Assistant Commercial Taxes Officer, Flying Squad, Rajasthan-I vs Babu Lal

J.K. Ranka, J.—Both these revision petitions have been filed by the petitioner-assessing officer assailing the common order dated June 29, 2010 passed by the Rajasthan Tax Board (for short, "Tax Board") passed in Appeal Nos. 1733 of 2007 and 1730 of 2007 by which the Tax Board has upheld the order dated December 7, 2006 passed by the Deputy Commissioner (Appeals) (for short, "the DC(A)") by which the DC(A) has deleted the penalty levied by the petitioner-assessing officer on the respondent-assessee. Since the controversy involved is identical, both these revision petitions are being decided by this common order.

This petition was admitted vide order dated June 29, 2011 on the following questions of law:

(i) Whether, in the facts and circumstances of the case, the Rajasthan Tax Board was justified in law in deleting the penalty u/s 22A(7) of the Act of 1954 when there was violation of section 22A(3) of the Act?

(ii) Whether, in the facts and circumstances of the case, the Rajasthan Tax Board has not acted illegally and perversely in confirming the deletion of penalty u/s 22A(7) despite of the facts that there was violation of section 22A(3) of the Act and various discrepancies and irregularities were pointed out by the assessing officer in its order?

Brief facts of the case, as emerging on the face of record, are that the respondent-assessee was carrying goods in vehicle bearing No. DL.-14-1-G-5581 of Commercial Roadways Corporation which were being transmitted from Delhi to Gujarat and was intercepted at Shahpura check-post by the ACTO, Flying Squad. It was submitted by the respondent-assessee that the goods were not meant for the State of Rajasthan. Bills were produced, however, on the premise that all the bills were in the same handwriting, the petitioner-assessing officer apparently was of the view that the bills are bogus. Show-cause notice was issued and it was pleaded that proper and regular bills are there and that goods are not meant for Rajasthan but the petitioner-assessing officer was not satisfied and accordingly levied tax, penalty and interest amounting to Rs. 37,592 under the RST Act, 1954. The petitioner-assessing officer also imposed penalty of Rs. 12,076 under the proviso to section 22A(7) of the Act of 1954.

Both the penalties, as aforesaid, were challenged before the DC(A), who, after analysing the facts on record, allowed the appeal of the respondent-assessee and deleted the tax, interest and penalty in both the appeals, as aforesaid.

Dissatisfied with the order of the DC(A), two appeals were preferred before the Tax Board, who also, vide order dated June 29, 2010, approved the order of the DC(A) and dismissed the appeal of the petitioner-assessing officer. Hence these revision petitions by the petitioner-assessing officer.

Shri R.B. Mathur, learned counsel for the petitioner-assessing officer, submitted that there was violation of the provisions of section 22A(7) and the proviso to section 22A(7) of the Act of 1954. The bills and vouchers were not in order and the respondent-assessee admitted that he is not in a position to produce the consignee. He further submitted that the goods were meant for the State of Rajasthan and to be delivered in the State of Rajasthan but only to avoid the penalty or levy of tax penalty and interest, a claim was put forth that the goods were being sent from Delhi to Gujarat whereas no further evidence was led. He submitted that u/s 22A(7) of the Act of 1954, it was the duty of the respondent-assessee to prove that the goods were not meant for the State of Rajasthan were in transit actually and when there was an admission that the respondent is unable to produce the consignee, then nothing more was required to be proved by the petitioner-assessing officer. He justified the imposition of penalty and submitted that the Tax Board as well as DC(A) have gone wrong in deleting the same and pleaded for reversal of the order.

None appears on behalf of the respondent-assessee.

I have heard learned counsel for the petitioner-assessing officer and also perused the material available on record including the orders impugned.

In my view, the orders impugned are fair and reasonable and no interference is called for. Section 22A(3) and 22A(7) of the Rajasthan Sales Tax Act, 1954 provides as under:

22A. Establishment of check-post or barrier and inspection of goods while in transit.--(1) and (2) . . .

(3) The owner or person in-charge of a vehicle, boat or animal shall carry with him a goods vehicle record, a trip sheet or a log book as the case may be and such other documents as may be prescribed in respect of the goods carried in or in the vehicle, boat or animal as the case may be, and produce the same before any officer in-charge of check-post or barrier or any other officer as may be empowered by the Government in that behalf. The owner or person in-charge of a vehicle, boat or animal entering the State limits or leaving the States limits shall also give a declaration containing such particulars as may be prescribed of the goods carried in or on the vehicle, boat or animal, as the case may be, before the officer in-charge of the check-post or barrier or the officer empowered as aforesaid and give one copy of the declaration to such officer, and keep one copy with him.

(4) to (6) . . .

(7) (a) The officer in-charge of the check-post or barrier or any other officer not below the rank of an Assistant Commercial Taxes Officer, empowered in this behalf may, after giving the owner or person in-charge of the goods a reasonable opportunity of being heard and after holding such further enquiry as he may deem fit, impose on him for possession of goods not covered by goods vehicle record, and other documents prescribed under sub-section (3) or for submission of false declaration or documents a penalty not exceeding 30 per cent of the value of such goods, as may be determined by such officer:

Provided that where the goods are being carried without proper documents as required by sub-section (3) or with any false declaration or statements and the owner or the in-charge or the driver of the vehicle, boat, or animal carrying such goods is found in collusion for such carrying of goods, the vehicle, boat or animal shall also be seized by the officer empowered under sub-section (7), and such officer, after affording an opportunity of being heard to such owner, in-charge or driver may impose a penalty not exceeding 30 per cent of the value of the goods carried and shall release the vehicle, boat or animal on the payment of the said penalty or on furnishing such security in such form as prescribed under clause (b) of sub-section (7):

Provided further that when an owner, in-charge or driver of a vehicle, boat or animal is found guilty second time of the offence mentioned in the preceding proviso, he shall be liable to a maximum penalty as mentioned in the preceding proviso and the vehicle, boat or animal carrying the goods may be kept seized and detained for a period not exceeding 30 days after the date of the payment of the penalty or furnishing of the security.

(b) Such officer may release any of the goods seized under subsection (5) or sub-section (6) on payment of the penalty under clause (a) or on furnishing such security in such form as may be prescribed for the payment thereof, as he may consider necessary.

On perusal of the above, it is apparent that the owner or person in-charge of a vehicle has to have proper documentation and which on demand will necessarily have to be produced by the owner or person in-charge of the vehicle. In so far as the present facts are concerned, it bears out from the record that the respondent had all the documents and the documents, which were produced on the spot, clearly showed that the goods were being sent from Delhi and were intended to be sent to Gujarat and therefore, it is merely on assumption and presumption and only because of the bill and vouchers being in the same handwriting, it was alleged that the bills are bogus. Merely because bills and vouchers are in the same handwriting and if the goods are sent by the same firm in different names to be intended for different consignees, then certainly the handwriting on the bills and vouchers would be the same, therefore, merely because the handwriting was same, in my view, it cannot be a basis for imposition of levy of tax, penalty and interest. It has also been accepted by the two appellate authorities that the supporting material proved that the goods were not intended for the State of Rajasthan and there was no loss of revenue (tax) to the State when the goods were in transit from one State to another and the same was duly proved by the respondent-assessee even before the petitioner-assessing officer. Merely because at that particular point of time, the respondent-assessee was unable to produce the consignee, is no ground for imposition of penalty. Had there been any doubt, the petitioner-assessing officer was duty-bound to have verification from the consignor or consignee but no action was taken at all by the petitioner-assessing officer. It is also clear that not a single document was available so as to come to a conclusion that the goods were meant for being uploaded/sold within the State of Rajasthan, rather all the documents proved otherwise. On perusal of the records, it is also clear that the respondent-assessee submitted a reply on April 12, 1995 and wanted time for verification of consignor and consignee but without providing adequate time, the penalty was levied on April 12, 1995. Even otherwise, without providing adequate opportunity of hearing, the tax, penalty and interest was imposed and therefore, it is not justified and the Tax Board has correctly come to the conclusion that the entire penalty, tax and interest has been levied merely on conjectures and surmises without proving further by the petitioner-assessing officer. In my view, the Tax Board has come to a correct conclusion that there was no loss of revenue in so far as the State of Rajasthan is concerned and the provisions of section 22A(3) and section 22A(7) are applicable only in a case where there is prima facie evidence that there is loss of revenue. All the documents proved otherwise and since Rajasthan falls in between Delhi and Gujarat, which is proved by all the documents, in my view, the tax, penalty and penalty has rightly been deleted by the DC(A) and approved by the Tax Board. There is concurrent finding of fact by both the two appellate authorities that there is no loss of revenue and documents were proper. Accordingly, the question of law is answered in favour of the respondent-assessee and against the petitioner-assessing officer. Resultantly, both these revision petitions stand dismissed. No order as to costs.