2014 (7) TMI 1041 - HC - VAT and Sales Tax

Levy of tax - Seal of check-post of the State of Rajasthan on the documents not available - Held that - There is no quarrel in the factual position that the required documents, as per the provisions of section 78 (2) (b) of the Act of 1994, were available and produced at the time of checking of vehicle/goods and required tax had already been paid by the assessee. The only reason assigned in the impugned order passed by the learned Tax Board for restoring the order of the assessing authority is that the seal of the check-post of the State of Rajasthan on the documents is not available. From a bare reading of section 78(2)(b) of the Act of 1994, it is amply clear that the requirement of seal of the check-post is not mandatory - Following decision of Commercial Taxes Officer v. Devendra Yadav 2010 (11) TMI 885 - RAJASTHAN HIGH COURT - Decided in favour of assessee.

Summary

Issues involved:
Interpretation of section 78(2)(b) of the Act of 1994 regarding the requirement of seal of the check-post on documents during checking of vehicle/goods.

Analysis:
The judgment delivered by Justice P.K. Lohra of the Rajasthan High Court pertains to a revision petition where the issue involved was whether the seal of the check-post of the State of Rajasthan on documents is mandatory as per section 78(2)(b) of the Act of 1994. The counsel for both parties agreed that a previous decision of the court in the case of Commercial Taxes Officer v. Devendra Yadav had already addressed this issue. The court noted that the required documents were available and produced during the checking of the vehicle/goods, and the tax had been paid by the assessee. The impugned order by the Tax Board was based on the absence of the check-post seal on the documents. However, the court emphasized that section 78(2)(b) does not mandate the presence of the check-post seal. Referring to a Division Bench decision in State of Rajasthan v. Tajiander Pal, the court reiterated that the provisions are directory, not mandatory. The Division Bench had held that if all necessary documents are available during the checking, the intention to evade tax cannot be inferred. Both appellate authorities had found no mens rea on the part of the assessee as all required documents were present, and tax had been paid, precluding any inference of tax evasion.

In light of the settled legal position and precedents, the court concluded that the impugned order by the Tax Board could not be sustained. Therefore, the order was reversed and set aside, allowing the revision petition. The judgment did not impose any costs on either party. This decision clarifies the interpretation of section 78(2)(b) of the Act of 1994, emphasizing that the presence of the check-post seal is not mandatory, and the availability of all required documents during checking is crucial in determining the intention to evade tax.