2016 (7) TMI 73 - HC - VAT and Sales Tax

Deletion of penalty u/s 78 - Deviation of Vehicle with goods in transit from National Highway to any road/route leading to city/town / village or any other place within the territory of the State of Rajasthan - Held that - the goods in vehicle in issue owned by the assessee were in transit from Delhi to Mandasur in Madhya Pradesh and not intended to be clandestinely delivered in Rajasthan. The view taken by the Appellate Authority and the Tax Board is a possible view on the evidence on record and cannot be termed perverse - there is no good ground to invoke the revision jurisdiction of this Court which is confined to questions of law under Section 86 of the Act of 1994. - Decided against the revenue.

Summary

Issues:
1. Interpretation of the Rajasthan Sales Tax Act, 1994 regarding goods in transit through Rajasthan.
2. Assessment of tax, cess, and penalty under Sections 78(5) and 78(11) of the Act of 1994.
3. Validity of the order passed by the Assessing Officer and subsequent appeals.
4. Compliance with documentation requirements for goods in transit.
5. Conduct of appropriate enquiry by the Assessing Officer.
6. Evaluation of evidence regarding the destination of goods in transit.

Analysis:
1. The judgment primarily deals with the interpretation of the Rajasthan Sales Tax Act, 1994 concerning goods in transit through Rajasthan. The Assessing Officer invoked a circular requiring vehicles with goods in transit not to deviate from the National Highway, suspecting an intent to deliver goods in Rajasthan and evade tax.

2. The Assessing Officer imposed tax, cess, and penalty on the assessee under Sections 78(5) and 78(11) of the Act of 1994. However, the Appellate Authority found the order to be vitiated for perversity as it overlooked relevant evidence in defense, including registration documents and affidavits of consignee firms.

3. The order of the Assessing Officer was set aside by the Appellate Authority as it was based on unverified information and lacked a proper enquiry. Subsequently, the Revenue filed a second appeal before the Tax Board, which dismissed the appeal, leading to the revision petition.

4. The documentation accompanying the goods in transit was found to be compliant with the Act of 1994. The Appellate Authority and the Tax Board emphasized the importance of investigating the registration documents of consignor and consignee firms, which the Assessing Officer failed to do.

5. The judgment highlighted the necessity for the Assessing Officer to conduct a thorough enquiry and consider all relevant evidence before imposing tax, cess, and penalty. The failure to investigate crucial documents and rely solely on unconfirmed reports was deemed inadequate.

6. The statutory authorities concluded, based on available evidence, that the goods were genuinely in transit from Delhi to Mandasur and not intended for clandestine delivery in Rajasthan. The findings of the Appellate Authority and the Tax Board were considered reasonable and not perverse, leading to the dismissal of the revision petition.

In conclusion, the judgment emphasizes the importance of conducting proper enquiries, considering all evidence, and ensuring compliance with legal requirements when assessing tax, cess, and penalties under the Rajasthan Sales Tax Act, 1994.