2013 (11) TMI 1555 - HC - VAT and Sales Tax

Summary

Issues involved: Challenge to penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 for incomplete documents during transportation of notified goods.

Summary:
The revision petition contested the penalty imposed on the respondent-assessee for incomplete documents related to the transportation of notified goods under section 78(5) of the Act of 1994. The assessing officer penalized the assessee for contravening section 78(2)(a) due to missing Form ST-18C during a vehicle check. The Deputy Commissioner (Appeals) set aside the penalty, stating the owner of the goods should not be penalized. The Rajasthan Tax Board, Ajmer, upheld the penalty's setting aside based on the goods being tax-paid and not requiring Form ST-18C. The petitioner argued against this decision, citing the necessity of the declaration form for tax compliance, as per the Supreme Court's ruling in Guljag Industries v. Commercial Taxes Officer. The respondent's counsel supported the Tax Board's decision, claiming tax-paid goods do not need Form ST-18C and alleging a lack of inquiry and natural justice principles in the penalty imposition.

In the judgment, the court emphasized the mandatory requirement for goods in transit, regardless of tax payment status, to be accompanied by the necessary declaration form, such as Form ST-18C for exports. The court highlighted the provisions of section 78(2)(a) and rule 54(1)(ii) of the Rules of 1995, which specify the need for declarations for notified goods in inter-State trade. The court refuted the argument that tax-paid goods are exempt from the declaration requirement, emphasizing the legal obligation. Regarding the lack of inquiry and natural justice principles, the court stated that in cases where legal requirements are clear and undisputed, no further inquiry is necessary. Therefore, the court allowed the sales tax revision, setting aside the Rajasthan Tax Board's and Deputy Commissioner (Appeals) orders and restoring the assessing officer's penalty order.

This judgment clarifies the legal obligations regarding the declaration of goods in transit and emphasizes compliance with tax laws, even for tax-paid goods, to ensure proper taxation and management information systems.