2014 (1) TMI 1615 - HC - VAT and Sales Tax

Penalty under section 78(5) of the Rajasthan Sales Tax Act - Form 18A declaration was accompanying the goods in transit even though blank and there was thus no intention to avoid/evade the tax - Held that - From the facts on record it is apparent that the goods in transit albeit accompanied, inter alia, by a declaration form ST 18A was not compliance in law as the declaration form ST 18A was absolutely blank. The issues of goods in transit with blank/incomplete declaration form ST 18A/18C has been considered by the honourable Supreme Court in the case of Guljag Industries v. Commercial Taxes Officer 2007 (8) TMI 344 - SUPREME Court wherein it has been held that incomplete forms do not entail compliance with the mandate of section 78(2) of the RST Act and would validly entail a penalty under section 78(5) of the RST Act. The issue in the present petition being covered by the judgment of the honourable Supreme in the case of Guljag Industries v. Commercial Taxes Officer 2007 (8) TMI 344 - SUPREME Court , this petition is without any force - Decided against assessee.

Summary

Issues:
1. Levy of penalty under section 78(5) of the Rajasthan Sales Tax Act for incomplete declaration form ST 18A accompanying goods in transit.

Analysis:
The judgment pertains to a case where a vehicle carrying goods in transit was checked, and it was found that the declaration form ST 18A accompanying the goods was blank. The assessing authority proposed to levy a penalty under section 78(5) of the Rajasthan Sales Tax Act. The petitioner argued that the consignor and consignee were the same entity, and the goods were a stock transfer, not a sale, hence there was no intention to evade tax. Despite this, the assessing authority levied the penalty, which was upheld in subsequent appeals. The High Court noted that the incomplete declaration form ST 18A did not comply with the law, citing a Supreme Court judgment in the case of Guljag Industries v. Commercial Taxes Officer. The Supreme Court held that incomplete forms do not meet the requirements of the law and can validly attract a penalty under section 78(5) of the RST Act. As the issue in the present case was covered by the Supreme Court judgment, the High Court dismissed the petition, stating it lacked merit.

This judgment highlights the importance of complying with statutory requirements, such as completing declaration forms accompanying goods in transit. It underscores that even if the consignor and consignee are the same entity and the transaction is a stock transfer, failing to fulfill legal obligations can lead to penalties under the relevant tax laws. The reference to the Supreme Court decision in Guljag Industries v. Commercial Taxes Officer establishes a precedent that incomplete forms do not satisfy legal mandates, emphasizing the need for strict adherence to statutory provisions to avoid penalties and legal consequences. The judgment serves as a reminder to taxpayers and businesses to ensure full compliance with documentation and procedural requirements to prevent potential liabilities and disputes with tax authorities.