2011 (3) TMI 1549 - HC - VAT and Sales Tax

Court Upholds Exemption for Importers: Form ST-18A Not Required

The court dismissed the revision petition filed by the Revenue, upholding the appellate authorities' decisions to set aside the penalty imposed under ... Whether the learned assessing authority was not justified in imposing penalty under Section 78(5) of the Act amounting to ₹ 1,95,019/- on the ground that the declaration in Form ST-18A accompanying the other relevant documents like Sale Invoice, Bill of Entry, Transport Receipt etc. was found blank in respect of column No.2 to 9 of the said declaration in ST 18A? Held that:- For contravention of Section 78(2), the penalty under Section 78(5) is attracted and whether the goods are put in movement under local sales, imports, exports or inter-State transactions, they are goods in movement and therefore, they have to be supported by the requisite declaration in the form of ST 18A and on the facts of the case, where ST-18A/18C was found to be not duly filled in, the Hon'ble Apex Court held that imposition of penalty under Section 78(5) of the Act was justified. Thus this court finds no ground to interfere with the impugned appellate orders and the revision petition being devoid of merits is accordingly dismissed. Issues Involved:1. Justification of penalty under Section 78(5) of the Rajasthan Sales Tax Act, 1994.2. Requirement of Form ST-18A for imported goods.3. Interpretation of Section 81 and Rule 53 of the Rajasthan Sales Tax Act, 1994.4. Applicability of Supreme Court judgment in Guljag Industries v. CTO.5. Validity of the Circular issued by the Commercial Taxes Department on 8.2.2001.Detailed Analysis:1. Justification of Penalty under Section 78(5) of the Rajasthan Sales Tax Act, 1994:The assessing authority imposed a penalty of Rs. 1,95,019/- under Section 78(5) due to the declaration in Form ST-18A being found blank in respect of columns No. 2 to 9. Both appellate authorities, the Dy. Commissioner (Appeals) and the Tax Board, set aside the penalty, holding that the accompanying documents (Sale Invoice, Bill of Entry, Transport Receipt) provided substantial compliance with Section 78(2). The Tax Board relied on the case of M/s Jitendra and Co., which established that if all particulars were available at the time of checking, the penalty was not justified.2. Requirement of Form ST-18A for Imported Goods:The respondent-assessee argued that for goods imported from outside the country, there was no legal requirement to furnish Form ST-18A. The Dy. Commissioner (Appeals) supported this view by citing the Sales Tax Tribunal's decision in CTO v. Abbas Khan, which held that imported goods were not subject to the same requirements as inter-state goods under the Rajasthan Sales Tax Act.3. Interpretation of Section 81 and Rule 53 of the Rajasthan Sales Tax Act, 1994:The respondent-assessee contended that Section 81 and Rule 53, which mandate furnishing Form ST-18A for goods 'imported from outside the State,' did not apply to goods imported from outside the country. The court noted that the language of these provisions suggested they were intended for inter-state transactions within India, not international imports. The court also highlighted that the Commercial Taxes Department's Circular dated 8.2.2001 clarified that registered dealers importing goods from outside the country were not required to furnish Form ST-18A.4. Applicability of Supreme Court Judgment in Guljag Industries v. CTO:The Revenue relied on the Supreme Court's decision in Guljag Industries, which emphasized the necessity of material particulars in Form ST-18A for goods in movement, including imports and inter-state transactions. However, the court distinguished this case, noting that the Supreme Court's observations were obiter dicta and did not specifically address direct imports from outside the country. The court found that the factual context of Guljag Industries involved inter-state transactions, not international imports.5. Validity of the Circular Issued by the Commercial Taxes Department on 8.2.2001:The court gave significant weight to the Circular issued by the Commercial Taxes Department, which explicitly stated that registered dealers importing goods from outside the country were not required to furnish Form ST-18A. This Circular was deemed a binding interpretation by the department, clarifying the procedural requirements for such imports. The court held that this clarification applied retrospectively to the case at hand, as it was a procedural clarification rather than a substantive change in law.Conclusion:The court dismissed the revision petition filed by the Revenue, upholding the appellate authorities' decisions to set aside the penalty. The court concluded that the requirement of Form ST-18A did not extend to goods imported from outside the country, and the accompanying documents provided substantial compliance with the statutory provisions. The Circular issued by the Commercial Taxes Department further supported the assessee's position, and the Supreme Court's decision in Guljag Industries was not directly applicable to the facts of this case.