2015 (9) TMI 1509 - HC - VAT and Sales Tax

Imposition of penalty u/s 78(5) of the Rajasthan Sales Tax Act 1994 - incomplete Form ST 18-A - material particulars in the declaration form ST 18-A was blank and also other material defects/discrepancies noticed in the sale bill builty - Held that - The Hon ble Apex Court in the case of Guljag Industries 2007 (8) TMI 344 - SUPREME Court had an occasion to consider an identical issue about incomplete/blank declaration forms and it has been opined by the Hon ble Apex Court that when material particulars are lacking in the declaration form then it goes to prove that the goods were being transported primarily with an intention for evasion of tax. The facts are quite clear that declaration Form ST 18-A was being carried which has been found to be blank in respect of material particulars and imposition of penalty on owner can be said to be just and proper. Accordingly the penalty was rightly imposed by the Assessing Officer - penalty restored - petition allowed - decided in favor of Revenue-petitioner.

Summary

Issues Involved:
1. Validity of the penalty under Section 78(5) of the Rajasthan Sales Tax Act, 1994.
2. Completeness and accuracy of the declaration form ST 18-A.
3. Jurisdiction and correctness of the Tax Board's decision.
4. Applicability of precedents set by higher courts.

Detailed Analysis:

1. Validity of the penalty under Section 78(5) of the Rajasthan Sales Tax Act, 1994:
The petition was directed against the judgment of the Rajasthan Tax Board, which reversed the penalty imposed by the Assessing Officer and upheld by the Deputy Commissioner (Appeals). The penalty was initially imposed due to discrepancies found in the declaration forms and other documents during the transportation of goods. The court emphasized that under Rule 53 of the Rajasthan Sales Tax Rules, 1955, it is mandatory for the declaration form to be completely filled in all respects, and any material particulars left blank warrant the imposition of a penalty. The court cited the Hon'ble Apex Court's judgment in Guljag Industries v. Commercial Taxes Officer, which upheld strict liability for incomplete declaration forms, emphasizing that such forms must be fully filled to prevent tax evasion.

2. Completeness and accuracy of the declaration form ST 18-A:
The declaration forms ST 18-A were found to be incomplete, lacking essential details such as the nature of items carried, quantity, weight, value, bill/challan number, and the name and address of the transporter. The court noted that the Assessing Officer and the Deputy Commissioner (Appeals) had detailed the discrepancies in their orders, which were not adequately addressed by the Tax Board. The court reiterated that the Hon'ble Apex Court in Guljag Industries had established that incomplete forms indicate an intention to evade tax, as they fail to provide the necessary information for proper assessment.

3. Jurisdiction and correctness of the Tax Board's decision:
The Tax Board's decision to delete the penalty was deemed perverse and unjustified by the court. The Tax Board had held that technicalities should not impede the carrying of declaration forms, and that the penalty should have been imposed on the person in charge of the vehicle rather than the owner of the goods. However, the court found this reasoning flawed, citing the Hon'ble Apex Court's judgment in ACTO v. Bajaj Electricals Limited, which clarified that the owner of the goods could be penalized under Section 78(5) even prior to the amendment on 22.3.2002. The court emphasized that the Tax Board's findings were contrary to established legal principles and precedents.

4. Applicability of precedents set by higher courts:
The court relied heavily on precedents set by the Hon'ble Apex Court and the Larger Bench of the Rajasthan High Court. The judgments in Guljag Industries and ACTO v. Bajaj Electricals Limited were cited to underscore that incomplete declaration forms attract strict liability and that the owner of the goods can be penalized for such discrepancies. The court also referenced the Larger Bench judgment in Assistant Commercial Taxes Officer v. Indian Oil Corporation Ltd., which reinforced the necessity of carrying duly filled-in declaration forms with the goods. The court concluded that the Tax Board's decision was inconsistent with these authoritative judgments.

Conclusion:
The court quashed and set aside the impugned judgment of the Tax Board, restoring the penalty imposed by the Assessing Officer. The decision reaffirmed the strict requirements for declaration forms under the Rajasthan Sales Tax Act and the liability of the owner of the goods for any discrepancies, in line with higher court precedents. The petition was allowed, and the penalty was reinstated, emphasizing the importance of compliance with statutory obligations to prevent tax evasion.