1. This revision petition has been filed under Section 86 of the Rajasthan Sales Tax Act, 1994 by the assessee aggrieved by the order of the Rajasthan Tax Board dated 30/8/2003,whereby, reversing the order of Deputy Commissioner (Appeals) dated 21/5/1998, the learned Tax Board restored the penalty under Section 77 (8) of the Act amounting to Rs.32,900/- on the petitioner assessee.
2. Section 77 (8) of the RST Act, 1994 permits the Assessing Authority to impose penalty equal to the amount of five times of the tax livable on such goods which are found to be unaccounted for in the Books of Accounts maintained by the assessee, after giving an opportunity to the assessee and after holding such further inquiry as it may consider necessary.
3. The learned Assessing Authority by the impugned order passed on the same date of survey i.e. 22/11/1997 imposed the said penalty for the alleged sale of 160 bags of `Urad Dal' for Rs.1,64,505.60 on the ground that in the stock register maintained by the assessee, this quantity of `Urad' was not available with the assessee and, therefore, the same were `unaccounted for goods' and attract penalty under Section 77(8) of the Act.
4. The first appellate authority Deputy Commissioner (Appeals), however, allowed the appeal filed by the assessee holding that the assessee produced the purchased bill of another registered dealer namely; M/s Devilal Satyanarain, Dooni, Bill No.186 dated 22/11/97, a copy whereof is produced at Annex.4 on the record showing the purchase of these 160 bags of `Urad Dal' for the sum of Rs.1,42,425.00. Annex.5 is the copy of prescribed declaration form issued by the Krishi Upaj Mandi Samiti, Devli in respect of sale by the another registered dealer M/s Devilal Satyanarain. So also Annex.6 is an octroi receipt issued by the Municipal Council, Kekri of 22/11/1997 in favour of the petitioner assessee.
5. Learned counsel for the petitioner assessee, therefore, contended that since the goods in question was received on the same date of survey itself i.e. 22/11/1997 and at the same time entry could not be made in the stock register, therefore, merely on that ground the goods cannot be said to be unaccounted in the Books of Accounts and the penalty under Section 77(8) was wrongly imposed by the Assessing Authority and the same was justifiably set aside by the first appellate authority. He also submitted that the first appellate authority in the impugned order dated 21/5/1998 has also doubted the recording of order sheet by the Assessing Authority while observing that the order sheet on which the impugned order was passed was of two pages, while the first page contained the signature of the assessee to the extent of his presence and survey by the Assessing Authority, the second page of the order sheet does not bear any such signature of the assessee, wherein, the impugned order has been passed. Learned Assessing Authority also failed to give opportunity of hearing to the assessee and has not held further inquiry as was envisaged under Section 77(8) of the Act and nothing about the production of bill of another registered dealer along with the supporting documents as aforesaid has been discussed by the learned Assessing Authority in the impugned penalty order. He, therefore, urged that the learned Tax Board was not right in restoring the said penalty order by reversing the findings of learned first Appellate Authority and, therefore, the said order of the Tax Board deserves to be set aside.
6. None appeared on behalf of the Revenue to oppose these submissions.
7. I have considered the submissions made at the bar by the learned counsel for the assessee and and gone through the impugned orders. In the opinion of this Court, the impugned order of learned Tax Board cannot be sustained. On the basis of documents produced on record namely; sale bill of registered dealer M/s Devilal Satyanarain, octroi receipt as well as declaration issued by the Krishi Upaj Mandi Samiti of the same date i.e. 22/11/1997 without holding proper and reasonable inquiry into the matter and giving reasonable opportunity of hearing to the assessee, learned Assessing Authority could not impose penalty under Section 77(8) of the Act in a mechanical and hurried manner. Unless these supporting documents can be inquired into and finding these to be forged, they simply could not be brushed aside by the learned Assessing Authority and in these circumstances the first appellate authority was justified in allowing the assessee the produce the same before him and on the basis of the same setting aside the penalty under Section 77 (8) of the Act. The purpose of penalty under Section 77(8) of the Act is not to extract five times of the imposable rate of tax but only after proper and reasonable inquiry and intentional non recording of the goods in the Books of Accounts is found by the Assessing Authority, such a penalty cannot be imposed. It is incumbent on the part of Assessing Authority to comply with the principles of natural justice, to hold reasonable and proper inquiry and consider the explanation of the assessee for the alleged non recording of the entries in the regular Books of Accounts and stock register.
8. In view of the fact that goods in question were purchased from the registered dealer & sold on the same date, without holding an inquiry into the genuineness of the documents, the penalty could not be imposed by the learned Assessing Authority nor these documents could be brushed aside as an after thought by the learned Tax Board as has been done by it while reversing the findings of learned first appellate authority. The findings of learned Tax Board, in these circumstances, can be said to be perverse and without any basis and, therefore, same deserves to be set aside by this Court in revision jurisdiction as it would give rise to the question of law under Section 86 of the Act.
9. Consequently, this revision petition is allowed and the impugned order passed by the learned Tax Board dated 30/8/2003 is set aside and that of learned Deputy Commissioner (Appeals) is restored. Copy of the order be sent to the opposite side forthwith.