2001 (10) TMI 881 - SC - VAT and Sales Tax

Whether section 78(5) of the Rajasthan Sales Tax Act, 1994, was unconstitutional and ultra vires - Penalty levy - Held that:- The penalty so fixed is meant to be a deterrent and we do not see anything wrong in this. The quantum of penalty under the circumstances enumerated in section 78(5) cannot, in our opinion, be regarded as illegal. The quantum of tax levied by the taxing statute, the conditions subject to which it is levied, the manner in which it is sought to be recovered, are all matters within the competence of the Legislature, and in dealing with the contention raised by a citizen that the taxing statute contravenes article 19, courts would naturally be circumspect and cautious" as such there cannot, in the present case, be any valid challenge to the rate of penalty provided for in section 78(5) of the Act.

Thus the provisions of section 78(5) of the Rajasthan Sales Tax Act, 1994, are valid and the impugned decision of the High Court in this regard is not correct.

These appeals, except Civil Appeals No. 1321 of 2001, are accordingly allowed. Civil Appeal No. 1321 of 2001 is dismissed.