Assistant Commercial Taxes Officer, Alwar vs M/s. Rathi Bars Limited, Bhiwadi

Jainendra Kumar Ranka, J.—This revision petition has been filed by the petitioner department, u/s 84 of the Rajasthan Value Added Tax Act, 2003 (In short ''The Act'') against the order dated 10.1.2011 passed by the Rajasthan Tax Board, Ajmer (in short ''The Board'') in Appeal No. 833/2007, by which the appeal of the appellant had been rejected by upholding the order dated 30.8.2006 passed by the learned Deputy Commissioner (Appeals), Bharatpur, (in short ''The DC (A), who had deleted the levy of penalty of Rs. 66,067/- imposed by the learned Assistant Commercial Taxes Officer, Alwar, (in short ''The ACTO''), u/s 78(5) of the said Act. The brief facts of the case as emerging on record is that the respondent had sent certain goods through a transport vehicle bearing No. RJ. 02G-6044 from Khushkheda to Haryana, containing therein iron rods. On checking conducted on 22.09.2004 by ACTO (AE) the driver of the vehicle was found with the invoice issued by the respondent bearing No. 1703 dated 22.09.2004, builty No. 1788 dated 22.09.2004, issued by Chouhan Transport Company, Machiheda, District, Alwar, ST-38 No. 3379152 the declaration form issued by Govt. of Haryana, However, with the aforesaid document/paper, Form No. ST-18C which was mandatory as per the Rajasthan Sales Tax Act and Rules, (in short ''The Rules'') was not produced. Accordingly, the ACTO (AE), held that the respondent has contravened the provisions of Section 78(2)(a) of the Act read with Rule 54 of the Rules, the vehicle containing goods was detained. Notice was issued and served upon the driver of the vehicle on the spot. On the date of hearing, the Manager of the Transport Company, appeared and requested for release of the vehicle and it was pleaded that the driver of the vehicle was having required proper bills, builty, vouchers and declaration form No. ST-38 of the Government of Haryana as well as Form No. ST-18C. It was further pleaded that the driver of the vehicle was illiterate person and in haste Form No. ST-18C, fell down in the cabin of the vehicle as a result of which, the form could not be located at the time of checking on the spot. Before ACTO (AE), along with reply, Form No. ST-18C bearing No. 0757278 was produced and it was claimed that the said form was found in the cabin of the vehicle after thorough search made by them. Accordingly, he made a request for release of the vehicle and for non imposing of penalty however, learned ACTO (AE), though, admitted that the driver of the vehicle was having required documents with him on the spot, except Form No. 18-C, dis-believed the story and rejected the request of the respondent. It was observed by the Assessing Officer that it is incumbent upon the assessee to carry the Form No. ST-18C which is mandatory while carrying the goods from one place to other place and since, most important document was not available with the driver of the vehicle, it was done with the intention of evasion of tax and held that the act of the respondent was with the intention of tax evasion and accordingly imposed penalty of Rs. 66,067/- against the respondent u/s 78(5)(a) of the Act, being 30% of the value of the goods which was claimed to be at Rs. 2,20,224/-.

Aggrieved by the said order of imposition of penalty, the respondent preferred an appeal before the learned DC (A), Bharatpur and re-iterated the facts pleaded before the Assessing Officer. The documents which were produced before the ACTO (AE), were again produced before the DC (A) and contended that the driver of the vehicle was having all required documents, like builty, vouchers and even declaration form issued by the Government of Haryana except Form No. ST-18C which could not be produced on account of mistake of driver of the vehicle as the same fell down in the cabin of the vehicle in haste and only on account of this factum, the correct claim had been ignored by the Assessing Officer. The DC (A) after recording his finding of fact came to the conclusion that the driver of the vehicle was having all required documents except Form No. ST-18C and the declaration Form ST-38 issued by the Government of Haryana, was also part of the documents, in any case, immediately, on demand, Form No. ST-18C was submitted therefore, there is no justification for imposing the penalty as the tax had not been evaded by the respondent. Even otherwise, goods were not sold and was only transmitted from one State to another. The DC(A), being satisfied with the explanation given by the respondent, deleted the penalty.

Aggrieved by the order passed by the learned DC(A), the ACTO (AE) preferred appeal before the Tax Board. The Board vide order dated 10.1.2011 after detailed discussions, accepted the facts narrated by the DC (A) in his order and came to the conclusion that when other required documents were available with the driver including the declaration Form No. ST38 issued by the Government of Haryana, and that Form ST18C was immediately, produced on demand, the Tax Board was satisfied that the DC (A) had rightly deleted the penalty imposed by the Assessing Officer and upheld the order passed by the DC (A). The Board also relied upon the Judgment rendered by the Hon''ble Apex Court in the Case of State of Rajasthan and Another Vs. M/s D.P. Metals,

Being aggrieved by the order passed by the Board, the instant revision petition has been filed by the petitioner-department.

Ms. Tanvi Sahay, appearing on behalf of Mr. R.B. Mathur, learned counsel for the petitioner department has submitted that requirement of Form ST-18C is mandatory under the law for carrying the goods through a transport vehicle and it is very significant document. She further submitted that though other relevant papers/documents were available with the driver but the most important document i.e. Form ST-18C was not made available, therefore, the learned ACTO was justified in imposing the penalty upon the respondent. She further submitted that requirement of the document under the Act, being primary, it needed to be fulfilled and since, the respondent had failed in making compliance of the requirement of carrying of the Form No. ST-18C under the Act, therefore, the penalty had rightly been imposed against the respondent and the respondent has wrongly been exonerated from the penalty so imposed by the DC(A) and the Tax Board.

I have considered the arguments advanced by the learned counsel appearing on behalf of the petitioner department and perused the material on record. I am in agreement with the order passed by the learned DC(A) and the learned Tax Board, for the reasons given in the order hereunder. Though the Act, provides that Form No. ST-18C is very essential to be produced at the time of checking or otherwise at the time of carrying of the goods in a vehicle but in the instant case all other relevant papers/documents like bills, vouchers and even declaration Form ST-38 issued by the Government of Haryana, were available with the driver of the vehicle at the time of checking. It was claimed that even Form ST-18C was with the driver but the same fell down in the cabin in haste and he being illiterate was not able to locate the same immediately and therefore, the same could not be produced at the time of checking. In the alternate it was pleaded that the respondent was prevented by good, sufficient and reasonable causes in not making available the Form ST-18C and there was no mala-fide intention on the part of the respondent for evading the tax or otherwise, or to defraud the revenue when all other documents were available and even Form ST-18C was submitted immediately on demand.

Hon''ble Apex Court in the Case of D.P. Metals, (Supra), had an occasion to consider identical issue and came to the conclusion that though provision of Section 78(5) of the Act, is valid but simultaneously, held that if by mistake or inadvertence the form was not readily available at the time of checking and on demand the same was produced, therefore, in the circumstances of the case, the penalty ought not to be imposed and ultimately held as under:-

Such submission of false or forged documents or declaration at the check-post or even thereafter can safely be presumed to have been motivated by desire to mislead the authorities. Hiding the truth and tendering falsehood would per se show existence of mens rea, even if required. Similarly where, despite opportunity having been granted u/s 78(5) if the requisite documents referred to in sub-clause 2(a) are not produced, even though the same should exist, would clearly prove the guilty intent. It is not possible to agree with the counsel for the respondents that breach referred to in Section 78(5) can be regarded as technical or venial. Once the ingredients of Section 78(5) are established, after giving a hearing and complying with the principles of natural justice, there is no discretion not to levy or levy lesser amount of penalty. If by mistake some of the documents are not readily available at the time of checking, principles of natural justice may require some opportunity being given to produce the same. This provision cannot be read as to imply that the penalty of 30% is the maximum and lesser penalty can be levied. The legislature thought it fit to specify a fixed rate of penalty and not give any discretion in lowering the rate of penalty. The penalty so fixed is meant to be a deterrent and we do not see anything wrong in this. The quantum of penalty under the circumstances enumerated in Section 78(5) cannot, in our opinion, be regarded as illegal. The legislature in its wisdom has thought it appropriate to fix it at 30% of the value of goods and it had the competence to so fix. As held by this Court in Rai Ramakrishna & Others vs. The State of Bihar at 910; The objects to be taxed so long as they happen to be within the legislative competence of the legislature can be taxed by the legislature according to the exigencies of its needs, because there can be no doubt that the State is entitled to raise revenue by taxation. The quantum of tax levied by the taxing statute, the conditions subject to which it is levied, the manner in which it is sought to be recovered, are all matters within the competence of the legislature, and in dealing with the contention raised by a citizen that the taxing statute contravenes Art. 19, courts would naturally be circumspect and cautious as such there cannot, in the present case, be any valid challenge to the rate of penalty provided for in Section 78(5) of the Act.

It is very clear that though the provisions of Section 78(5) of the Act, have been held to be just, proper and valid but it is not automatic, the principles of natural justice, demand an opportunity to be given to rebut and if the declaration form is produced on demand then the benefit of producing the documents/form ought to have been given to the assessee and no penalty should have been imposed. Therefore, the aforesaid Judgment of the Hon''ble Apex Court is squarely applicable in the facts and circumstances of the present case.

This Court in the Case of M/s. Cera Tech India Vs. Asstt. Commercial Taxes Officer, Bhiwadi, 2013 Tax-Up-Date (35) Part 2, 49, considered this issue and held as under:-

The Hon''ble Supreme Court of India in case of D.P. Metals (supra) has categorically held that on show cause notice with regard to alleged contravention/deficiency found in respect of goods in transit, if the deficiency/contravention is removed, with the filing of the requisite document by the assessee imposition of penalty ought to be eschewed. In the instant case it is not in dispute that form VAT 47 was furnished to ACTO, who checked the vehicle with the reply to show cause notice on the very same day. That being the position, there is no escape from the inevitable conclusion that the petitioner assessee could not have been found in contravention of Section 76(2)(b) of the RVAT Act. Other documents such as invoice and transport receipt were also by themselves indicative of the bonafides of the transit of goods. Following the judgment in case of D.P. Metals (supra), I am of the considered view that at the first instance on the very same day the petitioner assessee having furnished Form VAT 47 to ACTO, and the petitioner could not have been found to be in contravention of Section 76(2)(b) of the RVAT Act or visited with penalty u/s 76(6) of the RVAT Act. The Board has misdirected itself in overlooking the aforesaid admitted facts and instead focusing on the alleged improbability of VAT Form 47 being lodged in the dash-board of the vehicle in transit.

Consequently, the revision petition is allowed. The impugned order dated 29-6-2012 passed by the Rajasthan Tax Board Ajmer is quashed and set aside.

Learned counsel for the petitioner has placed reliance on the Judgment rendered in the Case of Assistant Commercial Taxes Officer, Ward IV, Circle B, Udaipur, Vs. Raja Glass House, (1989) 75 (Raj) STC 417 and submitted that the facts of the present case are identical to the facts of the said case.

On perusal of the aforesaid Judgment, I notice that the facts are totally distinguishable to that of the present case and not identical in much as in the Case of Raja Glass House,(Supra), even the dealer had admitted before the Assessing Officer (ACTO) that the goods were not accounted in the books and tax was not paid therefore, in that case there was admission whereas the facts in the present case is contrary to that case as all the papers were made available except Form No. ST-18C at the time of checking and Form ST-18C was made available immediately on demand.

I am satisfied that the order passed by the Tax Board, Ajmer is quite justified and the Board had rightly affirmed the order and there is no perversity in the order of Tax Board, whereby the penalty deleted by the Dy. Commissioner (Appeals), against the respondent was sustained.

Resultantly, the Revision petition filed by the petitioner has no force and the same is dismissed. The stay application is also accordingly dismissed.