2017 (1) TMI 129 - HC - VAT and Sales Tax

Court upholds Tax Board decision reversing penalty under section 22-A(7) Act. Discrepancy in receipt not penalizable.

ACTO, Flying Squad-I, Zone-I, Jaipur Versus Soni Paper Cones, Jaipur

The court upheld the Tax Board's decision to reverse the penalty imposed by the Assessing Officer under section 22-A(7) of the Act. The court found that ... Imposition of penalty u/s 22-A(7) of the Act - mis-declaration of weight of goods - material difference in the chungi receipt vis a vis actual weight - Held that: - when there is a specific finding by the Tax Board that the bill which was found contained narration of 5.825 mt ton as well as Excise Gate Pass which showed the same quantity, in my view, merely because the driver tried to avoid actual payment of chungi at the checkpost, cannot be a reason to hold the assessee liable for penalty - petition dismissed - decided in favor of assessee. Issues:1. Imposition of penalty under section 22-A(7) of the Act based on material difference in chungi receipt and actual quantity of goods found.2. Validity of Tax Board's decision to reverse penalty imposed by Assessing Officer.Analysis:Issue 1: The case involved a petition challenging an order passed by the Rajasthan Tax Board, where the appeal filed by the assessee was accepted. The matter stemmed from a discrepancy discovered during an interception of a vehicle carrying goods. The driver produced documents indicating a lower quantity of goods compared to the actual weight found upon physical verification. Consequently, the Assessing Officer imposed a penalty under section 22-A(7) of the Act for evasion of tax. The Dy. Commissioner (Appeals) upheld the penalty, but the Tax Board reversed the decision, leading to the present challenge.Issue 2: The petitioner argued that the material difference in the chungi receipt and actual quantity was clear evidence of tax evasion, justifying the penalty imposed by the Assessing Officer. On the other hand, the respondent contended that the driver possessed documents supporting the higher quantity, and avoiding chungi payment was not sufficient grounds for penalty. The court analyzed the arguments and upheld the Tax Board's decision, emphasizing that the bill and Excise Gate Pass indicated the higher quantity, and the driver's actions did not warrant penalizing the assessee. The court found no perversity or illegality in the Tax Board's order, leading to the dismissal of the petition for lacking merit.