THE  MADRAS  ELECTRIC  TRADES  ASSOCIATION
(REGD. UNDER THE SOCIETIES REGN. ACT NO:XXI  OF 1860)
93, GOVINDAPPA NAICKEN STREET, II FLOOR,CHENNAI-600 001.
TELEFAX:25390360,TOUCHTEL PH:42167776.
E-mail:meta@airtelbroadband.in, Website:www.metachennai.com

To
All the Members of Our Association.

Dear Sir,

                We are pleased to communicate the gist of the judgment reported, in VST Cases Volume 30 part 3, Page No. 254, 264 for your kind information and guidance.

Thanking You,

Yours Faithfully,
FOR THE MADRAS ELECTRIC TRADES ASSOCIATION,

[CHANCHAL RAJ KHIMSURA]
HON. GENL. SECRETARY.

[IN THE SUPREME COURT OF INDIA]

ASSISTANT COMMERCIAL TAXES OFFICER

v.

KANSAI NEROLAC PAINTS LTD.

S.H. KAPADIA AND SWATANTER KUMAR JJ

April 15, 2010.

        SALES TAX – TRANSPORT OF GOODS – BLANK DECLARATION FORMS ST 18A – PENALTY FOR TRANSPORTING OF GOODS WITH INCOMPLETE DOCUMENTS PRIOR TO MARCH 22, 2002 – WHETHER CAN BE IMPOSED AGAINST OWNER OF GOODS – HIGH COURT – REVISION – DISMISSAL WITHOUT RECORDING REASONS – NOT PROPER – APPEAL – SUPREME COURT – REMAND TO HIGH COURT FOR FRESH DISPOSAL – RAJASTHAN SALES TAX ACT, 1994 (22 OF 1995), ss. 78(2), (5), 86 – RAJASTHAN SALES RULES, 1995, r. 53: FORM ST 18A.

        In a revision petition before the high Court under section 86 of the Rajasthan Sales Tax Act, 1994, from an order of the Rajasthan Tax Board, the Department had raised the following important questions of law: (i) whether means rea was necessary on the part of a dealer for the imposition of penalty under section 78(5) for violation of the provision of section 78(2): (ii) whether blank declaration form ST 18A with the goods in transit by itself attracted the penalty under section 78(5): and (iii) whether the Board had erred in law in holding that prior to March 22,2002, penalty under section 78(5) could not have been imposed against the owner of the goods transported. The High Court, without recording reasons, dismissed the petition holding that it had no merit. On appeal to the Supreme Court:

        Held, on the facts, remanding the matter to the High Court for hearing the case de novo and passing appropriate orders in accordance with law, that since the High Court erred in law in not recording any reasons for dismissing the revision petition under section 86 of the Rajasthan Sales Tax Act, 1994, the order of the High Court was unreasoned and suffered from infirmity of non-application of mind.

[IN THE KARNATAKA HIGH COURT]

ABHAY SOLVENT PVT. LTD

v.

STATE OF KARNATAKA

K.L. MANJUNATH and ARAVIND KUMAR JJ

December 1, 2010.

        SALES TAX – CHECK POST – EVASION OF TAX – PENALTY – FAILURE TO STOP VEHICLE AT CHECK-POST – APPELLATE AUTHORITY SATISFIED CAUSE SHOWN “SUFFICIENT” TO ANNUL PENALTY LEVIED BY ASSESSING AUTHORITY – NO VIOLATION OF ANY OTHER PROVISIONS – REVISING AUTHORITY NOT JUSTIFIED IN RESTORING PENALTY – KARNATAKA SALES TAX ACT (25 OF 1957), S. 28a (2) (D), (4).

        The vehicle carrying goods of the appellant was intercepted by the Commercial Tax Officer and notice was issued to show cause why penalty under the Karnataka Sales Tax Act, 1957should no be levied on the appellant on the ground that the appellant attempted to evade the tax by not stopping the vehicle at check-post and obtaining the seal thereof. The Commercial Tax Officer found that the driver was guilty of violating section 28A (2) (d) of the Act and levied penalty which was paid under protest by the appellant. The appellate authority on considering the grounds urged in the appeal was satisfied that the cause shown as contemplated under section 28A (4) of the Act was sufficient to annul the penalty levied and accordingly allowed the appeal and directed the authorities to refund the amount of penalty collected. The revisional authority after issuance of notice and considering the objections, came to the conclusion that the order of the appellate authority was erroneous and prejudicial to the interest of the Revenue, revised the order of the appellate authority and restored the order of the commercial Tax Officer. The appellant filed an appeal and contended that the appellant being a 100 percent exempted unit did not attempt to evade payment of tax and non-stopping of vehicle was on account of the bona fide impressions of the driver that the Nelamangala check-post had bee abolished. It was found from the records that all requisite documents as contemplated under the Act accompanied the goods and that there were no discrepancies noticed by the authorities:

        Held, allowing the appeal, that the authority at the check-post or the appellate authority were required to consider the cause given by the party alleged to have contravened the provision of sub-section (2), (3), (3A), or (3B) of section 28A to arrive at a conclusion whether there was justifiable reason to levy the penalty. In the case of the appellant the only ground on which penalty was levied was on account of non-stopping of the vehicle at the first check-post or barrier situated on the route as required under section 28A(2) of the Act. The appellate authority has accepted the cause shown by the appellant as “ Sufficient cause” for annulling the levy of penalty and revision of that order, by the revisional authority only on the premise of the violation of section 28A (2) (d) of the Act would be contrary to the spirits and intension behind sub-section (4) of section 28A of the Act. Therefore the order of the revisional authority was to be set aside.