2015 (4) TMI 818 - HC - VAT and Sales Tax

Imposition of penalty u/s 78(5) of RVAT Act - Evasion of duty - Held that - Penalty has rightly been imposed by the learned AO and both the lower authorities i.e. DC(A) and Tax Board were not justified in deleting the penalty in the light of the judgment of Apex Court rendered in the case of M/s Guljag Industries (2007 (8) TMI 344 - SUPREME Court) wherein it has categorically been observed by the Hon ble Apex Court that if there is a blank declaration Form or material particulars have been left to be filled in then there is every apprehension that it could be reused and as such penalty could be imposed. On perusal of the finding of the lower authorities in the instant case it transpires that even the bill no. and date were left blank in the declaration Form ST 18-A which in my view in the light of the judgment of Hon ble Supreme Court(2007 (8) TMI 344 - SUPREME Court) are material particulars. Therefore once these columns were left unattended or to be filled in in my view the AO was well justified in coming to the conclusion that Form was incomplete and the goods were being carried on with an intention of evasion of tax - Decided in favour of Revenue.

Summary

Issues:
1. Imposition of penalty under Section 78(5) for incomplete declaration Form ST 18-A.
2. Justifiability of penalty imposition based on incomplete form columns.
3. Applicability of judgments by Hon'ble Apex Court in similar cases.

Analysis:
1. The revision petition challenged an order by the Rajasthan Tax Board dismissing an appeal by the petitioner department against the penalty imposed under Section 78(5). The Anti Evasion Wing intercepted a truck with incomplete declaration Form ST 18-A, leading to suspicions of tax evasion. The Assessing Officer imposed a penalty, which was later deleted by the DC(A) and upheld by the Tax Board.

2. The counsel for the Revenue argued that incomplete Form ST 18-A was crucial, citing judgments like M/s Guljag Industries Vs. Commercial Taxes Officer and Assistant Commercial Taxes Officer Vs. Bajaj Electricals Ltd. The Revenue contended that even if other documents were complete, an incomplete declaration form could lead to reuse and justified penalty imposition. On the other hand, the assessee's counsel argued that clerical errors in filling two columns should not warrant penalty, especially when other documents were in order.

3. The Hon'ble Court examined the contentions and reviewed the lower authorities' orders. Referring to the judgment in M/s Guljag Industries case, the Court emphasized the significance of complete declaration forms. The Court noted that leaving columns blank, including bill number and date, indicated incompleteness and potential tax evasion intention. Consequently, the Court upheld the penalty imposition, disagreeing with the lower authorities' decision to delete the penalty.

4. Ultimately, the Court allowed the revision petition in favor of the Revenue, citing the importance of complete declaration forms as per the Hon'ble Apex Court's precedent. The Court concluded that the penalty was justified based on the incomplete Form ST 18-A, aligning with the principles outlined in the referenced judgments. The decision favored the Revenue, and no costs were awarded.