2014 (7) TMI 658 - HC - VAT and Sales Tax

Penalty imposed under section 78(5) - Whether, in the facts and circumstances of the case, the submission of ST-18A declaration form filled in, in the ink, at the time of checking is mandatory under rule 53 of the Rajasthan Sales Tax Rules, read with section 78(2) of the RST Act, 1994 and whether incomplete submission of ST-18A declaration form attracts penalty on the price of the goods under section 78(4) of the RST Act, 1994 - Held that - the law with regard to section 78(5) of the Act cannot be clearly spelt out during the period in which these appellate authorities passed their orders in favour of the assessee while these issues have been decided by the honourable apex court in favour of the Revenue now. However the fact remains that the principles of natural justice are yet to be complied with, may be, notices were sent but now needs reconsideration in the light of the apex court s judgment. On the other hand, the honourable apex court has left it open for the assessing authority to meet such compliance with the principles of natural justice. Therefore, this court is of the opinion that the assessee deserves to be granted fresh opportunity of hearing and specific show-cause notice with the nature of defect(s) and deficiencies in compliance with the provisions of section 78(2) of the Act - Following decision of Guljag Industries 2007 (8) TMI 344 - SUPREME Court - Decided in favour of Revenue.

Summary

Issues:
1. Penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 for incomplete submission of ST-18A declaration form.
2. Whether incomplete submission of ST-18A declaration form attracts penalty on the price of the goods under section 78(4) of the RST Act, 1994?

Issue 1: Penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 for incomplete submission of ST-18A declaration form:

The revision petition was filed against the order of the Rajasthan Tax Board upholding the deletion of penalty imposed under section 78(5) of the Act. The case involved a vehicle checked by the Flying Squad, Kota, carrying goods with an incomplete ST-18A declaration form. The petitioner argued that incomplete forms could be reused to avoid tax liability, citing a notification requiring complete filling of the form. The respondent contended that the missing details were immaterial clerical errors, as all necessary bills and vouchers were present. The Deputy Commissioner (Appeals) and the Tax Board both found in favor of the respondent, leading to the revision petition.

Issue 2: Whether incomplete submission of ST-18A declaration form attracts penalty on the price of the goods under section 78(4) of the RST Act, 1994:

The respondent argued that the penalty was unjust as the missing columns were inconsequential and the goods were purchased legitimately. The respondent highlighted that the missing details did not affect essential information like quality, weight, value, and invoice number, which were all correctly filled. It was emphasized that the form was not reusable if key transaction details were provided. The respondent also referred to previous court judgments supporting the deletion of the penalty based on factual findings and compliance with legal requirements.

The court considered submissions from both parties and reviewed relevant judgments, including the apex court's decision in Guljag Industries. The court acknowledged the evolving interpretation of section 78(5) and the need for compliance with natural justice principles. Consequently, the court granted the respondent a fresh opportunity for a hearing, emphasizing the importance of specific show-cause notices detailing any defects in compliance with the Act. The court set aside previous orders and remanded the matter to the assessing authority for a fresh decision on the penalty proceedings, with a directive to ensure compliance with natural justice principles and to conclude the process within six months.

In conclusion, the court partially allowed the revision petition, setting aside previous orders and remanding the matter for a fresh decision. The court emphasized the importance of granting the respondent a fair opportunity for a hearing and instructed the assessing authority to consider all contentions and ensure compliance with natural justice principles within a specified timeframe.