2017 (1) TMI 128 - HC - VAT and Sales Tax

Imposition of penalty u/s 76(6) of the Act - levy of VAT u/s 76(13) of the Act - declaration Form 47 - once the assessee had sold/supplied the material to JVVNL, it became the property of JVVNL, these are the properties of JVVNL after it was supplied at Jaipur, and it was the duty of the assessee to supply the material to be carried out for installation and commissioning at various sites of Jaipur Discom - Held that - the assessee could not have been found to be penalised for no purpose when the owner accepts that the goods are belonging to them, after being supplied by the petitioner and merely to facilitate transportation, the AO ought not to have interfered in transportation of such goods. In my view, the finding reached by the Tax Board is perverse and requires to be interfered - it is a fit case where the assessee being only a supplier, was not required to be either taxed or to be penalised u/s 76(13) of the Act - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Appeal against Rajasthan Tax Board order allowing respondent's appeal.
2. Alleged tax evasion during transportation of goods.
3. Dispute regarding penalty and VAT imposition.
4. Assessment of the role of the assessee in transporting goods.
5. Interpretation of tender terms and ownership of goods.

Analysis:
1. The judgment pertains to an appeal against the Rajasthan Tax Board's decision favoring the respondent. The petitioner was involved in supplying and installing a Metering System under a tender from Jaipur Vidyut Vitaran Nigam Limited. The issue arose when goods being transported were intercepted, leading to allegations of tax evasion.

2. The petitioner contended that they were merely facilitating transport on behalf of JVVNL and had no intention of tax evasion. The Deputy Commissioner (Appeals) accepted this argument and deleted the penalty. However, the Tax Board reversed this decision, upholding the penalty and VAT imposition by the Assessing Officer.

3. The crux of the matter was the ownership and purpose of the goods being transported. The petitioner argued that they were following tender terms and transporting goods as per JVVNL's instructions. Certificates from JVVNL officials supported this claim. On the other hand, the respondent emphasized the lack of proper documentation during transportation.

4. The High Court analyzed the evidence and found that once the petitioner had supplied the goods to JVVNL, they became the property of JVVNL. The court criticized the Assessing Officer's technical approach and supported the petitioner's role as a supplier facilitating transportation to various sites as per the tender requirements.

5. Ultimately, the High Court concluded that the petitioner, as a supplier, should not be penalized or taxed under the relevant provisions. The court deemed the Tax Board's decision as perverse and set it aside, ruling in favor of the petitioner. The judgment highlighted the importance of understanding contractual obligations and ownership rights in such disputes.