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2015 (5) TMI 379 - RAJASTHAN HIGH COURTJurisdiction of tax Board - Restoration of assessment order - Whether in construing the impugned transaction as sale and not lease, the learned Tax Board has exercised its jurisdiction appropriately for reversing the findings and conclusions of the first appellate authority and restoring the assessment order - Held that:- Tax Board, while noticing a very vital fact that dish antenna and digital decoders are supplied by Essel Agro to the petitioner-assessee on refundable security of five years, with a clear stipulation under an agreement that these goods are not for sale, has finally concluded that in want of lease agreement between the petitioner-assessee and the respective dealers, it is difficult to presume that the transaction is a lease, and as such it is a transaction of sale. In fact, none of the authorities have made any endeavor to find out truth about the transaction and more particularly the second appellate authority while passing the impugned order has not recorded cogent and convincing reasons. The very edifice of initiating proceedings by the Anti-Evasion Wing of the Commercial Taxes Department is investigation and the alleged incriminating materials collected during investigation against the petitioner-assessee. There remains no quarrel that petitioner-assessee has received dish antenna, digital decoder and other accessories from Essel Agro on payment of advance security deposit and there is an agreement between Essel Agro and the petitioner-assessee. Customers clearly know the price they will have to pay for the beer. They are required to pay an additional amount by way of deposit for taking away the bottle which is refunded if the bottle is returned. If the bottle is not returned the deposit is retained as liquidated damages for the loss of the bottle. There is a clear intention not to sell the bottle. Hence, we are of the view that the deposit cannot be considered as price of the bottles. - Tax Board has not exercised its jurisdiction appropriately in reversing the findings and conclusions of the first appellate authority and restoring the original assessment order. - entire matter requires re-examination by the original assessing authority, which has initiated the assessment proceedings pursuant to investigation. It will be noticed that if the Sales-tax authorities refused the prayer of the assessees to cross-examine the wholesale dealers, then such a refusal would not amount to an adequate opportunity of explaining the material collected by the assessing authority. Imposition of penalty pre-supposes an attempt of the assessee to avoid payment of tax or evasion of tax by resorting to certain dubious means. Legal position is no more res integra that avoidance, or evasion of tax is a sine qua non for imposition of penalty under Section 65 of the Act of 1994. The question of evasion of tax arises only when there is a concrete material against assessee that it is liable to pay the tax, which he has avoided to pay or made an attempt to evade the same. - question of tax liability of the petitioner is still fluid, inasmuch as, the dish antenna and digital decoders which it has supplied to the respective dealers is sale transaction or a lease is yet to be determined, obviously, it is not possible to infer mensrea of assessee in evading the tax. Therefore, this question at this stage cannot be conclusively decided, however, prima facie, it is answered in affirmative manner favouring the cause of the assessee of course subject to the final outcome of denovo assessment. As such, at this juncture, imposition of penalty is out of question. - Decided in favour of assessee.
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