Assistant Commercial Taxes Officer vs Tirupati Abhushan Bhandar

Jainendra Kumar Ranka, J.—This instant revision petition is directed against the order of the Rajasthan Tax Board dated January 15, 2009 in Appeal No. 1495 of 2006 by which penalty u/s 77(8) of the Rajasthan Sales Tax Act, 1994 was deleted. This petition was admitted on the following question of law on March 20, 2013:

(i) Whether, in the facts and circumstances of the case, the Rajasthan Tax Board was justified in law in deleting the penalty u/s 77(8) of the Act of 1994 when the assessee himself admitted that the goods are unaccounted and there was no procedural infirmity?

(ii) Whether, in the facts and circumstances of the case, the Rajasthan Tax Board was justified in law and has not acted perversely in deleting the penalty u/s 77(8) despite of admission of the assessee with regard to goods being unaccounted solely on the basis of version which is an after thought?

The brief facts as emerging on the face of record is that a survey was undertaken by the officers of the petitioner-Department at the business premises of the respondent-assessee on December 20, 2000, wherein the officers of the petitioner-Department found silver bar weighing 32.895 kilogram in a bag which was neither accounted for in the regular books of accounts nor the respondent-assessee was able to produce purchase bill/voucher relating to the aforesaid silver bar. Notice u/s 77(8) of the Rajasthan Sales Tax Act, 1994 was issued to the respondent on the same date for hearing on January 3, 2001 desiring the respondent to produce the supporting bills and vouchers or other acceptable evidence to prove the purchase of the aforesaid silver bar.

However, the respondent appeared before the assessing officer on the same date and admitted that the said silver bar is neither recorded/accounted for in the books of accounts nor bill is available. Sh. Rajendra Kumar Agarwal the proprietor also requested that an order may be passed today itself and further pleaded that he is ready to deposit the penalty and the goods may be released against payment of the penalty amount.

Finding no alternative and the admission by the respondent-proprietor Shri Rajendra Kumar Agarwal and his request in writing and clear-cut admission by the respondent-assessee, penalty at Rs. 28,750 was imposed. However, despite of clear admission, an appeal was filed before the Deputy Commissioner (Appeals) (in short, "the DC (A)") who after analysing the facts and circumstances sustained the penalty.

Dissatisfied with the said sustenance of the penalty, the respondent-assessee preferred an appeal before the Rajasthan Tax Board (in short, "the Tax Board"). The Tax Board, however, agreed with the submission made by the counsel for the respondent-assessee and deleted the penalty levied by the assessing officer by holding that the respondent has produced the necessary bill before the DC (A) and also books of account in which necessary entries were recorded and had produced photocopy of the cash book, the Tax Board, however, observed that merely because there was admission, therefore, only on this basis the penalty could not have been levied and accordingly deleted the penalty.

Hence, this revision petition.

Ms. Tanvi Sahai, learned counsel for the respondent-Department, submitted that the Tax Board, has taken an extreme view by deleting the penalty when even the assessee-respondent had clearly admitted that the said silver bar was not supported by any proper purchase bill nor the same was recorded in the books of accounts. She would further submit that what more was required from the assessing officer when sufficient time of more than two weeks was granted to the respondent but respondent insisted that penalty order be passed today itself, penalty be levied and he is ready and willing to pay the penalty and subject to payment of penalty the goods may be released. She further submitted that on the basis of this very admission, the respondent ought not to have filed even an appeal before the DC (A) when clear-cut violation was admitted by the respondent. She submitted that even appeal was not entertainable before the DC (A).

The learned counsel would further submit that there was no pressure or coercive measure and admission was voluntary. She submitted that the survey was conducted in December, 2000 and order of penalty was passed in December, 2000 and the appeal was decided on February 15, 2006 after almost a gap of more than five years and during this period of five years nothing was alleged by the respondent about pressure tactics or/and coercive measure adopted by the petitioner-Department or/authorized officer. She would further submit that the respondent procured bill later on and after thought which cannot legally sustain or stand the test of evidence and law, as any act done subsequent cannot be said to be full proof. Even entries were allegedly made later which is unjust as it was clearly admitted that no entry has been made in the regular books of account. She further submitted that the Tax Board was unjustified in merely accepting the claim of the respondent on the basis of mere assertion without any evidence, and only on the basis of the alleged photo copy of the cash book which apparently was produced before the DC (A). She would further submit that the Tax Board, exceeded its jurisdiction and came to a wrong finding when everything was admitted by the respondent-assessee. Accordingly, she pleaded that the penalty be sustained and the order of the Tax Board, be reversed.

None appeared on behalf of the respondent despite service of the notice.

I have heard the learned counsel for the petitioner-Department and have perused the material on record including the impugned order. At the outset, it would be fruitful to quote section 77(8):

Power of entry, inspection and seizure of accounts and goods:

(8) The assessing authority or the officer referred to in sub-section (6) may, after having given the dealer an opportunity of being heard and after having held such further enquiry as it may consider fit, impose on him, for the possession of goods not accounted for, whether seized or not under sub-section (6), a penalty equal to the amount of five times of the tax leviable on such goods or thirty per cent of the value of such goods, whichever is less; and such authority or officer may release the goods, if seized, on payment of the penalty imposed or on furnishing such security for the payment thereof as it may consider necessary.

On perusal of the facts, I am satisfied that the penalty has wrongly been deleted by the Tax Board, for the reason that (1) the books of accounts did not contain any entry of the said silver bar weighing 32.895 kilogram found in the custody and possession of the respondent, (2) it is not supported by any bill or evidence relating to the purchase of the said silver bar found in the custody and possession of the respondent at the time of survey, (3) despite adequate opportunity having being granted the respondent pleaded for imposing of penalty, payment of the penalty and release of the goods on the spot, (4) letter dated December 20, 2000 was also filed admitting that the said goods were purchased without bill and that no entry was made in the books of accounts.

Nothing was pleaded by the respondent during the intervening period of five years that is date of survey on December 20, 2000 and hearing of the appeal February 15, 2006 about any pressure tactics or coercive measure on the respondent. Had it been so then the necessary and proper course for the respondent-assessee was to immediately approach the higher administrative authority, namely, the Commissioner, Commercial Taxes, rather than sleeping over the matter for almost five years and putting a claim before the DC (A) about pressure tactics by the authorised officers at the time of survey.

The Tax Board, in my view, was unjustified in merely admitting the claim of the respondent which was put up first time before the DC (A) and in my view, it is an afterthought and ought not to have been plainly admitted and relied upon by the Tax Board. Tax Board is a final fact-finding authority and such a claim ought not to have been admitted merely on the basis of a simple claim.

It is also improper of the part of the Tax Board, to say that the DC (A) was unjustified in not accepting the claim of the respondent when the respondent produced photocopy of the cash book as an evidence before the DC (A). It is observed that the Tax Board deleted the penalty without appreciating the evidence on record rather there is no evidence at all by which penalty could be deleted and mere production of a photocopy of cash book or a purchase bill subsequently produced after several years cannot be considered to be sufficient compliance under the law.

On the perusal of the above facts it is quite apparent that on or before the date of survey with regard to the silver bar weighing 32.895 kilogram the respondent did not have any proper bill or voucher or any other evidence. Rather it was claimed and admitted that they do not have any document relating to silver bar and even there was no entry in the books of accounts, rather the respondent admitted imposition of penalty and even payment of the penalty on the spot. In my view, on these finding no other factor was required to be considered by the Tax Board.

However, if otherwise even when adequate opportunity was granted and which was not availed of by the respondent then nothing further was required to be looked into by the assessing officer and, in my view, the penalty was rightly imposed by the assessing officer, rightly sustained by the DC (A) and wrongly deleted by the Tax Board, and in my view, the order of the Tax Board, deserves to be reversed. Accordingly, the order of the Tax Board, is reversed and that of the assessing officer is sustained.

Consequently the question of law is answered against the assessee and in favour of the petitioner-Department. No costs.