2015 (2) TMI 139 - HC - VAT and Sales Tax

Imposition of penalty - cuttings/overwritings in declaration form - Intention to evade tax - Held that- Penalty has rightly been imposed by the learned ACTO and both the lower Appellate Authorities were not justified in deleting the penalty as the Hon ble Apex Court clearly speaks about the fact that if there is a blank declaration form, or material particulars have been left blank then there is every apprehension that it could be reused and in such case, penalty could be imposed. Here in this case, there are overwritings and cuttings in the columns of the declaration form and in material particulars and the learned ACTO has rightly come to the conclusion that the form was re-used and which has been the view of the Hon ble Apex Court in the case of Guljag Industries v. Commercial Taxes Officer (2007 (8) TMI 344 - SUPREME Court). Therefore, in the light of the aforesaid judgment of the Apex Court in the case of Guljag Industries v. Commercial Taxes Officer (supra), the said judgment in my view, is squarely applicable to the facts and circumstances of the present case as the apprehension of the ACTO that the form could be re-used has been found to be correct. On perusal of the order, it is found that there are cuttings and overwritings against the columns of value of the goods and also cuttings in the other columns of the form as referred to above, therefore, the penalty has been rightly imposed. The Tax Board had summarily decided the issue by following the previous order of Full Bench of the Tax Board, which has already been reversed by the Hon ble Apex Court, in the case of Assistant Commercial Taxes Officer v. Bajaj Electricals Ltd. (2008 (11) TMI 374 - SUPREME COURT OF INDIA). - penalty in such a matter could be imposed and the ACTO was fully justified in imposing the penalty and the order of the ACTO Flying Squad, Bharatpur imposing penalty is sustained. The order passed by the two Appellate Authorities, are quashed, set aside and reversed - Decided in favour of Revenue.

Summary

Issues Involved:
1. Revision petition filed against order passed by Tax Board affirming deletion of penalty.
2. Imposition of penalty for tax evasion based on cuttings in declaration form.
3. Interpretation of relevant legal provisions and previous judgments.
4. Justification of penalty imposition by the Assistant Commercial Taxes Officer.
5. Applicability of Supreme Court judgments on penalty imposition.

Issue 1:
The revision petition was filed against the order of the Tax Board affirming the deletion of penalty imposed by the Assistant Commercial Taxes Officer. The petitioner-department challenged the decision of the Tax Board, which upheld the deletion of the penalty by the Deputy Commissioner (Appeals) based on the Full Bench judgment of the Tax Board.

Issue 2:
The penalty was imposed for tax evasion due to cuttings and overwritings in the declaration form, indicating a possible intention to evade taxes. The Assistant Commercial Taxes Officer concluded that the respondent-assessee re-used the declaration form with cuttings, leading to the penalty imposition of Rs. 42,000.

Issue 3:
The petitioner argued that the cuttings in the declaration form violated Rule 53 and were indicative of tax evasion. Referring to the case law of Guljag Industries v. Commercial Taxes Officer, the petitioner contended that even a blank declaration form could lead to penalty imposition, and in this case, the form was re-used, making it a nullity.

Issue 4:
The High Court judge analyzed the arguments presented and concluded that the penalty was rightly imposed by the Assistant Commercial Taxes Officer. The judge emphasized that the cuttings and overwritings in the declaration form supported the apprehension that it could be re-used, justifying the penalty imposition.

Issue 5:
The High Court judge relied on Supreme Court judgments, particularly the case of Guljag Industries v. Commercial Taxes Officer, to support the imposition of the penalty. The judge highlighted that the Full Bench judgment of the Tax Board, which was the basis for deleting the penalty, had been reversed by the Supreme Court in the case of Assistant Commercial Taxes Officer v. Bajaj Electricals Ltd.

In conclusion, the High Court allowed the revision petition, setting aside the orders of the lower Appellate Authorities and sustaining the penalty imposed by the Assistant Commercial Taxes Officer. The judgment emphasized the importance of upholding penalties for tax evasion based on cuttings and overwritings in official documents, in line with relevant legal provisions and Supreme Court precedents.