2014 (4) TMI 916 - HC - VAT and Sales Tax

High Court affirms penalty for non-compliance with ST-18A form, stresses statutory adherence

The High Court upheld the penalty imposed on the respondent-assessee for non-compliance with carrying the necessary declaration form ST-18A, emphasizing ... Whether the Appellate Authority can interfere in the order passed by the Assessing Authority that the penalty imposed is excessive, whether such view is sustainable in view of Section 78(5) of the RST Act - Held that:- Judgment in Guljag Industries Versus COMMERCIAL TAXES OFFICER [2007 (8) TMI 344 - SUPREME Court] followed - The compliance of the provisions of the Act, have to be carried in letter and spirit and when there is requirement of carrying declaration form with the goods then the mere plea that the respondent was not aware of the fact of Notification, is not proper such a generalised user of word “were not aware” is not sufficient - compliance of Rule 53 ought to have been made - The Rice falls in the category of notified goods thus there was requirement of carrying declaration form with the goods - The dealers ought to have carried the declaration form with the goods and came heavily on the dealers who though carried the declaration form but were blank or/and incomplete - Such declaration forms were non-est and Department was correct and justified in imposing penalty u/s. 78(5), whereas it is a non carrying of the declaration form - If declaration form is produced later on, on demand then plea of the assessee could be accepted but neither there was a request by the respondent-assessee nor he produced the declaration form - The revision petition is allowed - The impugned orders passed by the lower Appellate Authorities are quashed and set-aside and reversed - The order of imposition of penalty passed by the ACTO (FS), is maintained - The stay application also stands disposed of – Decided in favour of Revenue. Issues:1. Admissibility of Sales Tax Revision Petition under section 86 of the Rajasthan Sales Tax Act, 1994.2. Validity of penalty imposed under Section 78(5) of the Act for non-compliance with carrying declaration form.3. Interpretation of provisions by Appellate Authorities and Tax Board.4. Justification of penalty imposition and interference by Appellate Authority.Issue 1:The Sales Tax Revision Petition was filed by the petitioner-department against the order of the Rajasthan Tax Board, challenging the rejection of the appeal filed by the petitioner-department regarding the penalty imposed by the ACTO under Section 78(5) of the Act. The revision petition was admitted by the High Court, and substantial questions of law were framed for consideration.Issue 2:The penalty was imposed on the respondent-assessee for carrying 256 bags of rice without the required declaration form ST-18A. The DC(A) and the Tax Board deleted the penalty, citing no intention of tax evasion by the respondent-assessee. The High Court, after considering the arguments, held that compliance with the Act's provisions is mandatory, especially regarding carrying the necessary declaration form with the goods. The Court referred to the judgment in Guljag Industries case, emphasizing the importance of fulfilling compliance requirements.Issue 3:The High Court analyzed the interpretation of provisions by the Appellate Authorities and the Tax Board. It noted that the lower Appellate Authorities had deleted the penalty without proper consideration of the facts. The Court emphasized the need for strict compliance with the law, as highlighted in the Guljag Industries case, and overturned the decisions of the DC(A) and the Tax Board.Issue 4:The High Court addressed the justification of penalty imposition and the interference by the Appellate Authority. It emphasized that the mere lack of awareness of the notification requiring the declaration form was not a valid defense. The Court distinguished the present case from the D.P. Metals case relied upon by the Tax Board and DC(A), stating that the circumstances were different. Ultimately, the High Court allowed the revision petition, quashed the lower Appellate Authorities' orders, and maintained the penalty imposed by the ACTO.In conclusion, the High Court ruled in favor of the petitioner department, upholding the penalty imposed for non-compliance with carrying the necessary declaration form and emphasizing the importance of strict adherence to statutory provisions.