2013 (8) TMI 860 - HC - VAT and Sales Tax

Penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 - Both the appellate authorities below held that the penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 could not be imposed on the respondent-assessee, if the declaration form ST 18-A prescribed under rule 53 of the RST Rules read with section 81 of the Act was found blank or not completely filled up, if other supporting bills, vouchers, documents found at the time of checking of the goods like sales book, transport, etc., were found in order - Held that - court, considering all the facts and circumstances and the judgments, has expressed that principles of natural justice have to be followed and accordingly this court in the previous cases and so also the judgment of this court passed in the case of Assistant Commercial Taxes Officer v. Madhusudan Soap Udyog 2013 (5) TMI 763 - RAJASTHAN HIGH COURT , has remanded the matter back to the assessing officer to provide an opportunity afresh and consequently, the respondent herein also deserves to be allowed opportunity of fresh hearing in the light of the law enunciated by the honourable apex court in the case of Guljag Industries 2007 (8) TMI 344 - SUPREME Court . Orders impugned passed by the authorities below namely, the Tax Board, Deputy Commissioner (Appeal) as well as the assessing authority are quashed and the matter is restored back to the assessing authority for deciding the penalty proceedings afresh and de novo in the light of the law enunciated by the honourable apex court in the case of Guljag Industries 2007 (8) TMI 344 - SUPREME Court and after examining the material particulars filled in the declaration form 18A/18C and afford adequate opportunity of being heard to the dealer/assessee. - Decided in favour of Revenue.

Summary

Issues:
1. Interpretation of penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 regarding incomplete declaration form ST 18-A.
2. Application of principles of natural justice in penalty proceedings.
3. Remand of the matter for fresh hearing based on legal precedents.

Analysis:

Issue 1: Interpretation of penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 regarding incomplete declaration form ST 18-A:
The High Court analyzed the case in light of the Supreme Court's judgment in the case of Guljag Industries, emphasizing the mandatory nature of section 78(2) to support goods in movement with the requisite declaration form. It was noted that an incomplete form ST-18A/18C accompanying goods renders the declaration meaningless, making it impossible for the assessing officer to determine the taxable goods. The court held that mens rea is not necessary for contravention of section 78(2), and a breach of this section would attract a penalty under section 78(5) if goods in movement travel with an incomplete form. The court directed the Department to dispose of cases in accordance with the law laid down in the Guljag Industries case.

Issue 2: Application of principles of natural justice in penalty proceedings:
The court, considering the principles of natural justice, referred to previous judgments where matters were remanded back to the assessing officer to provide an opportunity for a fresh hearing. Citing cases like Commercial Taxes Officer v. Jain Tubes, ACTO v. Hariom Company, and Assistant Commercial Taxes Officer v. Madhusudan Soap Udyog, the court emphasized the need for affording the dealer/assessee a fresh opportunity of hearing in light of legal precedents like the Guljag Industries case. The court stressed the importance of following natural justice principles in penalty proceedings.

Issue 3: Remand of the matter for fresh hearing based on legal precedents:
In light of the above analysis and legal precedents, the revision petition was partly allowed. The orders of the authorities below were quashed, and the matter was restored back to the assessing authority for deciding the penalty proceedings afresh and de novo. The assessing authority was directed to examine the material particulars filled in the declaration form 18A/18C and provide an adequate opportunity for the dealer/assessee to be heard. A specific show-cause notice with details of defects and deficiencies in compliance of section 78(2) of the Act was deemed necessary. The assessing authority was instructed to pass fresh orders within six months from the date of the judgment, ensuring expeditious compliance.

Overall, the High Court's judgment focused on the interpretation of penalty provisions under the Rajasthan Sales Tax Act, the application of natural justice principles, and the remand of the matter for a fresh hearing based on established legal precedents, particularly the Guljag Industries case.