2017 (1) TMI 274 - HC - VAT and Sales Tax

Imposition of penalty - notice u/s 78(5) of the Act given by Dy. Commissioner (Appeals) - it is a finding of fact recorded by the Dy. Commissioner (Appeals) as well as the Tax Board in the later order that the case was compounded by M/s D.S. Roadlines by paying the compounding fees - Held that - Review is impermissible of an own order by the authority unless apparent mistakes crept in and in my view in this case the Tax Board ignored the fact of compounding of the case by the transporter and which was considered by the DC(A), was raised before the Tax Board, but no finding has been given by the Tax Board in the earlier order, therefore, the order rectifying appears to be just and proper. In the present case, compounding has already been held in the same case by M/s D.S. Roadlines and compounding fees has also been deposited which has been accepted by the Revenue and in my view there is a concurrent finding by both the appellate authorities that there is no collusion of the respondent with M/s D.S. Roadlines, accordingly the finding is just and proper. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Rectificatory order passed by the Rajasthan Tax Board against penalty imposed under the RST Act.
2. Compounding of the case by M/s D.S. Roadlines and imposition of penalty on the driver/incharge.
3. Review of the Tax Board's order and the permissibility of rectification.
4. Alleged collusion between the driver and M/s D.S. Roadlines.
5. Dismissal of the appeals filed by the respondent assessee.

Analysis:
1. The petition was filed against a rectificatory order by the Rajasthan Tax Board, which was a continuation of an earlier order in Appeal No.3960/2005/Jaipur. The driver/incharge of a vehicle intercepted on the road was penalized under the RST Act, leading to a series of appeals and rectification proceedings.

2. The Assessing Officer imposed a penalty on the driver/incharge under the RST Act, while also issuing a notice to the transporter, M/s D.S. Roadlines. The compounding of the case by M/s D.S. Roadlines was a crucial point of contention, with the DC(A) initially accepting the appeal and deleting the penalty, which was later reversed by the Tax Board. The rectification application highlighted the compounding already done by M/s D.S. Roadlines, leading to the dismissal of the Revenue's appeal.

3. The Revenue contended that separate penalties could be imposed on different persons involved in the same incident, citing connivance between the driver and the transporter. However, the respondent's counsel argued against the penalty based on the compounding of the case by M/s D.S. Roadlines, emphasizing the lack of collusion between the driver and the transporter.

4. The court considered the arguments and upheld the Tax Board's order, stating that the compounding by M/s D.S. Roadlines and the absence of collusion with the driver justified the decision to dismiss the appeals. The review of the order was deemed permissible due to the oversight regarding the compounding of the case, leading to the rejection of the Revenue's contentions.

5. Ultimately, both appeals were dismissed, rendering another petition filed by the respondent assessee against the earlier Tax Board's order irrelevant. The judgment emphasized the importance of considering compounding in cases involving penalties under the RST Act, especially when determining collusion between parties.