.

Summary

Issues:
Challenge to penalty imposed under section 22A(7) of the Rajasthan Sales Tax Act, 1994.

Detailed Analysis:

Issue 1: Penalty Imposed Under Section 22A(7)
The petitioner-Department challenged the order of the Rajasthan Tax Board, Ajmer, which had deleted the penalty of Rs. 12,000 imposed under section 22A(7) of the Act. The assessing officer imposed the penalty as no documents were found with the driver of the vehicle containing black oil. The respondent-assessee claimed the oil was procured from mechanics for resale, with tax liability on the purchaser. The Deputy Commissioner (Appeals) and Tax Board both deleted the penalty, stating the oil was tax-paid earlier and intended for use by mechanics, not for resale. The High Court upheld the lower authorities' findings, emphasizing the tax-paid status of the goods and lack of tax evasion intent.

Issue 2: Legality of Penalty Imposition
The petitioner argued that the penalty was justified due to the absence of documents with the driver. However, the High Court noted that the black oil was purchased for a specific purpose and was tax-paid earlier, thus no tax evasion was involved. The court found no illegality, error, or perversity in the orders of the lower authorities, emphasizing the factual findings and absence of any legal question.

Issue 3: National Litigation Policy
The High Court highlighted the National Litigation Policy 2009, urging responsible litigation conduct by the government and its agencies. The policy aims to reduce frivolous appeals and emphasizes the need for careful scrutiny before approaching the court, especially in cases involving small amounts like Rs. 12,000. The court emphasized the importance of focusing on core issues, avoiding unnecessary litigation costs, and issuing monetary limits for filing appeals to reduce pendency and concentrate on essential matters.

Conclusion:
The High Court dismissed the sales tax revision petition and stay application, emphasizing adherence to the National Litigation Policy, efficient litigation conduct, and the need to avoid unnecessary appeals in cases with insignificant tax/penalty amounts. The court directed the Commissioner of Commercial Taxes, Rajasthan, to consider formulating monetary limits for appeals, aligning with the National Litigation Policy, to reduce pendency and concentrate on essential issues.