2013 (12) TMI 1449 - HC - VAT and Sales Tax

Detention of goods - Penalty u/s 78 - Whether in the facts and circumstances of the matter, non-submission of any bill, bilty at the time of inspection by the vehicle driver (who was subsequently describes as owner of the goods in question) in relation to the goods in question did not amount to violation of the provisions of Section 78(2)(a) of the Rajasthan Sales Tax Act thereby making the assessee liable for penalty under Section 78(5) of the said Act. - held that - Supreme Court in the case of Guljag Industries (2007 (8) TMI 344 - SUPREME Court) is quite explicit wherein it was held that ait is not open to the assessees to contend that in certain cases of inter-State transactions they were not liable in any event for being taxed under the RST Act, 1994 and, therefore, penalty for contravention of Section 78(2) cannot be imposed. As stated hereinabove, declaration has to be given in Form ST 18A/18-C even in respect of goods in movement under inter-State sales. It is for contravention of Section 78(2) that penalty is attracted under Section 78(5). Whether the goods are put in movement under local sales, imports, exports or inter-State transactions, they are goods in movement, therefore, they have to be supported by the requisite declaration. Admittedly, the driver of the vehicle transporting the goods did not have any document with him. In spite of notice dated 14.06.2002, no document including Form ST 18A was sought to be filed. Consequently in my considered opinion, the assessing officer vide order dated 15.06.2002 rightly visited the respondent-assessee with penalty under Section 78(5) of the Act of 1994. The Deputy Commissioner (Appeals) II as also the learned Tax Board however interfered with the order of penalty dated 15.06.2002, passed by the assessing officer without just cause and in fact contrary to the enunciation of law by the Hon'ble Supreme Court tin the case of Guljag Industries (Supra). It is trite that the judgments of the Hon'ble Supreme court operate retrospectively unless the enunciation of law by the Hon'ble Supreme Court is specifically made applicable subsequent to the decision of the Court with reference to doctrine of prospective of overruling. - Decided in favour of Revenue.

Summary

Issues:
Violation of Section 78(2)(a) of the Rajasthan Sales Tax Act leading to penalty imposition.

Analysis:
The case involved a sales tax revision petition challenging a judgment by the Rajasthan Tax Board upholding the penalty imposed on a respondent-assessee for violating Section 78(2)(a) of the Act of 1994. The respondent-assessee was found transporting goods without the required documents, leading to penalty imposition. The assessing officer levied a penalty of Rs. 44,352 on the goods in transit, which was later reduced by the Deputy Commissioner (Appeals) II. The petitioner Department appealed to the Rajasthan Tax Board, which dismissed the appeal, leading to the current revision petition.

The main issue revolved around whether the non-submission of necessary documents at the time of inspection by the vehicle driver amounted to a violation of Section 78(2)(a) of the Act, making the assessee liable for penalty under Section 78(5). The petitioner argued that strict compliance with Section 78(2)(a) was essential, as per the Supreme Court's ruling in Guljag Industries vs. Commercial Taxes Officer. The petitioner contended that the goods being transported from one state to another necessitated adherence to the documentation requirements under the Act.

The High Court, in its analysis, referred to the Supreme Court's judgment in Guljag Industries, emphasizing the mandatory nature of accompanying goods in transit with prescribed documents, irrespective of the nature of the transaction. The Court noted that the assessing officer had rightly imposed the penalty under Section 78(5) due to the lack of required documentation, a decision supported by legal precedents. The Deputy Commissioner (Appeals) II and the Tax Board were criticized for interfering with the assessing officer's decision without proper legal justification, contrary to established legal principles.

Consequently, the High Court ruled in favor of the petitioner, quashing the orders of the Tax Board and the Deputy Commissioner (Appeals) II. The penalty imposed by the assessing officer was deemed valid and liable to be restored, emphasizing the importance of strict compliance with statutory provisions regarding the transportation of goods to avoid penalties.

In conclusion, the High Court's judgment upheld the penalty imposition on the respondent-assessee for violating Section 78(2)(a) of the Rajasthan Sales Tax Act, highlighting the significance of adhering to documentation requirements during the transportation of goods to prevent legal consequences.