2013 (3) TMI 358 - HC - VAT and Sales Tax

Penalty u/s. 78 (5) of the Rajasthan Sales Tax Act, 1994 set aside - whether Form ST-18A was not required to accompany the goods in transit in the course of stock transfer of goods prior to March 30, 2000 - Held that - It is not in dispute that goods in transit were in the course of a branch transfer and not sale. Admittedly prior to 30-3-2000, the goods in transit were not required to be accompanied by form ST-18A. The discrepancy in the value of goods as alleged in the documents accompanying goods in transit cannot per se entail any falsehood or forgery qua the documents in issue. It could have been a case of a mere inadvertent error. In any event of the matter the discrepancy in value of goods as recorded in different documents accompanying goods in transit ought to have been addressed by the AO after giving to the person authorised or owner of the goods a reasonable opportunity of being heard and holding an enquiry as required in law. This has not been done in the present case and the penalty was visited by AO upon the assessee on the mere discrepancy of value of goods in documents accompanying the goods. Thus the Tax Board has not committed any illeglaity in setting aside penalty orders.

Summary

Issues:
Levy of penalty under Section 78 (5) of the Rajasthan Sales Tax Act, 1994 based on discrepancy in value of goods in transit documents.

Analysis:
The High Court addressed the issue of penalty levied on the assessee under Section 78 (5) of the Rajasthan Sales Tax Act, 1994 due to a discrepancy in the value of goods in transit documents. The Court noted that prior to March 30, 2000, goods in transit were not required to be accompanied by Form ST-18A. Section 78 (4) of the Act allows for penalties to be imposed in cases where goods in movement lack proper documentation or if the documents appear false or forged. The Court emphasized that a mere discrepancy in the value of goods in different accompanying documents does not necessarily imply falsehood or forgery. It could be a simple error, and the Assessing Officer should have conducted an inquiry and provided the opportunity for the authorized person to be heard before imposing a penalty.

The Court highlighted that in the present case, the Assessing Officer did not follow the required procedure of holding an inquiry and providing a chance to be heard before imposing the penalty based on the discrepancy in the value of goods. The Court found that the Tax Board did not commit any illegality in setting aside the order passed by the Assessing Officer and upheld by the Deputy Commissioner (Appeals). Additionally, the Court concluded that no legal question was raised that warranted the exercise of jurisdiction under Section 86 of the Act. Consequently, the revision petition was dismissed based on the lack of legal grounds to overturn the decision of the Tax Board.

This judgment underscores the importance of following due process and conducting proper inquiries before imposing penalties based on discrepancies in documentation, even in cases of branch transfers where goods are in transit. The Court's analysis focused on the procedural aspects and the lack of legal basis for challenging the Tax Board's decision in this particular case.