Quashed

A C T O v. M/S Mahaveer Enterprises

Rajasthan HC1 May 2017STR/250/2010

Case brief

AI extract

What is this about?

The High Court of Rajasthan upheld the penalty imposed on M/s. Mahaveer Enterprises for transporting mustard oil without necessary documents. The court held that reliance on an incomplete or unfilled declaration form was not valid protection against penalty, affirming the Assessing Officer's order and quashing the Appellate Authorities'improper dismissal.

What did the court decide?

The order of the Appellate Authorities was quashed, and the penalty imposed by the Assessing Officer under Section 78(5) was upheld.

A C T O Vs M/S Mahaveer Enterprises — Cheque Dishonour | Rajasthan HC (2017)

¶1

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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S.B. Sales Tax Revision / Reference No. 250 / 2010

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Assistant Commercial Taxes Officer, Ward-IIIrd, Hindaun City, Commercial Taxes, Karauli.

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----Petitioner

¶5

Versus

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M/s. Mahaveer Enterprises, ¾, Jagner.

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Rajasthan Tax Board, Ajmer.

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----Respondent

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_____________________________________________________ For Petitioner(s) : Ms. Meenal Ghiya Adv. For Respondent(s) : Mr. Anurag Kalawatia Adv.

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HON'BLE MR. JUSTICE JAINENDRA KUMAR RANKA

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Judgment

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01/05/2017

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Instant petition is directed against the order dt.20.09.2007 passed by the Rajasthan Tax Board, Ajmer (in short ‘the Tax Board’).

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The brief facts noticed are that on 22.10.1997 a vehicle bearing No. RJ-05G-1737 was intercepted by the Officer of the revenue department near Check-post at Bayana where the vehicle was found to be loaded with Mustard Oil. Though the driver/incharge of the vehicle did not produce any documents of carrying the goods and stated that the Mustard Oil was loaded from M/s. Kamal Oil Mills, Tonk and was to be transported to M/s. Mahesh Bansal, Jagner. In the vehicle, two persons namely; Mr. Pappu (Conductor) and Mr. Mahveer (Accountant) were also travelling and they also reiterated the facts that the goods were loaded from M/s. Kamal Oil Mills, Tonk and going to M/s. Mahesh Bansal, Jagner and they also admitted that they too did not have any documents with regard to the same. Accordingly, the Assessing Officer was satisfied that the goods were being transported by evading tax and accordingly notice u/Sec. 78(5) of the Act was issued and immediately thereafter within 1 hour

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(2 of 5)

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[STR-250/2010]

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Mr. Mahaveer (Accountant) again appeared before the Anti Evasion Authority and produced the Bill bearing No. 120 dt.21.10.1997 & Bilty No.448 dt. 21.10.1997 respectively of M/s. R.T. Industries, Tonk which was issued in favour of M/s. Mahveer Enterprises, Jagner amounting to Rs.3,40,913/-. A Bilty bearing No. 448 dt. 21.10.1997 of M/s. Mahesh Bansal, Jagner along with declaration Form bearing No.F/DD 3117702 issued by the Assessing Officer at Agra was produced. Noticing that there were discrepancies in the earlier statement given that the goods were purchased from M/s. Kamal Oil Mills, Tonk whereas bill was issued by M/s. R.T. Industries, Tonk. The Assessing Officer was satisfied that it is a case where penalty to be imposed and also the fact that so called declaration Form issued by the Authority at Agra was incomplete. Accordingly, penalty u/Sec. 78(5) of the Act was imposed.

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An appeal came to be filed before the Dy. Commissioner (A), who however took into consideration that the declaration Form referred to herein before was filed on a show cause notice within one hour and other documents were also made available on record held that the penalty is not leviable in the light of the judgment of the Larger Bench of the Tax Board in the case of ACTO, Vs. Bajrang Timber Mart, Ladnu, Nagaur (2006) 14 Tax Up-Date 10 and accordingly deleted the penalty.

¶19

The Revenue preferred an appeal before the Tax Board which was dismissed without going into the merits of the case only on relying upon the judgment of the Larger Bench of the Tax Board in the case of Bajrang Timber Mart, Nagaur (supra) .

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Learned counsel for the revenue contended that the order of the Appellate Authorities is perverse and requires consideration

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(3 of 5)

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[STR-250/2010]

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particularly in view of the fact that the judgment of the Larger Bench of the Tax Board in the case of Bajrang Timber Mart, Nagaur (supra) stands overruled by the judgment of the Apex Court in the case of Assistant Commercial Taxes Officer Vs. Bajaj Electricals Limited (2009) 1 SCC 308 and once the judgment relied upon by both the Appellate Authorities has been overruled, the petition otherwise is to be allowed.

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Counsel for the revenue further contended that it is a case where the assessee did not produce the declaration Form and was produced lateron but incomplete and not filled in, therefore, the judgment of the Apex Court in the case of Guljag Industries Vs. Commercial Taxes Officer (2007) 7 SCC 269 is applicable to the facts of the instant case and even Rule 53 mandates that a declaration Form complete in all respects, is required to be carried at all times. Counsel also placed on record the copy of the declaration form bearing No. F/DD 3117702 which was filed by the respondentassessee before the Assessing Officer and contended that the penalty is leviable and the order of the Assessing Officer deserves to be upheld.

¶25

On the last date of hearing, counsel for the respondent had placed on record the declaration form issued by the Assessing Authorities at Agra bearing No. No.F/DD 3117701 dt. 29.09.1997 which was duly filled in and counsel contended that since the said declaration Form had been produced on a show cause notice and other supporting documents namely; bill & bilty, the same could not have been disbelieved. The order of the Tax Board though for different reasons should be upheld. Counsel also contended that when the declaration Form has been produced lateron, the judgment

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(4 of 5)

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[STR-250/2010]

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of the Apex Court in the case of State of Rajasthan & Another Vs. D.P. Metals (2001) 124 STC 611 applies to the facts of the instant case. Since the counsel for the respondent had placed a declaration form which was duly filled in and copy of the same had been provided to the counsel for the revenue who pointed that there appears slight variation in the number and accordingly prayed time to produce records.

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On the next date of hearing, counsel for the revenue produced the records and today filed an application stating therein that the declaration Form produced by the counsel for the respondent in the Court was never filed by the respondent-assessee before the Assessing Officer and a completed Form now shown, is contrary to the material available on record and states that the form which has now been produced by the respondent is not available on record, the same deserves to be ignored and heavy cost deserves to be imposed on the respondent.

¶30

On noticing the above discrepancies, it was brought to the notice of the counsel for the respondent, who submits that it is an old case and on account of inadvertent mistake whatever form was produced by the assessee, he provided to the Court and in good faith and feels sorry in filing a wrong declaration form.

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I have considered the arguments advanced by the counsel for the parties and have perused the material available on record.

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In my view, the penalty is certainly to be upheld only for the reason leaving apart the other judgments relied upon by the counsel for the revenue which are squarely applicable but it is a case where the assessee can be prosecuted for placing reliance on a declaration Form which was not at all filed with the Assessing Officer who had

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(5 of 5)

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[STR-250/2010]

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taken on record the declaration From bearing No. F/DD 3117702 which is also placed before the Court, is certainly incomplete, not filled in and left blank except signature.

¶36

As noticed earlier, it is a case squarely covered by the judgment of the Apex Court in the case of Guljag Industries, Bajaj Electricals Limited (supra) & Judgment of this Court in M/s. M.J.R. Steels (Pvt) Limited Vs. The Assistant Commissioner Taxes Officer decided on 16.12.2016 in SB STR No. 578/2011 & M/s. Agrotech Foods Limited Vs. The Assistant commercial Taxes Officer decided on 15.09.2016 in SB STR No.189/2012 where repeatedly this Court has taken into consideration the identical declaration form being incomplete and held that penalty is required to be sustained in such cases. The Tax Board should have seen the declaration form and ought not to have blindly followed the counsel for the assessee.

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Accordingly, the order passed by both the Appellate Authorities being perverse stands quashed and set aside and the order of imposition of penalty passed by the Assessing Officer is upheld.

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(JAINENDRA KUMAR RANKA)J.

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S.Kumawat

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Jr. P.A.

A C T O v. M/S Mahaveer Enterprises

Case brief

What is this about?

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A C T O v. M/S Mahaveer Enterprises

Case brief

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