2014 (9) TMI 894 - HC - VAT and Sales Tax

Levy of differential tax and interest - Imposition of penalty - Held that - It is an admitted fact that all sales transactions for the relevant assessment year were recorded in the account books of the assessee and there was admittedly no attempt at concealment/ misinformation by the respondent assessee in the returns filed. The Appellate Authority and the Tax Board held that in the circumstances mere levy of additional tax and statutory interest on interpretation of the governing entries and consequent classification of the assessed goods against the say of the respondent assessee could not have entailed any automatic levy of penalty on the assessee. The Tax Board and the appellate authority have taken into consideration the aforesaid facts and relied upon the judgment of the Hon'ble Supreme Court in the case Shree Krishna Electricals (2009 (4) TMI 428 - SUPREME COURT OF INDIA) to set aside the levy of penalty by the Assessing Officer. - The revision petition as filed by the department does not critique the judgment of the Tax Board or even remotely suggest as to how the judgment of the Hon'ble Supreme Court in the case of Shree Krishna Electricals (2009 (4) TMI 428 - SUPREME COURT OF INDIA) relied upon by the Tax Board is not applicable in the facts of the case to the issue of levy of penalty on the assessee under Section 61 of the 1994 Act - Decided against Revenue.

Summary

Issues:
Section 84 of the Rajasthan Value Added Tax Act, 2003 - Impugning order by Rajasthan Tax Board - Dismissal of second appeal by department - Levy of differential tax and interest - Setting aside penalty - Interpretation of entries in schedule - Classification of goods - Pre-conditions for penalty levy - Bonafide dispute - Automatic penalty levy under Section 61 of the 2003 Act - Case law references - Recorded sales transactions - No concealment or misinformation - Judgment of Hon'ble Supreme Court - Critique of Tax Board's judgment - Applicability of Supreme Court judgments - Settlement of legal question - Dismissal of revision petition.

Analysis:

The judgment pertains to a Section 84 petition under the Rajasthan Value Added Tax Act, 2003, challenging the Rajasthan Tax Board's order dismissing the department's second appeal against the levy of differential tax, interest, and penalty on the respondent assessee. The Appellate Authority upheld the tax and interest but set aside the penalty. The court referred to a previous case involving a bonafide dispute over interpretation of entries and classification of goods, stating that such disputes do not automatically warrant penalty under Section 61 of the Act, citing Supreme Court judgments in similar cases.

The court noted that all sales transactions for the assessment year were properly recorded by the assessee without any attempt at concealment. The Appellate Authority and Tax Board held that the mere levy of additional tax and interest, based on interpretation of entries and goods classification, did not justify automatic penalty imposition. They relied on the Supreme Court's judgment in Shree Krishna Electricals to set aside the penalty imposed by the Assessing Officer.

The revision petition failed to challenge the Tax Board's judgment or demonstrate why the Supreme Court's decisions were not applicable in this case regarding the penalty levy under Section 61. The court found no merit in the revision petition, citing that the legal questions raised had already been settled by the Supreme Court and previous decisions of the court. Consequently, the revision petition was dismissed.