2016 (11) TMI 1195 - HC - VAT and Sales Tax

Levy of penalty u/s 76(6) of the Act - declaration form VAT 47 - declaration not fully filled - punching of form - Held that - Even the subsequent declaration form, though produced by the assessee, in my view can be said to be incomplete, defective or not duly filled in, particularly taking into consideration the additional mandate of law of punching the declaration form, though the learned counsel contended that it is technical error, but in my view it cannot be said to be mere technicality particularly when it is an additional feature introduced by the Government to avoid misuse or reuse of declaration forms and to avoid manipulations by the assessees. To say that it is a technical error, in my view, is not proper. Once the apex court says that declaration form should be complete in all respect, then punching having been introduced as one of the additional feature later, is required to be taken into consideration. What is to be punched is date, month of use and value, which neither the earlier Form nor the new Form was punched and, therefore, in my view the subsequent declaration form can also be said to be incomplete or not duly filled in and is not sufficient compliance of the mandate of law. The judgment of Guljag Industries 2007 (8) TMI 344 - SUPREME Court of which relevant paras have been reproduced hereinbefore, is applicable in the facts and circumstances of the instant case and when the additional feature of punching which has been noticed hereinbefore, the declaration form can be said to be deficient in the light of the judgment rendered in the case of Guljag Industries. The declaration form has to be complete in all respect and finding the subsequent form even incomplete in respect of material particulars and punching, the order of Tax Board is reversed and that of the AO as well as Dy. Com. (Appeals), are upheld - petition succeeds - decided in favor of Revenue.

Issues Involved:
1. Validity of the penalty imposed under Section 76(6) of the VAT Act.
2. Compliance with VAT declaration form requirements.
3. Applicability of Supreme Court judgments in similar cases.

Detailed Analysis:

1. Validity of the penalty imposed under Section 76(6) of the VAT Act:
The core issue addressed in this judgment is the imposition of a penalty under Section 76(6) of the VAT Act. The Anti Evasion Wing intercepted a vehicle carrying goods with incomplete VAT declaration forms. The initial form was found to have several blank columns, and the subsequent form provided by the assessee was also deemed incomplete due to the lack of punching. The Tax Board initially deleted the penalty based on the subsequent form provided, but this decision was challenged by the Revenue.

2. Compliance with VAT declaration form requirements:
The judgment emphasizes that Section 76 of the VAT Act and Rule 53 of the VAT Rules mandate that the declaration form must be completely filled in all respects, including punching the value, date, and month. The court referenced the Supreme Court's ruling in D.P. Metals, which allows for the submission of a declaration form post-interception if it is complete and accurate. However, the court also cited Guljag Industries, which underscores the necessity of having all material particulars filled in the declaration form at the time of interception to avoid penalties.

3. Applicability of Supreme Court judgments in similar cases:
The court analyzed the applicability of the Supreme Court judgments in D.P. Metals and Guljag Industries. In D.P. Metals, the court held that a subsequent complete declaration form could suffice for compliance. However, in Guljag Industries, the Supreme Court ruled that incomplete declaration forms at the time of interception indicate an intention to evade tax, thus justifying penalties. The Rajasthan High Court applied the principles from Guljag Industries, noting that both the initial and subsequent forms were incomplete, particularly due to the lack of punching, which is a statutory requirement.

Conclusion:
The court concluded that the subsequent declaration form provided by the assessee was also incomplete due to the lack of punching, a requirement introduced to prevent misuse and manipulation of forms. The Tax Board's failure to consider this vital issue was deemed a perversity. Consequently, the court reversed the Tax Board's decision and upheld the orders of the AO and Dy. Com. (Appeals), thereby reinstating the penalty imposed under Section 76(6) of the VAT Act.

Summary:
The Rajasthan High Court upheld the penalty imposed under Section 76(6) of the VAT Act due to incomplete VAT declaration forms at the time of interception. The court emphasized the necessity of fully completed forms, including the statutory requirement of punching, referencing Supreme Court judgments in D.P. Metals and Guljag Industries. The decision of the Tax Board to delete the penalty was reversed, and the orders of the AO and Dy. Com. (Appeals) were reinstated.

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