2017 (1) TMI 1558 - HC - VAT and Sales Tax

Penalty u/s 78(5) of the Rajasthan Sales Tax Act 1994 - It was noticed that there was requirement of declaration form ST-18A and though it was produced but there were several cuttings and over-writings - Held that - admittedly the declaration form produced had cuttings and over-writings and the finding recorded by the AO as well as the DC(A) that the form was earlier used and has been produced by reusing the same which cannot be permitted. It may be that a fresh declaration form was filed but then it was rightly rejected as the fresh declaration form could not be considered if initially no declaration form was produced and on a show cause declaration form was filed then it was a different case but facts are contrary. Penalty upheld - Petition allowed - decided in favor of Revenue.

Summary

Issues:
Challenge to order passed by Rajasthan Tax Board dismissing appeal against penalty imposed under Rajasthan Sales Tax Act, 1994 based on reused declaration form with cuttings and over-writings.

Analysis:
1. The petitioner's appeal was dismissed by the Rajasthan Tax Board based on the interception of a vehicle carrying goods with a reused declaration form containing cuttings and over-writings, indicating a possible evasion of tax. The Assessing Officer imposed a penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994.

2. The matter was taken to the Dy. Commissioner (Appeals) who found the declaration form improper but held that the penalty was not leviable based on a judgment of the Larger Bench of the Tax Board in a different case. The penalty was subsequently deleted.

3. On further appeal, the Tax Board upheld the decision of the Dy. Commissioner (Appeals) based on the same judgment of the Larger Bench, leading to the dismissal of the Revenue's appeal.

4. The petitioner contended that the judgment of the Larger Bench of the Tax Board was overruled by the Apex court in a subsequent case, and therefore, the penalty should be upheld. The petitioner argued that the cuttings and over-writings on the declaration form indicated an intention to evade tax, citing relevant case law.

5. The High Court, after considering the arguments, reversed the decision of the Tax Board on two grounds. Firstly, the judgment of the Larger Bench was overruled by the Apex court, making the findings of the Tax Board and Dy. Commissioner (Appeals) contrary to the law laid down by the higher court. Secondly, the High Court emphasized that the reused declaration form with cuttings and over-writings was not permissible, as per the judgment of the Apex court in a related case, indicating an attempt to evade tax. The High Court concluded that the penalty imposed by the Assessing Officer was justified.

6. In light of the above analysis, the High Court allowed the petition, quashed the orders of the appellate authorities, and upheld the penalty imposed by the Assessing Officer.