2015 (9) TMI 1609 - HC - VAT and Sales Tax

Penalty u/s 78(5) of the Rajasthan Sales Tax Act 1994 - It was noticed that declaration form ST 18-A which was mandatory was not found with the vehicle nor produced - Held that - order of the Tax Board cannot be sustained because the Tax Board which is the final fact finding authority has clearly gone only on the basis that prior to 22.3.2002 the penalty could have been imposed only on the in-charge/driver of the vehicle from whom the goods were found. The Tax Board has not gone into any other issue. The matter requires to be considered afresh as the Tax Board did not decide on merits in the light of material already on record - appeal allowed by way of remand.

Summary

Issues:
Challenge against order of Rajasthan Tax Board upholding penalty under Section 78(5) of Rajasthan Sales Tax Act, 1994 on owner instead of in-charge of the vehicle; Interpretation of penalty provisions pre and post 22.3.2002; Mandatory requirement of declaration form ST 18-A; Validity of penalty imposition based on evidence.

Analysis:
The petition challenged the Rajasthan Tax Board's order upholding a penalty under Section 78(5) of the Rajasthan Sales Tax Act, 1994, imposed on the owner instead of the in-charge of the vehicle. The incident involved interception of "rough square teak wood" being unloaded, discrepancies in documentation, and imposition of a penalty on the respondent-assessee. The Dy. Commissioner(Appeals) upheld the penalty but later deleted it based on the premise that pre-22.3.2002, penalties could only be imposed on the in-charge of the vehicle. However, the petitioner contended that the penalty could have been imposed on the owner as well, citing a Supreme Court judgment. The respondent argued that ample evidence supported the penalty's deletion on merits, irrespective of the date mentioned. The High Court noted that the Tax Board's decision solely relied on the pre-22.3.2002 penalty imposition criteria, which was overturned by the Supreme Court in a relevant case, emphasizing that penalty could be imposed on the owner. The Court quoted relevant sections to support this interpretation and reversed the Tax Board's finding. It directed the Tax Board to reconsider the issue on merits based on the existing material before the Assessing Officer and the Dy. Commissioner(Appeals).

The High Court's decision highlighted the mandatory requirement of declaration form ST 18-A, which was not found with the vehicle during interception and was not produced later. The petitioner argued that the absence of this form was crucial and that other materials submitted were afterthoughts to evade tax. The Court acknowledged the discrepancies in the submission of the form and the subsequent justifications provided, indicating that the form remained incomplete despite being signed. It upheld the imposition of the penalty under Section 78(5) of the Act, emphasizing the importance of fulfilling the requirements of the form. The Court's detailed analysis of the form's necessity and the inconsistent justifications provided by the respondent reinforced the validity of the penalty imposition based on the incomplete form and related evidence.

The judgment also addressed the validity of penalty imposition based on evidence presented during assessment. The respondent's contentions regarding the responsibility of the transporter and the consignor for the form's completion were found to be inconsistent and deemed as afterthoughts. The Court emphasized that the details required in the form were never supplied, leading to the correct levy of the penalty under Section 78(5) of the Act. This scrutiny of the evidence and the respondent's varying explanations further supported the Court's decision to reverse the Tax Board's finding and direct a fresh consideration of the issue based on the existing material before the authorities.

In conclusion, the High Court allowed the appeal, quashed the impugned order, and directed the Tax Board to reconsider the issue afresh on merits after hearing both parties. The Court emphasized expeditious resolution of the matter within a specified timeframe, underscoring the importance of a comprehensive review based on the evidence presented.