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2016 (11) TMI 1195 - RAJASTHAN HIGH COURT

2016 (11) TMI 1195 - RAJASTHAN HIGH COURT - TMI - Levy of penalty u/s 76(6) of the Act - declaration form VAT 47 - declaration not fully filled - punching of form - Held that: - Even the subsequent declaration form, though produced by the assessee, in my view can be said to be incomplete, defective or not duly filled in, particularly taking into consideration the additional mandate of law of punching the declaration form, though the learned counsel contended that it is technical error, but in my .....

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ed is date, month of use and value, which neither the earlier Form nor the new Form was punched and, therefore, in my view the subsequent declaration form can also be said to be incomplete or not duly filled in and is not sufficient compliance of the mandate of law. - The judgment of Guljag Industries [2007 (8) TMI 344 - SUPREME Court] of which relevant paras have been reproduced hereinbefore, is applicable in the facts and circumstances of the instant case and when the additional feature of .....

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etition No. 43/2012 - Dated:- 23-9-2016 - Jainendra Kumar Ranka, J. For the Petitioner : Meenal Ghiya For the Respondent : Sarvesh Jain ORDER 1. The instant petition is directed against order dated 27.6.2011 passed by the Rajasthan Tax Board, Ajmer, in Appeal No.2324/2008/Jaipur, by which appeal of the respondent has been allowed. 2. The brief facts noticed are that on 26.12.2007, vehicle bearing no.RJ-32G-2087 was intercepted at Jaipur. The driver/in-charge produced builty no.161687, delivery n .....

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as date, month and value are concerned, was not duly punched and, therefore, it was prima facie noticed by the officer that it was with the intention of evasion of tax. It was also noticed that the vehicle contained 202 bundles of paper-roll whereas the documents produced were for 185 bundles of paper. Accordingly show cause notice u/s 76(2)(b) of the Act was issued. On the show cause notice, on behalf of the respondent assessee, in the light of judgment of apex court in the case of State of Raj .....

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e matter was assailed before the Dy. Com. (Appeals) who took into consideration the material placed on record and held that the judgment in the case of D.P. Metals (supra) is not applicable and also held that in the light of judgment in the case of Guljag Industries vs CTO, (2007) 7 SCC 269, the penalty was rightly imposed and the goods were transported with the intention of evasion of tax. On a further appeal by the assessee before the Tax Board, resulted into allowing of the appeal, particular .....

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d to be interfered with, particularly in view of the fact that both the AO as well as Dy. Com. (Appeals) found as a finding of fact that the material particulars were found left blank and it clearly proved that the goods were being transported with the intention of evasion of tax. Learned counsel further contended that merely producing another declaration form is of no avail for compliance of the mandate of law is required to be fulfilled. Rule 53 mandates that there should be sufficient complia .....

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with the intention of evasion of tax, though before the Tax Board specifically this claim was raised by the authorised representative that the declaration form is not punched, however, the Tax Board has conveniently ignored this material aspect and thus contended that in the light of the judgment in the case of Guljag Industries (supra), the penalty was rightly imposed and wrongly deleted by the Tax Board. 5. Per contra, learned counsel for the assessee contended that the imposition of penalty w .....

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of Guljag Industries (supra) is not applicable and distinguishable. He also contended that punching of a document is a technical error and ought not to be made a basis for imposition of penalty. He also relied upon the judgments rendered in the case of ACTO v. M/s S. Vrindavan Oil Products, 2006 (Part 3) Tax Up-Date (15) page 109; CTO v. M/s. Globe Transport Corporation, S.B. STR No.165/2011 decided on 26.2.2013; ACTO v. M/s. REBI Casting (Pvt.) Ltd. S.B. STR No.400/2008 decided on 1.8.2013; ACT .....

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le in movement (1) The Commissioner may, with a view to prevent or check avoidance or evasion of tax, by notification in the Official Gazette, direct the setting up of a check-post or the erection of barrier or both, at such places as may be specified in the notification, and every officer or official who exercises his powers and discharges his duties at such check-post or barrier by way of inspection of documents produced and goods being moved shall be its Incharge. (2) The owner or a person du .....

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h memos; (c) produce all the documents including prescribed declaration forms relating to the goods before the Incharge of the check-post or barrier; (d) furnish all the information in his possession relating to the goods; and (e) allow the inspection of the goods by the Incharge of the check-post or barrier or any other person authorised by such Incharge. Explanation: For the purpose of this Chapter 'goods in movement' shall mean- (i) the goods which are in the possession or control of .....

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territory of the State of Rajasthan, the assessing authority or an officer authorised by the Commissioner in this behalf may stop the vehicle or the carrier or the person carrying such goods, for inspection, at any place within his jurisdiction and the provisions of sub- section (2) shall mutatis mutandis apply. (5) Where any goods in movement, other than exempted goods, are without documents, or are not supported by documents as referred to in sub- section (2), or documents produced appears to .....

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hall give a receipt of the goods to the person from whose possession or control they are seized; (c) release the goods seized under clause (b) to the owner of the goods or to a person duly authorised by such owner, during the course of the proceeding, if adequate security of the amount equal to the estimated value of the goods is furnished. (6) The Incharge of the check-post or barrier or the officer authorized under sub-section (4), after having given the owner of the goods or person duly autho .....

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the goods in movement for import within the State.- (1) A registered dealer, (i) who import from any place outside the State, any taxable goods, as may be notified by the State Government, for sale; or (ii) who receives any taxable goods as may be notified by the State Government, consigned to him from outside the State or by way of branch transfer/depot transfer/stock transfer; or (iii) who intends to bring, import or otherwise receives any taxable goods as may be notified by the State Governme .....

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ods in movement. However, where goods covered under single invoice are being carried in more than one vehicle, separate Form VAT-47 shall be accompanied with each of such vehicles along with photo copy of the original invoice and challan of the goods carried in the vehicle. [Provided that subject to such conditions as may be specified by the Commissioner, a registered dealer may also furnish a declaration in Form VAT-47A, electronically through the official web-site of the Commercial Taxes Depar .....

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n of the aforesaid information the dealer shall receive an Identification number through S.M.S. on same cellular phone. He shall also furnish or cause to be furnished the declaration Form VAT-47 completed in all respect to his assessing authority by the next working day. The owner or a person duly authorised by such owner or the driver or the person incharge of a vehicle or carrier or of goods in movement shall intimate the said Identification number to the assessing authority or the person auth .....

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sessing authority or the officer authorized under sub-section (4) of section 76 at the time of inspection who shall retain the original portion of the declaration form and return the duplicate portion after signature and marking seal in token of having verified it, to person producing it and such officer shall send the retained original portion of the declaration form to the assessing authority or the authorized officer. (3) If the declaration Form referred to in sub- rule (1) in respect of the .....

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ection (2) of section 76. Explanation: For the purpose of this rule, 'taxable goods' means all goods except the goods which are exempted from tax in accordance with the provisions of the Act." 8. Section 76 of the VAT Act takes into consideration the movement of goods while in transit and it envisages that the owner, driver or incharge of the vehicle, which is carrying on certain goods, shall stop the vehicle or carrier at every check post or barrier while entering and leaving the l .....

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in ink and ensure that the value, date and month of use of such Form shall be punched at the specified place provided for in the Form. 10. On perusal of the facts, admittedly at the time of interception of the vehicle, the declaration form was found with the in-charge/driver, it was incomplete and number of columns were even left blank, which has already been noticed earlier. It may be on a show cause notice having been given, the assessee did produce another declaration form which is claimed t .....

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apex court in the case of D.P. Metals (supra) held that carrying declaration form complete in all respect is mandatory, however, in case the declaration form was not found with the vehicle, the apex court held that if a show cause notice is given and a declaration form is produced at the first instance, then such a Form can be considered to be sufficient compliance. It was held ad infra :- "32. Such submission of false or forged documents or declaration at the check-post or even thereafter .....

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ch referred to in Section 78(5) can be regarded as technical or venial. Once the ingredients of Section 78(5) are established, after giving a hearing and complying with the principles of natural justice, there is no discretion not to levy or levy lesser amount of penalty. If by mistake some of the documents are not readily available at the time of checking, principles of natural justice may require some opportunity being given to produce the same. This provision cannot be read as to imply that t .....

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ds and it had the competence to so fix. As held by this Court in Rai Ramakrishna v. State of Bihar at SCR p 910: "The objects to be taxed so long as they happen to be within the legislative competence of the legislature can be taxed by the legislature according to the exigencies of its needs, because there can be no doubt that the State is entitled to raise revenue by taxation. The quantum of tax levied by the taxing statute, the conditions subject to which it is levied, the manner in which .....

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nk, the apex court in the case of Guljag Industries (supra) held that such declaration forms cannot be considered, and it would be appropriate to quote the relevant paras which read ad infra:- "25. There is dichotomy between contravention of Section 78(2) of the said Act which invites strict civil liability on the assessee and the evasion of tax. When a statement of import/export is not filed before the A.O. it results in evasion of tax, however, when the goods in movement are carried witho .....

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retion to the competent authority in the matter of quantum of penalty fixed at 30 per cent of the estimated value is to provide to the State a remedy for the loss of revenue. The object behind enactment of Section 78(5) is to emphasise loss of revenue and to provide a remedy for such loss. It is not the object of the said Section to punish the offender for having committed an economic offence and to deter him from committing such offences. The penalty imposed under the said Section 78(5) is a ci .....

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8(5) is neither criminal nor quasi-criminal in nature. The penalty is for statutory offence. therefore, there is no question of proving of intention or of mens rea as the same is excluded from the category of essential element for imposing penalty. Penalty under Section 78(5) is attracted as soon as there is contravention of statutory obligations. Intention of parties committing such violation is wholly irrelevant. 28. Moreover, in the present case, we find that goods in movement carried with Fo .....

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tion given by the assessees is regarding the language problem. There is no merit in these defences. They are excuses. The declaration forms were unfilled so that they could be used again and again. The forms were collected by the consignee from the said Department. The consignee undertakes to see that the value of the goods is supplied by the consignor. It is not open to the consignee to keep the column in respect of the description of goods as blank. Even the column dealing with nature of trans .....

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terial respects. therefore, A.O. was right in drawing inference of mens rea against the assessees. 29. It has been repeatedly argued before us that apart from the declaration forms the assessees possessed documentary evidence like invoice, books of accounts 14 etc. to support the movement of goods and, therefore, it was open to the assessees to show to the competent authority that there was no intention to evade the tax. We find no merit in this argument. Firstly, we are concerned with contraven .....

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impossible for the assessing officer to assess the taxable goods. Moreover, in the absence of value/price it is not possible for the A.O. to arrive at the taxable turnover as defined under Section 2(42) of the said Act. therefore, we have emphasized the words "material particulars" in the present case. It is not open to the assessees to contend that in certain cases of interstate transactions they were not liable in any event for being taxed under the RST Act 1994 and, therefore, pena .....

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e to contravene and say that the goods were exempt. Without disclosing the nature of transaction it cannot be said that the transaction was exempt. In the present case, we are only concerned with the goods in movement not being supported by the requisite declaration." 13. Both the judgments have, however, held that if the declaration form is not found or/and found not filled in, in respect of material particulars, then it can be held that the goods were being transported with the intention .....

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are not filled in. 15. Even the subsequent declaration form, though produced by the assessee, in my view can be said to be incomplete, defective or not duly filled in, particularly taking into consideration the additional mandate of law of punching the declaration form, though the learned counsel contended that it is technical error, but in my view it cannot be said to be mere technicality particularly when it is an additional feature introduced by the Government to avoid misuse or reuse of decl .....

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