2013 (5) TMI 776 - HC - VAT and Sales Tax

Deletion of penalty - Evasion of tax - Malafide intention - Held that - Tax Board has come to the correct conclusion in this case and no penalty in law is leviable particularly in view of the fact that the goods were purchased from village lamba Hari Singh and it was being transmitted to a party of West Bengal and the respondent-assessee directed the goods to be filled in by the transport company from Kishangarh which was the nearest point and telephonic instructions were given as the respondent was at far of place. There is no discrepancy in the bill about the vehicle number and it happened only because of telephonic communication and communication gap of hearing by the other side otherwise all the papers have been found to be in order which is also clear on perusal of the orders that the goods were purchased by the assesseerespondent from farmer Ganesh Lal on October 5 1998 and even paid mandi tax amounting to Rs. 2919.24 which have duly been recorded in the cash book dated October 5 1998 and also in the stock register maintained by the respondent-assessee. Therefore when all these have been found to be duly recorded in the books as a fact then in my view the Tax Board has come to the correct conclusion that there was no intention of evasion of tax. - Decided against Revenue.

Summary

Issues:
Sales tax revision petition regarding penalty imposed on the respondent-assessee for transporting goods; Appeal against the penalty deletion by Deputy Commissioner (Appeals); Discrepancies in submissions leading to penalty imposition; Justification for penalty deletion by appellate authorities; Correctness of Tax Board's decision affirming penalty deletion.

Analysis:
The case involved a sales tax revision petition stemming from a penalty imposed on the respondent-assessee for transporting goods, challenged after the Deputy Commissioner (Appeals) deleted the penalty. The initial penalty of Rs. 42,636 was based on discrepancies found during a vehicle check in 1998, leading to a show cause notice. The assessing officer disbelieved the representative's explanation, resulting in the penalty imposition.

The respondent appealed the penalty, leading to the Deputy Commissioner (Appeals) deleting it in 1999. The petitioner-Department then appealed to the Tax Board, which upheld the deletion in 2007, prompting the current revision petition. The petitioner argued that contradictory submissions warranted the penalty, citing section 78(5) for justification, urging for the penalty's restoration.

Conversely, the respondent's counsel contended that all necessary documents were provided, goods were bought through mandi samiti, and properly recorded, negating penalty imposition. They emphasized that the appellate decisions were factual findings without legal questions, urging dismissal of the revision petition.

Upon review, the judge found the Tax Board's decision correct, noting no intention of tax evasion due to proper documentation and record-keeping by the respondent. The judge emphasized that penalties cannot be imposed on conjectures or minor discrepancies, supporting the Deputy Commissioner (Appeals) and Tax Board's reversal of the penalty.

Ultimately, the judge concluded that the Tax Board and Deputy Commissioner (Appeals) made the correct findings, devoid of legal issues, and dismissed the revision petition as lacking merit. The decision highlighted the importance of factual evidence over suspicions or doubts in penalty imposition cases.