2017 (1) TMI 1554 - HC - VAT and Sales Tax

Deletion of penalty u/s 61 of the Rajasthan Value Added Tax Act, 2003 - Held that - Admittedly the books of account were maintained properly and all the transactions are duly recorded in the books of account and the AO except levy of tax, has not found anything adverse - reliance placed in the case of Sree Krishna Electricals v. State of Tamil Nadu 2009 (4) TMI 428 - SUPREME COURT OF INDIA , where it was held that Where certain items which are not included in the turnover are disclosed in the dealer s own account books and the assessing authorities includes these items in the dealers turnover disallowing the exemption penalty cannot be imposed. The AO failed to justify levy of penalty, which has rightly been deleted by the appellate authorities and no question of law does arise out of the impugned order - petition dismissed.

Summary

Issues:
Challenging deletion of penalty under section 61 of the Rajasthan Value Added Tax Act, 2003 for assessment years 2006-07 to 2009-2010.

Analysis:
The case involved a dispute regarding the deletion of penalty under section 61 of the Rajasthan Value Added Tax Act, 2003. The respondent assessee had leased various items to lessees without paying tax, claiming that lease rental is not taxable. However, the Assessing Officer later imposed tax and penalty. The Deputy Commissioner (Appeals) upheld the tax but deleted the penalty, stating it was a matter of classification. The Revenue appealed only against the penalty deletion. The Tax Board affirmed the deletion, considering various factors. The petitioner argued that tax evasion had occurred, and penalty was justified. However, the respondent contended that penalty was not applicable as it was a matter of classification, citing relevant case law.

The judge considered both parties' arguments and upheld the decisions of the Tax Board and Deputy Commissioner (Appeals). It was noted that the assessee had maintained proper accounts, and the authorities found no other discrepancies except for the tax levy. Referring to the Supreme Court's judgment in a similar case, the judge emphasized that if items not included in turnover are disclosed in the dealer's accounts, and assessing authorities include them in turnover, penalty cannot be imposed. The judge also cited previous cases where penalties under section 61 were deemed inapplicable in similar situations. Consequently, the judge found no justification for the penalty imposed by the Assessing Officer and upheld the decisions of the appellate authorities, dismissing the petitions for lacking merit.