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of <h1>Court affirms penalty reduction under Rajasthan Sales Tax Act, emphasizes show cause notice requirement</h1> <h3>Commercial Taxes Officer, Circle E, Jaipur Versus SB. Electric Company</h3> Commercial Taxes Officer, Circle E, Jaipur Versus SB. Electric Company - [1993] 90 STC 152 (Raj) Issues:1. Penalty imposed under section 16(1)(e) of the Rajasthan Sales Tax Act2. Reduction of penalty imposed under section 16(1)(j) of the ActAnalysis:Issue 1: Penalty under section 16(1)(e)The case involved a dealer in electric goods and steel pipes who had collected 10% tax but deposited only 4% tax. The assessing authority imposed penalties under section 16(1)(e) and 16(1)(j) of the Act. The appellate authority set aside the penalty under section 16(1)(e) as there was no mens rea or misrepresentation. The Tribunal upheld this decision, stating that no offense under section 16(1)(e) was committed as the return showed correct particulars, and there was no requirement to show tax collected in the return. Therefore, the penalty under section 16(1)(e) was quashed.Issue 2: Reduction of penalty under section 16(1)(j)The Tribunal reduced the penalty under section 16(1)(j) from Rs. 8,000 to Rs. 2,000. The assessing authority argued that the penalty should include the forfeited tax amount as well. However, the court cited the Supreme Court's decision that forfeiture and penalty are separate actions, requiring a show cause notice. As no notice for forfeiture was issued, and no finding on excess collection was made, the Tribunal's decision to reduce the penalty to the maximum of Rs. 2,000 was justified. The court held that the penalty under section 16(1)(j) was correctly reduced, and no offense under section 16(1)(e) was established, leading to the dismissal of the revision petition.In conclusion, the court upheld the Tribunal's decision to quash the penalty under section 16(1)(e) and reduce the penalty under section 16(1)(j) to Rs. 2,000, emphasizing the distinction between forfeiture and penalty actions and the requirement for a show cause notice before imposing penalties.
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