2014 (3) TMI 194 - HC - VAT and Sales Tax

Liability to additional tax, penalty and interest - Notification dated 27.8.1992 - Notification dated 30.3.2000 - Exemption under Section 15 of the Act of 1994 - Non furnish of Form C - Held that - A bare look at the notification dated 27.8.1992 would reveal that the notification provided for rate of tax of 4% in case Hydraulic Excavators were sold in the course of inter-State trade or commerce without furnishing C-Form - notification dated 30.3.2000 issued under Section 15 of the Rajasthan Sales Tax Act, 1994, which is general in nature, provides for exemption from tax the sale of goods specified in column 2 of the list to the extent to which the rate of tax exceeds the extent of rate as specified in column 3 and column 3 in the present case provides for extent of rate at 2%. While notification dated 27.8.1992 was specific and provided for levy of 4% tax on account of failure by the assessee in furnishing C-Form , the notification dated 30.3.2000 did not provide for any condition regarding furnishing of C-Form in case of inter-State sale for the purpose of availing benefit under the said notification - Therefore, the fact that inter-State transaction took place and the assessee had not furnished C-Form regarding the said transaction is of no consequence. The notification dated 27.8.1992 had no application to the case and once by notification dated 30.3.2000 the rate of tax was prescribed as 2% on account of exemption under Section 15 of the Act of 1994, it cannot be said that the respondent was liable for payment of additional tax, penalty and interest - Decided against Revenue.

Summary

Issues:
1. Interpretation of conflicting notifications regarding tax rates for inter-State sales.
2. Applicability of specific vs. general notifications in tax assessment.
3. Consideration of conditions for tax exemptions under relevant statutes.
4. Assessment of liability for additional tax, penalty, and interest in tax evasion cases.

Issue 1: Interpretation of conflicting notifications regarding tax rates for inter-State sales:
The case involved a dispute over the tax rate applicable to inter-State sales of Hydraulic Excavators by the assessee. The Assessing Officer found discrepancies in the tax payment, leading to the imposition of penalties and interest. The Tax Board, in its judgment, set aside the additional tax, penalty, and interest imposed. The key contention was whether the assessee should be taxed at 4% as per a specific 1992 notification or at 2% as per a general 2000 notification.

Issue 2: Applicability of specific vs. general notifications in tax assessment:
The Court analyzed the two notifications in question, one specific to Hydraulic Excavators and the other a general exemption notification. The specific 1992 notification mandated a 4% tax rate for inter-State sales without a 'C-Form.' In contrast, the general 2000 notification exempted sales exceeding a specified tax rate, setting the rate at 2% for Hydraulic Excavators. The Court highlighted that the general notification did not require the submission of a 'C-Form' for availing the tax exemption.

Issue 3: Consideration of conditions for tax exemptions under relevant statutes:
The Court emphasized that under Section 15 of the Act of 1994, the State Government had the authority to fully or partially exempt goods from tax without specific conditions. As the 2000 notification did not impose any conditions, the assessee was entitled to the 2% tax rate without needing a 'C-Form.' The Court clarified that once the lower tax rate was specified, the requirement for a 'C-Form' under the 1992 notification became irrelevant.

Issue 4: Assessment of liability for additional tax, penalty, and interest in tax evasion cases:
Ultimately, the Court dismissed the revision petition, upholding the Tax Board's decision. It concluded that the assessee was not liable for additional tax, penalty, or interest due to the application of the 2000 notification and the absence of conditions necessitating a 'C-Form.' The judgment highlighted the importance of correctly interpreting and applying notifications to determine tax liabilities in inter-State sales scenarios.

This detailed analysis of the judgment outlines the key legal issues, arguments presented, and the Court's reasoning in resolving the tax dispute related to the conflicting notifications and the assessment of liability for the assessee.