Rajasthan High Court - Jaipur
Dy Commissioner Appels & Ors vs M/S Jagdamba Works & Ors on 16 December, 2016
1
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR
BENCH, JAIPUR
S.B. SALES TAX REVISION PETITION No.490/2011
DY. COMMISSIONER (APPEALS), THIRD, COMMERCIAL TAXES,
JAIPUR.
CTO, SIKAR.
v.
M/S. JAGDAMBA FIRE WORKS, SIKAR.
THE RAJASTHAN TAX BOARD, AJMER.
Order reserved on : 21st November 2016
Order pronounced on : 16th December 2016
HON'BLE MR. JUSTICE JAINENDRA KUMAR RANKA
Mr. R.B. Mathur
Ms. Tanvi Sahai counsel for petitioners
Mr. Alkesh Sharma counsel for respondents
ORDER
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1. The instant petition is directed against order dt 9.7.2008 passed by the Rajasthan Tax Board, Ajmer, in Appeal No.1601/2007/Sikar, whereby appeal filed by the respondent has been allowed.
2. The brief facts noticed are that on 23.10.2001 a survey was conducted at the business premises of the respondent assessee, who is a dealer of fire works, where the officers found that there was unaccounted stock and there was wide variation insofar as books are concerned as well as the actual stock found. It was found that there was an excess stock to the tune of an amount of Rs.1,50,750/- which was not recorded in the books and the assessee was not able to prove by acceptable evidence with bills or vouchers and, therefore, a show cause notice was issued for 2 30.10.2001, however, the respondent assessee gave a letter on the spot accepting the mistake and accepted that it is unaccounted stock and that an order may be passed and that he was ready, willing and prepared to pay the penalty as well. Accordingly, the Assessing Officer passed order u/s 77(8) of the RST Act, 1994.
3. The matter was assailed before the Dy. Commissioner (Appeals), where it was asserted that there was coercion and pressure on the assessee at the time of survey and there was violation of provisions of Rule 50 of the RST Rules, 1995. However, the DC(A) being not satisfied with the explanation offered by the respondent, upheld the penalty. On a further appeal preferred by the respondent before the Tax Board, the Tax Board accepted the contention of assessee and held that there is violation of Rule 50 and that there was no signature of the AO on the stock statement taken at the time of survey nor there are two witnesses and that a copy of the stock statement was also not provided to the respondent, accordingly deleted the penalty.
4. Learned counsel for the petitioner vehemently contended that once the AO accepted the guilt and admitted that there was excess stock/unaccounted stock, then nothing more was required to be proved by the AO. Learned counsel also contended that an order-sheet was drawn on 23.10.2001, on the day of survey, show cause notice was given and the assessee himself wrote a letter on the spot duly signed that he is ready, 3 willing and prepared to pay the penalty and that there is an excess stock to the extent of Rs.1,50,750/-. Learned counsel also produced the records of AO to show that the finding reached by the Tax Board that there are no signatures of the AO on the stock statement or of the assessee, is apparently wrong because there are signatures not only of the assessee but counter signed by the AO also on the same day i.e. 23.10.2001, and such stock statement is running into several pages and each duly signed by both the assessee as well as the AO.
5. Learned counsel further contended that if a claim is made at much later stage that there was coercion or pressure by the AO, cannot be considered at such a belated stage and had the assessee any grievance of coercion or otherwise, he could have approached the senior officers bringing to the notice that there was coercion and pressure built up by the AO at the time of survey. Learned counsel also contended that u/R. 50, only in a case where goods are to be attached or seized, two witnesses are required otherwise the witnesses are not necessary where there is a voluntary statement of the assessee. Learned counsel also relied on the judgment of this court in ACTO v. M/s Lining Bukram House [STR 175/2009, decided on 5.10.2016] where this court has taken into consideration identical facts that if a claim of coercion is subsequently made, much later, not within a reasonable time before the senior officers conducting survey/search, such statement 4 cannot be read, and contended that the issue is required to be considered and order of Tax Board is required to be reversed.
6. Per contra, learned counsel for the respondent assessee contended that the finding reached by the Tax Board is just and proper and is not required to be interfered with. He contended that the Tax Board came to a correct conclusion after going through the records which proved that the AO did not sign in the stock statement prepared at the time of survey. Learned counsel also contended that there was pressure and coercion on the assessee to surrender certain stock which was recorded and disclosed and such an order passed by the AO was not sustainable and has rightly been interfered by the Tax Board, and contended that the judgment of this court in the case of ACTO v. M/s Lining Bukram House (supra) is distinguishable. Learned counsel relied on judgments rendered by this court in M/s. Diamond Marketing Agency v. ACTO [STR 76/2006, decided on 13.9.2007], CTO v. M/s. Badri Lal Kedar Lal [STR 214/2011, decided 27.3.2015], CTO v. M/s. Dueful Laboratories [STR 542/2011, decided on 29.8.2016].
7. I have considered the arguments advanced by the learned counsel for the parties and have perused the material including the records of the survey team. On perusal of the survey records, in my view the claim of the learned counsel for the assessee as well as Tax 5 Board that there are no signatures of the assessee or of the AO, on stock statement is not found correct and even the finding reached by the Tax Board in my view is not well justified. The original records do prove that there is a stock statement running into several pages and both the assessee as well as the AO have duly signed the statement. A trading account was also drawn from 1.4.2001 to 22.10.2001 which is also duly signed by the assessee as well as counter signed by the AO. Admittedly, show cause notice was given by the AO for 30.10.2001 and admittedly there is a letter written by the assessee where he accepted that "I accept that there is undisclosed stock to the extent of Rs.1,50,750/-" and he has also further stated that the same was not recorded in the books of account and even prayed that an order may be passed on the same day and he is ready, willing and prepared to pay the penalty and, therefore, the goods may not be seized. When the AO after having taken on record the voluntary statement of the assessee, in my view, he was not required to take into consideration any other issue and again an order-sheet was drawn after the letter was written by the assessee, about surrender to the extent of accepting the penalty. Admittedly, the assessee also deposited the said penalty of Rs.45,225/- on 27.10.2001.
8. Admittedly, after the survey came to be conducted, there was no claim by the assessee before any senior administrative authority by any 6 letter/affidavit bringing to the notice of the officers about pressure/coercion. It is only at the stage when an appeal was filed, that such a claim was made.
9. This court in the case of ACTO v. M/s Lining Bukram House (supra) has taken into consideration identical facts that if there is voluntary statement and not complained of to the higher authorities within a reasonable period, such a fact cannot be accepted in appellate proceeding later on and after a considerable long period. The facts are identical of the instant petition vis a vis the judgment supra.
10. The judgments relied upon by the learned counsel for respondent assessee are distinguishable on facts.
11. In my view, after going through the facts found and perusal of the records and taking into consideration the judgment of this court in the case of ACTO v. M/s Lining Bukram House (supra), the order of Tax Board is not sustainable and is required to be interfered and is accordingly interfered and the finding reached by the AO and DC(A) is just and proper and is accordingly sustained, and thus the penalty was rightly levied. Consequently, the petition succeeds.
(JAINENDRA KUMAR RANKA) J.
db 114