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2015 (10) TMI 219 - HC - VAT and Sales TaxPenalty under section 78(5) - Contravention of Section 78(2) of the 1994 Act read with Rule 53(1) (a)(ii) of the Rules - Held that:- Where goods in transit are found to be unaccompanied by any material document required under Section 78(2) of the 1994 Act, on show cause notice being issued in respect therefor if such document is supplied filling up the lacuna, no penalty would be leviable. The Hon'ble Supreme Court has not defined the nature of mistake which alone would be rectifiable by submitting the required documents with the reply to show cause notice. As long as the missing document, in this case as the declaration form ST-18-A, was furnished with the reply to show cause notice, it ought to have sufficed. Aside of aforesaid, it is not in dispute that the goods in transit were in the course of stock transfer from petitioner's factory at Aurangabad to its branch at Jaipur and a case of tax evasion could not be made out. The Assessing Officer or for that matter the Appellate Authority and the Tax Board have not held that the goods were not being transported under a branch transfer and have yet based their judgment on a purported intent to evade tax. The allegation of intent to evade tax was palpably facetious, the declaration in form ST-18-A having been submitted with the reply - order of the appellate authority and assessing officer levying penalty under Section 78(5) of the 1994 Act is liable to be set aside - Decided in favour of assessee.
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