Assistant Commercial Taxes Officer, Flying Squad, Commercial Taxes vs National Engineering Industries Ltd.

Jainendra Kumar Ranka, J.—The instant revision petition has been filed by the petitioner-Department, u/s 86 of the Rajasthan Sales Tax Act, 1994 (in short, "the Act") against the order dated June 18, 2004 passed by the Rajasthan Tax Board, Ajmer (in short, "the Board") in Appeal No. 94 of 2004, dismissing the appeal preferred by the petitioner-Department and upholding the order of the learned Deputy Commissioner (Appeals) (for short, "the DC(A)") whereby the DC(A) deleted the penalty amounting to Rs. 1,04,317 imposed u/s 78(5) of the Act by setting aside the order passed by the learned assessing officer (in short, "the AO"). The said appeal was admitted on the following substantial question of law:

Whether, in the facts and circumstances of the case, the submission of ST-18A declaration form filled in, in the ink, at the time of checking is mandatory under rule 53 of the Rajasthan Sales Tax Rules, read with section 78(2) of the RST Act, 1994 and whether incomplete submission of ST-18A declaration form attracts penalty on the price of the goods u/s 78(4) of the RST Act, 1994?

The brief facts of the case as emerging on the face of record is that on September 30, 1999, a vehicle No. MP-14B/9813 was checked at Badgaon, Kota by Flying Squad, Kota. The vehicle contained GR No. 16408 dated September 28, 1999, the consignor of the goods was Indian Seamless Steels and Alloys Ltd. Jijuri, Pune, whereas the respondent, namely, M/s. National Engineering Industries Ltd., Khatipura Road, Jaipur was the consignee. The goods, inter alia, contained 258 round bar weighing 14.062 tons with bill No. 5428 dated September 26, 1999, weighing 14.060 tons of a value of Rs. 3,47,721 along with these papers, declaration form ST-18A 10011/12 was also found in which it was found that the name and address of sender as well as the name and address of transporter were not stated and therefore according to the petitioner-Department, it was treated as incomplete. It has further been observed that as per notification dated March 26, 1999, in declaration from ST-18A, all columns should be completely filled in otherwise it can be reused. Accordingly, notice in the instant case was issued u/s 78(2) of the said Act read with rule 53 of the Sales Tax Rules as to why the penalty u/s 78(5) may not be levied on the respondent.

The counsel for the respondent appeared before the petitioner and stated along with reply reiterating the facts and further submitted that all necessary bills and vouchers were duly available with the driver, however on account of inadvertence only two columns remained to be filled in, as such these columns were immaterial. The respondent further pleaded that both the consignor as well as the consignee are reputed industries and will not indulge in such kind of activities particularly when all other columns were filled in and other relevant documents were found. However, the petitioner was not satisfied with the explanation so filed by the respondent observing that the declaration form ST-18A has its own sanctity and there were instances of re-using the same and since the respondent was not able to prove by acceptable evidence as to why the material columns could not be filled in, therefore by rejecting the explanation the penalty at 30 per cent amounting to Rs. 1,04,317 was levied on the total value as per the bills amounting to Rs. 3,47,721.

Dissatisfied with the imposition of the penalty so imposed, the respondent preferred an appeal before the Deputy Commissioner (Appeals). Detailed explanation was submitted by the respondent and it was pleaded that on account of clerical error, only two columns remained to be filled in and that when all other columns have been found to be in order, and bills have been found to be neither fabricated nor forged and such bills have been found to be genuine, therefore, merely because only two columns were not filled in, the penalty ought not to have been imposed. The DC(A) being satisfied with the explanation furnished by the respondent, deleted the penalty vide order dated August 16, 2003.

Dissatisfied with the deletion of penalty, the petitioner preferred an appeal before the Tax Board. The Tax Board also vide order dated June 18, 2004 while agreeing with the finding of the DC(A), dismissed the appeal preferred by the petitioner. Hence this revision petition.

Ms. Tanvi Sahay, counsel for the petitioner-Department, submitted that leaving the columns blank in declaration form 18A was unjust on the part of the respondent, she submitted that as per the Notification dated March 26, 1999, the declaration form should have been completely filled in by the respondent as there were chances of re-using the same form to avoid sales tax liability. It is only on account of checking by the officers of the petitioner-Department, this factum has come to the notice otherwise the same form could have been re-used again and again. She further submitted that judgment of the honourable apex court in the case of Guljag Industries Vs. Commercial Taxes Officer, is squarely applicable to the facts of the instant case. It has been observed by the honourable apex court that carrying of incomplete form is not proper and penalty in a case like this could be levied she further submitted that several instances had been noticed by the Commercial Taxes Department that though the vehicles were carrying declaration form but they were blank or incomplete and were liable to be re-used therefore the notification dated March 26, 1999 was brought on record, she further submitted that rule 53 mandatorily requires that all columns of the form have to be completely filled in and therefore the order of Tax Board is unjust and penalty deserves to be sustained.

Mr. R.C. Shah, counsel for the respondent, submitted that though there is requirement of the declaration form being completely filled in but it has to be seen as to whether the columns which were left blank on account of inadvertence in the present case had material bearing or not. He submitted that the vehicle contained necessary bills and vouchers and the petitioner has not uttered anything adverse as to whether the bills have been found to be forged or ingenuine, rather when nothing has been commented on such bills it has to be admitted that the goods were purchased through proper bills and vouchers. He further submitted that on account of inadvertence only two columns remained to be filled in. He further submitted that both are limited companies and will not indulge in such kind of activities. He further submitted that the transaction was inter-State sale against C form, both the seller and buyer are registered dealers and the goods were excisable, information relating to excise, income tax Pan number, etc., were on record and even in the invoice found in the vehicle. He further submitted that the judgment of the apex court in the case of Guljag Industries Vs. Commercial Taxes Officer, relied upon by the counsel for the petitioner is distinguishable inasmuch as even the honourable apex court has observed that material facts, namely, quality, weight description, value of the goods and invoice number ought to have been mentioned whereas in the present case, all these have been found to be duly filled in. He submitted that only name and address of seller and transporter company was not filled otherwise everything is filled in. He drew attention of the court on the declaration form ST-18A and submitted that in form ST-18A, if the value of the goods, invoice number challan and other particulars are filled in, then therefore by no stretch of imagination, the said form can be said to be re-usable. He submitted that the penalty has rightly been deleted. He further submitted that it is basically a finding of fact as both the appellate authorities, namely, Tax Board and DC(A) have deleted the penalty and no question of law is found to be involved. He also relied upon the judgments of this court in the case of ACTO. FS-I. Jaipur v. Indian Oil Corp. Ltd. 2006 15 Tax Up Date 207, case of CTO, Dungarpur v. Hindustan Petroleum Corporation Ltd. 2011 16 VAT Reporter 29, also the case of CTO, AE, Udaipur v. Viral Filaments Ltd. Jaipur 2010 13 VAT Reporter 163 and also the case of A.C.T.O., Flying Squad Vs. Derby Textile Pvt. Ltd., and submitted that in a case like this, no penalty could be levied in the alternative, he also submitted that this issue has not been considered by any of the authorities below in the light of the judgment of Guljag Industries Vs. Commercial Taxes Officer, Therefore, in the light of order of this court in the case of ACTO, Anti Evasion-I, Jodhpur v. Hari Om Company reported in [2011] 30 Tax Update 285 and CTO (Check-post) Shahjahanpur v. Jain Tubes, Jaipur reported in [2011] 30 Tax Update 125 the matter may be remanded to consider declaration form in the light of granting fresh opportunity in the light of the judgment of the apex court in the case of Guljag Industries Vs. Commercial Taxes Officer, and State of Rajasthan and Another Vs. M/s D.P. Metals,

I have considered the submissions advanced by counsel for the parties and perused the material available on record as also the judgments relied upon by counsel for the parties. After having gone through the judgments of the honourable apex court as also the judgment of this court in Hari Om Company [2011] 30 Tax Update 285 and in the light of judgment of the apex court in the case of Guljag Industries Vs. Commercial Taxes Officer, which came to be decided later by the apex court and during the pendency of this revision petition before this court, therefore the law with regard to section 78(5) of the Act cannot be clearly spelt out during the period in which these appellate authorities passed their orders in favour of the assessee while these issues have been decided by the honourable apex court in favour of the Revenue now. However the fact remains that the principles of natural justice are yet to be complied with, may be, notices were sent but now needs reconsideration in the light of the apex court''s judgment. On the other hand, the honourable apex court has left it open for the assessing authority to meet such compliance with the principles of natural justice. Therefore, this court is of the opinion that the assessee deserves to be granted fresh opportunity of hearing and specific show-cause notice with the nature of defect(s) and deficiencies in compliance with the provisions of section 78(2) of the Act. This court also in the case of ACTO, Anti Evasion-I, Jodhpur v. Hari Om Company [2011] 30 Tax Update 285 while remanding observed as under:

Therefore this court is of the opinion that the assessee(s) deserve fresh opportunity of hearing and specific show-cause notice with the nature of defect(s) and deficiencies in compliance with the provisions of section 78(2) of the Act and it is only thereafter that the penalty proceedings deserve to be decided afresh by the assessing authority dealing with all the contentions of the assessee and depending upon the compliance made by them in such compliance with the principle of natural justice.

Consequently, these revision petitions of the Revenue are partly allowed and all the order passed by the three authorities below, namely, the Tax Board, Deputy Commissioner (Appeals) as well as assessing authority are set aside and the matter is restored back to the assessing authority for deciding the penalty proceedings de novo. Since considerable time has already been passed, therefore, it is expected that the assessing authority will pass such fresh orders after giving opportunity of hearing to the assessee(s) as aforesaid, within a period of six months from today. No costs.

Accordingly, this revision petition is disposed of by setting aside the orders passed by all the three authorities below and the matter is remanded back to the assessing authority for deciding the issue afresh as stated above in the light of the aforesaid decisions of this court as well as the decision of the apex court. Needless to mention here that ample opportunity would be granted to the respondent by the assessing officer but would decide the issue within a period of six months from today. No costs.