COMMERCIAL TAXES OFFICER Vs. SHYAM AGENCY

JUDGEMENT

(1.) This is a Section 84 of the Rajsthan Value Added Tax Act, 2003 (hereinafter 'the 2003 Act') sales tax Revision Petition against the order dated 19-9-2013 passed by the Rajasthan Tax Board, Ajmer (hereinafter 'the Board'). Thereby the appeal filed by the petitioner department (hereinafter 'the department') against the order dated 22-2-2012 passed by the Dy. Commissioner (Appeals) has been dismissed.

(2.) The facts of the case are that the respondent assessee (hereinafter 'the assessee') is engaged in the business of branded confectionery "Priyagold" TM Toffito Mango cream toffee. The business premises of the assessee was inspected by the assessing authority on 16-9-2010, wherein it was found that the assessee had paid tax at the rate of 4% on branded confectionery, which according to revenue was taxable at 12.5%. Notice to show cause resulted. Reply was filed by the assessee, but found unsatisfactory. The Assessing Officer vide order dated 28-2-2011 held the assessee liable to pay differential tax of 8.5% over the tax of 4% already paid and also held it liable to pay interest under section 55 of the 2003 Act. Penalty under Section 61 of the 2003 Act was also levied. The assessee appealed under Section 82 of the 2003 Act against the order dated 28-2-2011 before the Dy. Commissioner (Appeals). The Dy. Commissioner (Appeals) vide order dated 22-2-2012 while upholding levy of additional tax and interest, set aside the order of penalty under Section 61 of the 2003 Act. Dissatisfied with the order dated 22-2-2012 both the department and the assessee preferred further appeals under Section 83 of the 2003 Act to the Board. The Board vide order dated 19-9-2013 has dismissed departmental appeal relying upon the judgment of the Hon'ble Supreme Court in case of Shree Krishna Electricals Vs. State of Tamilnadu, 2009 11 SCC 687] as had the Deputy Commissioner (Appeals) in setting aside the levy of penalty under Section 61 of the 2003 Act against the assessee. Hence this revision petition.

(3.) The officer in-charge, present in the court in absence of the department's advocate owing to advocates' strike, has submitted that payment of tax on goods sold claimed at the rate of 4% ad valorem by the assessee as against the tax due at the rate of 12.5% as found by the assessing officer, has been negated by the first appellate authority as also Tax Board and the sale of the goods in issue found to be exigible to tax @ 12.5%/ 14% ad valorem. According to him this indicates that the assessee had deliberately and intentionally short paid the tax in an attempt at evasion. It has been submitted that consequently the pre conditions for operation of Section 61 of the 2003 Act were fulfilled and that the Dy. Commissioner (Appeals) and the Tax Board vide orders dated 22-2-2012 and 19-9-2013 have wrongly interfered with the levy of penalty by the assessing authority. It has been submitted that the very fact that the assessee was found liable to pay additional tax of 8.5% on the sale of its goods establishes that the assessee was liable to pay the statutory penalty without anything more such as the intent/ mens-rea of the assessee to evade tax due was not required to be established. It has been submitted that penalty under Section 61 of the 2003 Act is attracted as soon as there is contravention of the obligation to pay tax due as penalty imposed under the Act of 2003 for tax delinquence is remedial and coercive in nature and cannot be equated with the penalty for an offence where men-rea is essential. In support of the contention reference has been made to the decision of the Hon'ble Apex Court in the case of Guljag Industries Vs. CTOm,2007 8 VatR 87] and R.S. Joshi Vs. Ajit Mills, 1977 AIR(SC) 2279].