2014 (1) TMI 1206 - HC - VAT and Sales Tax

Penalty u/s 78(5) of Rajasthan Sales Tax Act, 1994 - Whether penalty in the facts of the present matter could not have been imposed on the owner of the goods merely for the reason that section 78(5) was amended for certain purposes on 22.03.2002 - Held that - amendment to Section 78(5) of the Act of 1994 brought about on 22.03.2002 was merely clarificatory in nature and therefore retrospective. The obtaining legal position thus is that even at the time of goods in transit and the checking thereof on 22.03.2001, the owner of the goods aside of the person in-charge of the goods was liable for penalty under Section 78(5) of the Act of 1994 in the event of any contravention of the mandate of Section 78(2) of the Act of 1994, Rule 53(1)(a) of the Rules of 1995 and notification issued therein being found. Not only the goods in transit i.e. PVC sheets were not accompanied by the requisite statutory declaration, but also in spite of show cause notice no attempt was made to file the requisite declaration by the respondent- assessee. Contrarily as earlier indicated it was conceded and admitted before the assessing authority that the respondent-assesseee was in breach of Section 78(2) of the Act of 1994, Rule 53 of the Rules of 1995 as also notification dated 30.03.2000 and was willing to pay the penalty - Following decision of Assistant Commercial Taxes Officer Vs. Bajaj Electricals Limited 2008 (11) TMI 374 - SUPREME COURT OF INDIA - Decided in favour of Revenue.

Summary

Issues:
1. Penalty imposition on owner of goods in transit.
2. Requirement of statutory declaration form ST-18A for goods in transit.

Analysis:
1. The case involved a petition against an order upholding a penalty on a respondent-assessee for breaching Section 78(2) of the Rajasthan Sales Tax Act, 1994. The assessing authority found the respondent in violation as goods in transit were not accompanied by the required statutory declaration form ST-18A. The Deputy Commissioner (Appeals) set aside the penalty, stating that prior to 22.03.2002, penalties could only be imposed on the person in charge of goods during transit. The Tax Board upheld this decision, leading to the revision petition.

2. The petitioner argued that penalties could be imposed on the owner of goods in transit even before the 2002 amendment to Section 78(5) of the Act, citing relevant Supreme Court cases. The respondent contended that the goods were not covered by the notification requiring the declaration form ST-18A, as they were PVC sheets used in the production of plastic goods. However, the court disagreed, stating that the notification did not exclude plastic goods used as raw material for production. The court applied the rule of last antecedent to interpret the notification and found no merit in the respondent's argument. The court also noted that the respondent had admitted the breach and was willing to pay the penalty, further supporting the imposition of the penalty.

3. The court ultimately quashed the orders of the Deputy Commissioner (Appeals) and Tax Board, restoring the penalty imposed by the assessing authority. The court held that penalties on owners of goods in transit could be retrospective, even before the 2002 amendment. The court found no grounds to exclude the PVC sheets from the notification's requirements and emphasized the respondent's admission of the breach. Consequently, the revision petition was allowed, and the original penalty was reinstated.