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2019 (11) TMI 1156 - HC - VAT and Sales TaxScope and validity of SCN - Levy of penalty under Section 40(2) of the JVAT Act and under Section 70(5)(b) - case of petitioner is that from bare perusal of the show cause notice, it is evident that no gist of accusations in regards to penalty under Section 70 (5) (b) of the Act has been given in terms of Rule 58(1) of the JVAT Rule 2006 - HELD THAT:- Rule 38(2) (i) deals with retailers and not with manufacturers which the petitioner in this case is and though the said rule deals with daily takings. Rule 38(2)(r) deals with stock records, but no period is mentioned therein particularly daily maintenance of accounts. Rule 38(6) deals with manufacturers which speak of maintaining month wise accounts - The Tribunal dealt with the fact that on 24.05.2010, the monthly abstract purchases ‘April-2010’ has been mentioned and also recorded the petitioner’s contention that legislature has not used any explanation like daily entry of transaction. The Tribunal has committed a blunder in as much as instead of the word “retailer” used the word “dealer”. This is a mistake of fact committed by the Tribunal and its findings on the incorrect provision of law which is not applicable in the case of the petitioner. There are no discrepancies in accounts maintained by the petitioner and accounts were accepted by the authorities and this aspect would be an important factor in holding that earlier proceedings under Section 70 (5) (b) were bad in law - It would be evident from the facts and documents available on records that the allegation is not that the original documents were not and are unaccounted goods, rather the allegation is that the entries on daily basis was not made in the books of accounts. In the instant case, notice was issued to the Writ petitioner, but no reason, whatsoever, in relation to penalty under Section 70 (5) (b), worth name was given so as to enable the petitioner to file its show cause. In other words, the notice was not in terms of Rule 58 and contention of the State that gist of allegation was provided in the inspection report cannot be taken into consideration and as such on the first point itself that is non issuance of proper show cause notice in terms of Rule 58 of the JVAT Rules 2006 would render the entire proceedings under Section 70 (5) (b) void ab initio. Scope of SCN - imposition of penalty - HELD THAT:- It is apparent that the Tribunal has also gone way beyond the penalty order under Section 70 (5) (b) of the JVAT Act, wherein the only allegation was that entries have not been made into books of accounts but it was never alleged in the penalty order or show cause notice that originals of the documents of purchase were to be produced, the allegation also was not that these are unaccounted goods, rather the only allegation was that entries on daily basis was not made in the books of accounts but the Tribunal in the Impugned Order has repeatedly observed that original documents were not produced - From perusal of the returns, it is evident that all the details of sales and purchases both within the State as well as Inter State transactions have been provided. The authorities below as well as the Tribunal failed to consider the return which was filed by the Petitioner to find out if at all there was any evasion of tax. The impugned orders are liable to be set-aside in as much as the Show Cause Notice itself is not in accordance with the JVAT Act - petition allowed.
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