2024 (5) TMI 929 - HC - VAT and Sales Tax

Sales tax revision u/s 86 of the Rajasthan Sales Tax Act, 1994 - evasion of tax or not - no inquiry was conducted specially on the defence of the petitioner and order of penalty was passed - opportunity of hearing not provided - violation of principles of natural justice - HELD THAT - The authorities did not conduct inquiry regarding assertion of the petitioner that he had shown the papers at the check-post, however, a stamp was not put on that due to rush and a stress in the mind of driver to reach destination before start of strike of the transporters on the very next date. The authority assumed that some blank forms of the bilty etc. might have been retained to avoid the consequence of check by the authority and to produce it when required. Without inquiry on this point the authority wrongly assumed that blank forms deliberately kept were used. Further, the initial order imposing penalty of 50% was passed in hurry without inquiry or reasonable opportunity of hearing to the petitioner. No inquiry report was brought on the record. The Tax Board has ignored the aforesaid statutory lapses which was taken note by the appellate authority. Hence, order of the Tax Board is fit to be set aside on this ground alone. The Tax Board was expected to meet with the reasons of the appellate authority while recording contrary finding - Moreover, when the owner of the goods was exonerated as he was in possession of the documents showing a case of no tax evasion, in the circumstance, holding a driver responsible for only not showing the documents which was in possession of the driver would not be sustainable. The impugned order passed by the Tax Board is set aside and the order of the appellate authority is affirmed - the revision petition is allowed.

Summary

Issues involved: Sales tax revision u/s 86 of Rajasthan Sales Tax Act, 1994 against order dated 20.12.2006 by Rajasthan Tax Board in Appeal No. 1584/2004.

Summary:

1. Background of the Case: The petitioner, a truck driver, was carrying Jeera for a trader when intercepted by Sales Tax Department for not showing documents at a check-post. Despite producing relevant documents, he was fined 50% of goods' cost for non-compliance with Section 78 of Sales Tax Act.

2. Appellate Proceedings: The appellate authority reduced the penalty to 5%, citing no tax evasion intent. However, the Tax Board reinstated the 50% penalty. The owner of the goods was separately fined for tax evasion, but the High Court later exonerated them.

3. Legal Provisions: Section 78 of Rajasthan Sales Tax Act, 1994 mandates drivers to carry and produce documents at check-posts. Failure to comply can result in penalties as per Sub Sections 10(A) and 5.

4. Petitioner's Contentions: Petitioner argued lack of inquiry and violation of natural justice principles in imposing the penalty hastily. Cited a previous judgment for support.

5. Court's Decision: The Court found authorities failed to conduct a proper inquiry and ignored statutory lapses. Upheld the appellate authority's decision to reduce the penalty to 5% and set aside the Tax Board's order.

6. Conclusion: The Court allowed the revision petition, emphasizing the importance of fair inquiry and adherence to legal procedures in imposing penalties under the Sales Tax Act.