2016 (12) TMI 256 - HC - VAT and Sales Tax

High Court upholds penalty under RST Act for ST-18A violation, emphasizing legal precedents

The High Court upheld the penalty imposed by the Assessing Officer under section 78(5) of the RST Act for a violation related to a blank declaration form ... Imposition of penalty u/s 78(5) - incomplete declaration form - Held that: - there is a finding of fact recorded by all the three Authorities that the declaration form ST-18A was found blank in all respect, not filled-in and, therefore, the mandate of R.53 of the Act to carry a declaration form filled-in, in all respect has not been complied with and, therefore, the AO was well justified in coming to the said conclusion of imposing the penalty - the judgments of Guljag Industries v. CTO [2007 (8) TMI 344 - SUPREME Court] is squarely applicable on the facts of instant case where it was held that Section 78(5) of the RST Act 1994 (section 22A(7)(a) of the RST Act, 1954) is the section enacted to provide remedy for loss of revenue and it is not enacted to punish the offender for committing economic offence and, therefore, mens rea is not an essential ingredient for contravention of section 78(2) of the RST Act 1994. That, the breach of section 78(2) would attract the levy of penalty under section 78(5) in cases where the goods in movement have travelled with an incomplete Form No. 18A/18C. Penalty rightly imposed - petition dismissed - decided against petitioner. Issues:1. Imposition of penalty under section 78(5) for violation of R.53 of the RST Act due to a blank declaration form ST-18A.2. Consideration of prior judgments by the Tax Board and the apex court in similar cases.3. Assessment of whether the penalty imposed was justified based on the facts and legal provisions.Analysis:1. The case involved the imposition of a penalty under section 78(5) of the RST Act for a violation related to a blank declaration form ST-18A. The Assessing Officer (AO) imposed the penalty based on the blank declaration form found during an inspection of a vehicle carrying goods. The petitioner argued that since all necessary particulars were available in other documents, there was no need for the declaration form to be filled. However, the AO found the violation to be significant and imposed the penalty as per the provisions of R.53 of the RST Act.2. The matter was taken to the Dy. Commissioner (Appeals) and then to the Tax Board. Both authorities considered prior judgments, including one by a Larger Bench of the Tax Board in a similar case, where it was held that penalties were not imposable in certain situations. The petitioner contended that the penalties were not justified based on the facts of the case and the intention behind carrying the goods. The Revenue argued that the violation of R.53 was clear, and the penalty was rightly imposed.3. The High Court analyzed the arguments presented by both parties and reviewed the orders of the lower authorities. The Court found that the declaration form ST-18A was indeed blank, leading to a non-compliance with the requirements of R.53. The Court also noted that prior judgments, such as Guljag Industries v. CTO and ACTO v. Indian Oil Corporation Ltd., supported the imposition of penalties in cases where such violations occurred. The Court further highlighted that the Tax Board's reliance on a previous Larger Bench decision was overturned by the apex court in a different case, strengthening the argument for upholding the penalty imposed by the AO.In conclusion, the High Court reversed the order of the Tax Board, upheld the penalty imposed by the AO, and found that the issue was adequately covered by relevant legal precedents, leading to the success of the petitioner's appeal.