2013 (3) TMI 629 - HC - VAT and Sales Tax

Whether the production of ST18-C is a matter of choice and convenience for the dealer and whether the provisions under rule 54 of the Rules of 1995 are mandatory or directory ? Whether the appellate authority and the learned Tax Board can circumvent the provisions of law by drawing their own interpretation and conclusion which in fact were never intended by the Legislature ?

Summary

Issues:
1. Appeal against the order of penalty imposed under section 78(5) of the Rajasthan Sales Tax Act, 1994.
2. Interpretation of provisions related to penalty imposition.
3. Requirement and timing of producing form No. ST-18C during checks.
4. Discretion of appellate authorities in reducing excessive penalties.
5. Compliance with principles of natural justice in penalty imposition.

Analysis:

1. The revision petition was filed against the order of penalty imposed under section 78(5) of the Rajasthan Sales Tax Act, 1994. The petitioner-Department challenged the deletion of penalty amounting to Rs. 66,215 imposed by the Assistant Commercial Taxes Officer (ACTO) by the Deputy Commissioner (Appeals) and upheld by the Tax Board, Ajmer. The petitioner argued that the penalty was rightly imposed due to the unavailability of form No. ST-18C during the initial check.

2. The main issue revolved around the interpretation of the provisions of section 78(5) of the Act regarding the authority to impose penalties. The respondent contended that penalty under law is not leviable when goods are under stock transfer, and the provisions of section 78(1) do not apply in such cases. The respondent further argued that form No. 18-C was produced immediately on demand after a short delay, and penalties should not be imposed based on technicalities.

3. The timing and requirement of producing form No. ST-18C during checks were crucial in this case. The court emphasized that the form was produced within half an hour of the initial check, and any minor errors in the form, such as typographical mistakes, should not warrant penalty imposition. The court cited previous judgments and the principle of natural justice, stating that penalties should not be levied when documents are not readily available but can be produced promptly.

4. The court addressed the discretion of appellate authorities in reducing excessive penalties. It was argued that the appellate authorities, including the Tax Board and the Deputy Commissioner (Appeals), did not commit any error or illegality in deleting the penalty amount. The court upheld their decisions based on the prompt production of form No. ST-18C and compliance with the principles of natural justice.

5. Compliance with principles of natural justice in penalty imposition was a significant aspect of the judgment. The court emphasized the importance of giving the opportunity to produce required documents and not imposing penalties based on minor technical errors. The court cited relevant case laws and consistently held that penalties should not be levied when forms are produced promptly upon demand.

In conclusion, the court dismissed the revision petition in favor of the respondent-assessee, upholding the decisions of the lower authorities regarding the deletion of the penalty imposed under section 78(5) of the Act. The court found no error in the orders passed by the Deputy Commissioner (Appeals) and the Tax Board, Ajmer, and emphasized the importance of timely document production and compliance with principles of natural justice in penalty imposition cases.