2016 (8) TMI 1136 - HC - VAT and Sales Tax

Imposition of penalty u/s 10A of the CST Act - jurisdiction - Shuttering Wood - C Form - the Shuttering Wood was intended for resale in the State of Rajasthan but since it was not sold, penalty was imposed - whether imposition of penalty justified? - Held that - The Section 10A envisages that the Authority Competent to impose penalty u/s 10A is the one who is authorised to grant him certificate of registration under this Act, which normally means that the same Officer ought to have imposed the penalty or initiated the proceedings u/s 10A of the Act. Admittedly, both the Appellate Authorities have come to a finding of fact that in the instant case Commercial Taxes Officer, Circle-A, Kota, granted registration certificate to the assessee whereas penalty has been imposed by the Assistant Commissioner, Commercial Taxes, Works Contract and Leasing Tax, Kota. Therefore, while the registration was granted by a different officer, the penalty has been imposed by another officer, which in my view, taking into consideration the plain and simple language of Section 10A quoted hereinbefore, is unjustified. In view of the plain and simple language of Section 10A and the above finding, in my view no substantial question of law can be said to emerge out of the order impugned so as to call for interference of this Court. When the petition deserves to be dismissed on the basis of jurisdiction, the other argument raised by the counsel of misuse of C Form, is left open for consideration in an appropriate case.

Summary

Issues:
1. Imposition of penalty under Section 10A of the CST Act.
2. Competency of the officer to levy penalty.
3. Jurisdiction of the officer imposing the penalty.
4. Interpretation of Section 10A of the CST Act.

Analysis:

1. The case involved the imposition of a penalty under Section 10A of the Central Sales Tax Act, 1956. The Assessing Officer found that the assessee had purchased goods on 'C' Form from out of State of Shuttering Wood for resale in Rajasthan but had not sold them. Consequently, a penalty of ?1,09,300 was imposed.

2. The Deputy Commissioner (Appeals) deleted the penalty, and the appeal before the Tax Board also resulted in dismissal of the penalty. The Revenue contended that the penalty was rightly imposed, and technicalities were considered by the Appellate Authorities in a cursory manner. The Revenue argued that the penalty should have been imposed by the Officer registering the assessee.

3. The High Court analyzed Section 10A of the CST Act, which specifies that the authority competent to impose a penalty is the one authorized to grant a registration certificate. The Court noted that in this case, while the registration was granted by one officer, the penalty was imposed by another officer, which was deemed unjustified based on the clear language of the section.

4. Referring to a previous case, the Court highlighted a similar scenario where the same officer who granted registration also imposed the penalty. In the present case, as the registration and penalty were handled by different officers, the Court found no substantial question of law for interference. The Court dismissed the petition, emphasizing the importance of jurisdiction in such matters and leaving the argument of misuse of 'C' Form open for future consideration.

In conclusion, the High Court upheld the decision to dismiss the penalty based on the lack of jurisdiction of the officer imposing the penalty under Section 10A of the CST Act. The judgment emphasized the importance of adherence to the specific provisions of the law and the authority responsible for imposing penalties in such cases.