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2012 (9) TMI 630 - SC - VAT and Sales TaxChallenge the rate of penalty provided in Section 78(5) of Sales tax Act - Claim for No or Less Penalty - Held that - As decided in State of Rajasthan & Anr. Vs. D.P.Metals 2001 (10) TMI 881 - SUPREME COURT OF INDIA that once the ingredients of Section 78(5) are established, after giving a hearing and complying with the principles of natural justice, there is no discretion not to levy or levy lesser amount of penalty - This provision cannot be read as to imply that the penalty of 30% is the maximum and lesser penalty can be levied. The legislature thought it fit to specify a fixed rate of penalty and not give any discretion in lowering the rate of penalty. Thus quantum of penalty under the circumstances enumerated in Section 78(5) cannot be regarded as illegal. The legislature in its wisdom has though it appropriate to fix it at 30% of the value of goods and it had the competence to so fix - against assessee.
Issues involved:
Appeal against judgment and order passed by Rajasthan High Court in Sales Tax Revision Petition No.47/2006. Analysis: The Supreme Court heard the appellant's counsel in the appeal against the Rajasthan High Court's judgment. The issue raised was found to be covered by a previous decision of the Court in the case of State of Rajasthan & Anr. Vs. D.P.Metals, (2002)1 SCC 279. The Court emphasized that submission of false or forged documents at check-posts indicates a desire to mislead authorities, establishing mens rea. Failure to produce required documents despite opportunity granted under Section 78(5) also demonstrates guilty intent. The Court clarified that the penalty under Section 78(5) is fixed at 30% of the value of goods without discretion to levy a lesser amount. The legislation's decision to specify a fixed rate of penalty was deemed appropriate as a deterrent. The Court referred to previous judgments to support the legislative competence to levy taxes and penalties as needed. The Supreme Court, in line with the previous decision, allowed the appeal, setting aside the orders of the First Appellate Authority Board and the High Court. The Court restored the order passed by the Original Authority. No costs were awarded in this matter. The judgment was delivered accordingly.
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