2016 (6) TMI 186 - HC - VAT and Sales Tax

Imposition of penalty - Section 78(5) of the RST Act - Motorcycles were being transmitted with the intention of evasion of tax - Declaration form ST-18-A was incomplete in all respect and the material particulars were not filled in - Held that - it is a case of stock transfer as all the three authorities have come to a finding of fact in this regard. Though the DC(A) as well as the Tax Board have gone into the issue that the vehicle contained all necessary requisite documents by which no case was made out of evasion of tax, however, I may add that though this argument was not raised before any of the authorities that prior to 30/03/2000 on the basis of the notification issued by the State of Rajasthan bearing No./F.4(1)FD/Tax/Div/2000-314 dt. 30/03/2000, there was no necessity of carrying of declaration form ST-18-A in the case of stock transfer/branch transfer/depot transfer of goods or SOS transfer and even if the form was found to be blank or incomplete, no penalty could be levied. Once there was no necessity of carrying declaration form prior to 30/03/2000, question of penalty does not arise. - Decided against the petitioner

Summary

Issues:
1. Interpretation of the declaration form ST-18-A under Rule 53 of the RST Rules.
2. Determination of stock transfer and evasion of tax.
3. Applicability of penalty under Section 78(5) of the RST Act.
4. Consideration of notification by the State of Rajasthan dated 30/03/2000 regarding declaration form ST-18-A.

Analysis:
1. The case involved a dispute regarding the completion of declaration form ST-18-A under Rule 53 of the RST Rules. The petitioner argued that incomplete particulars rendered the form invalid, citing the judgment in Guljag Industries Vs. Commercial Taxes Officer. However, the respondent contended that the form's incompleteness was considered alongside evidence supporting stock transfer, ultimately leading to the penalty's deletion by appellate authorities.

2. The core issue revolved around determining whether the goods were being transmitted as a stock transfer or with the intent of tax evasion. The authorities found in favor of stock transfer based on supporting bills and vouchers. The petitioner's claim of tax evasion was countered by the respondent, emphasizing the proper documentation and the absence of evidence supporting evasion.

3. The imposition of penalty under Section 78(5) of the RST Act was a significant point of contention. The Assessing Officer initially imposed the penalty, which was later deleted by the Deputy Commissioner (Appeals) and upheld by the Tax Board. The petitioner challenged this deletion, arguing that the incomplete declaration form warranted the penalty. However, the respondent highlighted the completeness of other documents and the nature of the goods transfer.

4. The notification issued by the State of Rajasthan on 30/03/2000 regarding the necessity of carrying declaration form ST-18-A before that date played a crucial role in the judgment. The respondent argued that since the goods were dispatched prior to 30/03/2000, the form's incompleteness was irrelevant, as per the notification. This notification was pivotal in justifying the deletion of the penalty by the appellate authorities and was a key factor in upholding the Tax Board's decision.

In conclusion, the High Court dismissed the sales tax revision petition, emphasizing the factual findings supporting stock transfer, the pre-30/03/2000 dispatch date, and the lack of legal grounds for challenging the Tax Board's decision. The judgment highlighted the importance of complete documentation, the interpretation of relevant rules, and the impact of notifications on penalty imposition in tax matters.