2014 (7) TMI 1096 - HC - VAT and Sales Tax

Levy of purchase tax under Section 11 of the Rajasthan Sales Tax Act - Assessing Authority found that the assessee by not declaring the packing material purchased under declaration form ST-17, has misused the declaration form - levy of interest under Section 58 of the Act, and penalty under Section 65 of the Act - Held that - The position being taken by Mr. Mahla is clearly contrary to Explanation-I to Section 4(2) of the Act as well as to the notification dated 6.3.1978 issued by the State Government. According to the said notification, tax payable under Sub-section (1) and Clause (b) of Sub-section (2) of Section 8, packing material sold alongwith the goods when not separately charged in the course of inter State sale, the tax on the same would be liable to be calculated at the same rate as is applicable to sale in the course of inter State sale of goods packed therein. Since salt is not subjected to any sales tax, the packing material in which salt is being packed is not equally subjected to levy of tax in view of Explanation-I to Section 30(8) read with Section 4(2) of the Act. - once an assessment has been made under Section 29 of the Act, merely by change of mind the Assessing Authority could not re-assess under Section 30. But even then the logic given by the Dy. Commissioner (Appeals) would hold water. Thus, this court does not find that any question of law arises in this petition. - Decided against Revenue.

Summary

Issues:
Challenge to judgment of Rajasthan Tax Board dismissing appeal on sales tax assessment for purchase of packing material without payment of tax.

Analysis:
The petitioner, a registered dealer in salt trade, challenged the Rajasthan Tax Board's judgment dismissing the appeal against the order confirming the assessment by the Deputy Commissioner (Appeals). The issue arose from the petitioner's purchase of packing material without payment of tax, leading to a subsequent levy of purchase tax, interest, and penalty. The Assessing Authority found the petitioner had misused the declaration form ST-17 by not declaring the packing material purchased, resulting in the tax assessment. The Deputy Commissioner (Appeals) initially allowed the appeal, but the Board later dismissed it, prompting the petitioner to approach the High Court.

The Assistant Commissioner (ACTO) argued that the petitioner should have declared the intention to pay tax while purchasing the plastic bags, as per Explanation-I to Section 4(2) of the Act and a relevant notification by the State Government. However, the court found that the tax on packing material sold with goods not separately charged in inter-State sales should be calculated at the same rate as applicable to the goods packed therein. Since salt was not taxed, the packing material was not liable for tax under the Act's provisions.

The court noted the Board's dismissal of the appeal based on the principle that once an assessment was made under Section 29, the Assessing Authority could not reassess under Section 30. Despite this, the court found the logic presented by the Deputy Commissioner (Appeals) to be valid. Consequently, the court held that no legal question arose in the petition, leading to the dismissal of the petition for lack of merit. The stay application was also dismissed accordingly.