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2018 (12) TMI 1542 - HC - VAT and Sales TaxHuge suppression of taxable turnover by the dealer - Validity of assessment proceedings - PGST Act - failure on the part of first appellate authority to perform the statutory duties enshrined upon him - PVAT Act - correctness of the orders passed by the Assessing Officer, the first appellate authority and the Appellate Tribunal in its entirety - penalty u/s 24(3) of the Act - penalty u/s 13(3) of the Act - opportunity of cross examination of the officials not provided - intent to evade present or not - burden of proof. Principles of natural justice - details furnished by the dealer in the Form C declarations - whether the dealer was justified in contending that they should be given an opportunity to cross verify the details furnished by the HPCL, cross examination of their officers, before the assessment proceedings could be completed? - Held that:- The documents, namely, the form of declaration in Form C is a document generated by the petitioners/dealers. Therefore, whatever statement made in such declaration will fully bind the dealer. In such circumstances, there is a clear estoppel against the dealer to contend something contrary to the Form C declaration. The theory as propounded by the dealer that blank forms were handed over to the HPCL is a false statement. The documents were verified by the first appellate authority and there is a clear finding to the effect that the dealer has signed all pages of the declarations. Thus, the dealer, at the very first instance, has come out with the false statement. As mentioned above, the counterfoil has to be retained by the petitioner/dealer and therefore, they cannot feign ignorance of the details contained therein - it is too late for the dealer to contend that they are not aware of the details contained in the Form C declaration and if they still persist to contend so, even before others, their action has to be strongly deprecated, as they are perpetutately false representation. The Oil Corporation, HPCL has not only given the copy of the C-Form retained by them, which in fact, was issued by the dealer to them, but also has given the copies of the delivery details. Therefore, if the petitioner/dealer was a rightful person, the first step he should have taken is to verify these details with his selling dealers, namely, HPCL, who has granted dealership to do such business. Instead of adopting such a modus operandi, the petitioner/dealer has proceeded at a tangent by blaming the State Corporation without any details by making vague allegations, which cannot be appreciated. Thus, the fundamental basis on which the dealer has built up his case has crumbled because of the above fact that the Form C declaration is a solemn form made by the petitioner/dealer and is estopped from contending otherwise. Therefore, the initial burden has been fully discharged by the Department and it is for the petitioner/dealer to disprove the allegation against them and prove their innocence. No iota of evidence has been produced by the dealer to dislodge his own declaration made in Form C. Thus, we are of the clear view the question of applying Section 101 of the Indian Evidence Act, 1872 would not arise. It is not clear as to why the Department had not proceeded further in the matter, especially when they are contesting the present proceedings by filing tax case revisions to sustain the orders passed by the assessing authority. Thus, the first contention, regarding the requirement for cross examination, has to necessarily fail and accordingly, decided against the dealer. It was also contended that no reasons were given by the authorities as well as the Tribunal - Held that:- We wholly disagree with such a contention after going through the orders passed by the Assessing Officer. Admittedly, an Assessing Officer cannot be expected to write a judgment or a judicial order. We find that the Assessing Officer has analysed the objections given by the dealer and assigned reasons in paragraph 4 of his order. Therefore, we do not agree with the submission that the order is devoid of merits. Burden of proof - Held that:- The burden of proof had remained with the dealer and it is not for the Department to establish anything in the matter, as it is a document generated by the dealer. Levy of penalty - requirement of mens rea - CST Act - Held that:- The issue revolves around a Form C declaration and if according to the dealer, he had submitted the blank forms, it would amount to an offence. However, the first appellate authority found that there was no blank forms but, signed by them in all pages including annexure along with invoice bills - If that is so, then the details furnished therein should obviously tally with the return filed by the dealer. If there is discrepancy in that, the burden is on the dealer to disprove the same, more particularly, when the allegation is there is large scale suppression of taxable turnover. Mens rea is writ large on the face of the record. There is no further proof required to establish the blameworthy conduct of the dealer. Though we may not be fully justified in examining the past conduct of the dealer, especially when they had succeeded in the earlier writ petitions, which also arose out of the same type of transaction in the previous years and the Department having not filed an appeal yet, this would be a clear indicator as regards the modus operandi of the dealer. Thus, we safely conclude that there was sufficient mens rea on the part of the dealer and this can be gathered from their conduct and the Assessing Officer was justified in imposing penalty, as confirmed by the first appellate authority. There is no case for exercising any sympathy in such cases more particularly, when the transactions are all financial transactions especially dealing with the petroleum products, which can be handled only by licensed dealers such as the petitioner. There is no error in the decision making process as done by the Assessing Officer and such order was rightly affirmed by the first appellate authority as well as by the Tribunal - the Tax Case Revisions filed by the petitioners/dealers are dismissed and the questions of law framed in those revisions are answered against the petitioners - the order passed by the Assessing Officer is restored.
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