Provisions of Rajasthan VAT Act, 2003 enacted to provide Remedy for Loss of Revenue, not to Punish the Offender for committing Offence: Rajasthan HC [Read Order]

The Rajasthan High court has held that provisions of Rajasthan VAT Act, 2003 enacted to provide remedy for loss of revenue, not to punish the offender for committing Offence.

The assessee, M/s C.P. Agro Industries 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.

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?’

The division bench of Justice Anoop Kumar Dhanand and Justice Pankaj Bhandari has held that penalty can be levied for avoidance or evasion of tax where (i) any Dealer has concealed any particulars from any returns furnished by him; or (ii) has deliberately furnished inaccurate particulars therein; and (iii) has concealed any transaction of sale or purchase from its accounts, registers or documents required to be maintained by him under the RVAT Act of 2003.

“The Tax Board has neither recorded any cogent finding on merits of the case before setting aside the penalty nor it has considered the provisions of section 61 of the RVAT Act, 2003, more particularly, when the fact was proved before all the Authorities that Forms-C submitted by the Assessee were forged and fake to avoid payment of Tax. The penalty was rightly imposed upon the Assessee by the Authorities as he (Assessee) furnished inaccurate particulars and he also concealed the transactions of sale and purchase to avoid the payment of Tax. Therefore, the Assessee is liable to pay penalty u/s 61 of the RVAT Act, 2003,” the court observed.

To Read the full text of the Order CLICK HERE

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