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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
Pankaj Bhandari, Anoop Kumar Dhand, JJ.
Assistant Commissioner, Commercial Taxes – Appellant
Versus
M/s C.P. Agro Industries, Roopwas, Bharatpur, Rajasthan. – Respondent
D.B. Sales Tax (Vat) Revision Petition No. 315 of 2017
Decided On : 14-02-2022
Penalty - Rajasthan Value Added Tax Act, 2003 - Section 61 - Summary of Acts and Sections: Section 61 of the RVAT Act, 2003 - The court discussed the provisions of Section 61 of the RVAT Act, 2003, which allows for the levy of penalty in cases of active concealment and deliberate fraud or misinformation by the Assessee.
Fact of the Case:
The petitioner, an Assistant Commissioner, challenged the order of the Rajasthan Tax Board setting aside the penalty imposed under Section 61 of the RVAT Act, 2003, on the respondent-assessee for selling mustard oil against fake and forged declaration Form-C.
Finding of the Court:
The court found that the Tax Board erred in setting aside the penalty despite the fact that the Forms-C submitted by the Assessee were found to be fake and forged, and the Assessee had concealed transactions to avoid tax.
Issues: The main issue was whether the Tax Board committed an error of law in setting aside the penalty imposed under Section 61 of the RVAT Act, 2003, despite the Assessee's submission of fake and forged Forms-C and concealment of transactions.
Ratio Decidendi: The court held that the penalty was rightly imposed as the Assessee furnished inaccurate particulars and concealed transactions to avoid tax, as per the provisions of Section 61 of the RVAT Act, 2003.
Final Decision: The court allowed the Sales Tax (VAT) revision petition, quashed the order of the Rajasthan Tax Board, and upheld the imposition of penalty on the Assessee.
High Court of Judicature for Rajasthan (Bench at Jaipur), D.B. Sales Tax (VAT) Revision Petition No. 315 of 2017, decided on 14.02.2022 by Justices Pankaj Bhandari and Anoop Kumar Dhand. (!) (!)
Section 61 of the Rajasthan Value Added Tax Act, 2003 (RVAT Act) permits imposition of penalty equal to two times the tax avoided or evaded in cases of (i) concealment of particulars in returns; (ii) deliberate furnishing of inaccurate particulars; or (iii) concealment of sales/purchase transactions from accounts, registers, or documents. These require active concealment, deliberate fraud, or misinformation by the assessee. [17000640770015] (!) (!) (!)
Whether Tax Board erred in setting aside penalty under Section 61 RVAT Act despite fake/forged Forms-C and upheld tax/interest, indicating concealment and inaccurate particulars. [17000640770001] (!)
Revision petition allowed; Tax Board order quashed; penalty upheld as per 31.03.2010 order. [17000640770018]
JUDGMENT
Anoop Kumar Dhand, J. - A challenge in the instant petition filed by the petitioner-Assistant Commissioner, Commercial Taxes under Section 84 of the Rajasthan Value Added Tax Act, 2003 (for short 'the RVAT Act, 2003') read with Section 86 of the Rajasthan Sales Tax Act, 1994 has been made to the order dated 09.05.2017 passed by the Rajasthan Tax Board, Ajmer [for short 'the Tax Board'] in appeal No. 1403/2011/Bharatpur whereby the Tax Board while allowing the appeal filed by the respondent - assessee (hereinafter referred as 'the assessee') set aside the penalty imposed under Section 61 of the RVAT Act, 2003.
2. The issue involved in this petition is 'Whether the Rajasthan Tax Board has committed an error of law in setting aside the order of imposition of penalty despite the fact that the tax and interest imposed by the petitioner- Assistant Commissioner Commercial Tax has been upheld and the Form-C was found to be fake and forged?'
3. Brief facts of the case are that the assessee is engaged in the business of mustard oil. It was found by the Assessing Officer that the assessee sold mustard oil against declaration Form-C to the firms of Bihar. The assessee also claimed the refund as contemplated under Section 17(2) of the RVAT Act, 2003. During the course of inquiry, it was found that the declaration Form-C which was submitted by the assessee, was fake and forged and it was also found that a racket was using false, fake and forged declaration forms. A massive inquiry was conducted of various assessees and an opportunity of hearing was given to the respondent- assessee to show cause as to why tax, interest and penalty under Section 61 of the RVAT Act, 2003 be not imposed upon him. The assessee submitted its reply which was considered by the Assessing Officer and after considering the documents available on record, the Assessing Officer imposed tax, interest and penalty under Section 61 of the Act in the assessment order passed under Section 9 of the C.S.T. Act read with Sections 24, 55 and 61 of the RVAT Act, 2003 vide order dated 31.03.2010.
4. Aggrieved and dissatisfied with the aforesaid order, the assessee filed an appeal under Section 82 of the RVAT Act, 2003 before the Deputy Commissioner (Appeals) Commercial Tax Department, Bharatpur (Raj.), who vide its order dated 11.02.2011 while dismissing the appeal, upheld the order dated 31.03.2010 passed by the Assistant Commissioner.
5. The assessee aggrieved and dissatisfied with both the orders dated 31.03.2010 and 11.02.2011, filed an appeal before the Rajasthan Tax Board, Ajmer, who, while partly allowing the appeal, upheld the order of imposition of tax and interest, but set aside the order of penalty imposed upon the assessee under Section 61 of the RVAT Act, 2003.
6. The petitioner-Assistant Commissioner aggrieved with the order dated 09.05.2017 passed by the Tax Board, has preferred the instant petition before this Court.
7. Learned counsel for the petitioner - Assistant Commissioner, submitted that the Tax Board without recording any findings, upheld the findings recorded by the Assessing Authority which was approved by the Deputy Commissioner and set aside the order of penalty imposed upon the assessee under Section 61 of the RVAT Act, 2003, vide order dated 09.05.2017. Counsel submitted that after thorough inquiry it was proved before the Assessing Authority and the Deputy Commissioner that the Form- C was found to be forged and fake and the Assessee was held liable to pay tax, interest and penalty. Thus, there was no occasion available with the Tax Board to set aside the penalty imposed upon the Assessee. Lastly, counsel argued that the order dated 09.05.2017 passed by the Tax Board warrants interference of this Court.
8. E-Converso, the learned counsel appearing for the respondent submitted that the goods were purchased by the Assessee from the businessmen of other States and the Assessee was not aware that the Forms-C were bogus, fabricated and fake. Hence,
The main legal point established in the judgment is that Section 61 of the RVAT Act, 2003 allows for the levy of penalty in cases of active concealment and deliberate fraud or misinformation by the A....
The main legal point established is that penalty can be imposed for deliberate fraud or misinformation by the Assessee under Section 61 of the RVAT Act, 2003.
Penalties for false documentation under Section 7-A(2) of the AP GST Act are valid, and revisions under Section 22(1) cannot address factual disputes.
Mens-rea is an essential pre-requisite condition for imposition of penalty under Section 54(1)(2) of the U.P. VAT Act, 2008.
The cancellation of a tax declaration form does not retroactively affect previously valid inter-state sales, and tax demand notices cannot be deemed enforceable without prior assessment.
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