2014 (4) TMI 451 - HC - VAT and Sales Tax

Leviability of penalty u/s 78(5)of Rajasthan Sales Tax Act, 1994 - Held that - Relying upon State of Rajasthan & Anr. vs. D.P. Metals, 2001 (10) TMI 881 - SUPREME COURT OF INDIA the penalty u/s 78(5) is levied under two circumstances - if there is non-compliance with Section 78(2)(a) i.e. not carrying the documents mentioned in that clause or - if false or forged documents or declaration is submitted - documents submitted have not been found to be false or forged one - thus the penalty u/s 78(5) of the said could not be levied Decided against revenue.

Summary

Issues:
Sales tax revision petition under Section 86 of the Rajasthan Sales Tax Act, 1994 against the order of the Rajasthan Tax Board. Non-compliance with Section 78(2) of the said Act read with Rule 53 of RST Rules. Levying penalty under Section 78(5) of the said Act. Appeal before the Dy. Commissioner (Appeals) and the Rajasthan Tax Board.

Analysis:

1. The petitioner-department filed a sales tax revision petition against the order of the Rajasthan Tax Board dismissing their appeal against the penalty levied under Section 78(5) of the Rajasthan Sales Tax Act, 1994. The issue arose from the non-compliance with Section 78(2) of the Act, specifically the absence of declaration form ST 18 A during a vehicle check.

2. The assessing authority had levied a penalty under Section 78(5) for non-compliance with the statutory provisions. The petitioner argued that the absence of the filled-in declaration form justified the penalty. However, the court noted that all necessary documents were produced during the check, including the declaration form ST 18 A, which was also submitted with the reply. The court relied on a Supreme Court case precedent to establish that penalties under Section 78(5) are applicable only in cases of non-compliance or submission of false documents.

3. The court found no merit in the petitioner's argument as the submitted documents were not proven to be false or forged. Since the documents were produced and not found to be fraudulent, the penalty under Section 78(5) could not be imposed. The court upheld the findings of the appellate authority and the Rajasthan Tax Board, dismissing the petition due to its lack of merit based on the legal position established.

4. The judgment emphasized the importance of compliance with statutory provisions and the necessity to prove non-compliance or submission of false documents to levy penalties under the Rajasthan Sales Tax Act, 1994. The court's decision was based on legal precedents and the specific circumstances of the case, highlighting the need for proper documentation and adherence to the law to avoid penalties.