2013 (10) TMI 1289 - HC - VAT and Sales Tax

Levy of tax under RST Act - During interception of vehicle bills were found to be in same handwriting therefore presumed to be bogus - Held that - It is apparent that the owner or person incharge of a vehicle has to have proper documentation and which on demand will necessarily have to be produced by the owner or person incharge of the vehicle. In so far as the present facts are concerned it bears out from the record that the respondent had all the documents and the documents which were produced on the spot clearly showed that the goods were being sent from Delhi and were intended to be sent to Gujarat and therefore it is merely on assumption and presumption and only because of the bill and vouchers being in the same handwriting it was alleged that the bills are bogus. Merely because bills and vouchers are in the same handwriting and if the goods are sent by the same firm in different names to be intended for different consignees then certainly the handwriting on the bills and vouchers would be the same therefore merely because the handwriting was same in my view it cannot be a basis for imposition of levy of tax penalty and interest. It is also clear that not a single document was available so as to come to a conclusion that the goods were meant for being uploaded/sold within the State of Rajasthan rather all the documents proved otherwise. On perusal of the records it is also clear that the respondent-assessee submitted a reply on April 12 1995 and wanted time for verification of consignor and consignee but without providing adequate time the penalty was levied on April 12 1995. Even otherwise without providing adequate opportunity of hearing the tax penalty and interest was imposed and therefore it is not justified and the Tax Board has correctly come to the conclusion that the entire penalty tax and interest has been levied merely on conjectures and surmises without proving further by the petitioner-assessing officer. - All the documents proved otherwise and since Rajasthan falls in between Delhi and Gujarat which is proved by all the documents in my view the tax penalty and penalty has rightly been deleted by the DC(A) and approved by the Tax Board. There is concurrent finding of fact by both the two appellate authorities that there is no loss of revenue and documents were proper. - Decided against Revenue.

Summary

Issues:
Violation of section 22A(7) of the Act of 1954 and deletion of penalty by Tax Board.

Analysis:
The case involved two revision petitions filed by the petitioner-assessing officer challenging the common order passed by the Rajasthan Tax Board upholding the deletion of penalty by the Deputy Commissioner (Appeals). The key questions of law raised included the justification for deleting the penalty under section 22A(7) of the Act of 1954 despite a violation of section 22A(3) and the alleged discrepancies pointed out by the assessing officer. The respondent-assessee was intercepted at a check-post while transporting goods from Delhi to Gujarat, claiming that the goods were not meant for Rajasthan. The assessing officer imposed tax, penalty, and interest, which were later challenged and deleted by the Deputy Commissioner (Appeals) and the Tax Board.

The petitioner-assessing officer argued that there was a violation of provisions under section 22A(7) and the respondent failed to provide satisfactory documentation. The officer contended that the goods were actually meant for Rajasthan, and the respondent's inability to produce the consignee raised suspicions. However, the Tax Board and Deputy Commissioner (Appeals) found in favor of the respondent, noting that the documents indicated the goods were intended for Gujarat and there was no loss of revenue to Rajasthan. The respondent had requested time for verification of consignor and consignee, but the penalty was imposed prematurely without proper verification.

Upon review of the relevant sections of the Rajasthan Sales Tax Act, it was determined that the respondent had proper documentation to prove the goods were not intended for Rajasthan. The petitioner-assessing officer's claims were based on assumptions and lacked concrete evidence of revenue loss to Rajasthan. The Tax Board correctly concluded that the penalty, tax, and interest were imposed without sufficient grounds and were based on conjectures. The concurrent findings of fact by the appellate authorities supported the deletion of the penalty, as there was no loss of revenue to Rajasthan and the documents were in order.

In conclusion, the court found in favor of the respondent-assessee, dismissing both revision petitions. The decision was based on the lack of evidence supporting revenue loss to Rajasthan and the proper documentation provided by the respondent. The court upheld the orders of the Deputy Commissioner (Appeals) and the Tax Board, emphasizing that penalties should not be imposed solely on assumptions without concrete proof.