MONA GRANITES P LTD Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) BY way of this writ petition under article 226 of the Constitution, the petitioner, a private limited company engaged in the business of manufacturing marble slabs and tiles, seeks to quash the notice dated August 6, 2001 (annexure 3) issued by the second respondent, i. e. , Commercial Taxes Officer, Rajsamand, under sections 29, 58, 61 and 65 of the Rajasthan Sales Tax Act, 1994.

(2.) A test check of records for the period from 1994-95 to December, 2000 of the Central Excise Department, Rajasthan, revealed that the manufacturing assessees have evaded payment of Central excise duty either by way of clandestine removals or under-valuation or otherwise and consequently, the demands aggregating to Rs. 2,719. 27 lakhs (Rs. 27 crore odd) of Central excise duty have been confirmed by the adjudicating authorities of the department. It is also found that a sum of Rs. 6,819. 80 lakhs (Rs. 68 crore odd) on account of under-valuation of goods escaped from charging sales tax. Out of 324 in 180 cases, an amount of Rs. 342. 79 lakhs on account of Central excise duty has so far been recovered. In terms of section 75 of the Rajasthan Sales Tax Act, every dealer is required to keep and maintain a true and correct account showing the value and quantity of goods received, manufactured, sold or otherwise disposed of or held in stock by him. Failure to do so, may lead to escaped assessment which, as per section 30 of the Act, is an assessment in which for any reason, the levy of tax has been escaped wholly or in part; or wherein tax has been wholly or in part unassessed or under-assessed in any way or under any circumstances. In such cases, where the Commissioner or a Deputy Commissioner (Administration) has reason to believe that an escapement has occurred, he may either direct the assessing authority to assess the tax or himself proceed to assess the same. Further, under the provisions of section 65 of the Act, if the dealer conceals any particulars from the return furnished by him or has deliberately furnished inaccurate particulars therein or has concealed any transaction of sale or purchase in his books of account or registers required to be maintained under the Act, he is liable to pay by way of penalty in addition to the tax payable by him, a sum not exceeding the amount of such tax. Thus, the assessees are liable to pay sales tax along with the penalty on the escaped turnover. The non-levy of tax has resulted into loss of crores of rupees. In this background, the impugned notice has been issued to the petitioner company. From the order of the Additional Commissioner, Central Excise, Jaipur, it has become apparent that the petitioner has been guilty of evasion of Central excise duty. There is prima facie material to show that petitioner has derived the profit from the unaccounted sale of marble and tiles. In view of these facts, the impugned show cause notice was given to the petitioner. The petitioner was required to explain the shortage of stock, which is tentatively assessed at Rs. 98,480.