Rajasthan High Court in a very important case namely ACTO vs Jain Hardware Stores has held that no penalty can be levied in the provisional assessment as for leving penalty definite findings and conclusions and many things have to be proved, therefore penalty cannot be levied merely on the basis of provisional assessment.
The High Court while dismissing the revision petition of the State held as under:
"After going through the orders impugned, I am of the opinion, that the Tax Board as well as the DC (A) have rightly deleted the penalty imposed by the AO taking into consideration the fact that merely on the basis of provisional assessment, penalty is not leviable. There is no basis for such imposition after all for imposition of penalty Assessing Officer has to come to a definite finding and conclusion and many things have to be proved, imposition of penalty is a serious matter and cannot be imposed in a casual or summary manner like in the present case therefor, on the basis of provisional assessment, an estimation penalty cannot be levied and it has rightly been deleted. I do not find any illegality, irregularity and perversity, in the orders passed by the Tax Board as well as by the DC(A), as such, no interference is called for by this Court as no question of law is involved."
Full judgement is as under:
A C T O Jaipur vs M/S Jain Hardware & Mills Store on 25 July,
2013
IN THE HIGH COURT OF
JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR.
25.07.2013 SB Sales Tax
Revision Petition No.101/2011
Assistant Commercial Taxes Officer, Ward-I,
Ajmer.
vs.
M/s. Jain Hardware and Mill
Stores, Ajmer.
HON'BLE MR. JUSTICE J. K.
RANKA Mr. RB Mathur, for the petitioner.
1. By this petition, the
petitioner has assailed the order passed by the Rajasthan Tax Board, Ajmer (In
short 'The Tax Board') dated 11.3.2003 in Appeal No.490/2001, whereby it
rejected the appeal filed by the petitioner-department by upholding the order
passed by the learned Deputy Commissioner (Appeals), Commercial Taxes
Department, Ajmer ( in short 'The DC(A), dated 7.12.2000 and quashed and
set-aside the order of penalty passed by the learned Assessing Officer (In
short 'The A.O.') amounting to Rs. 24921/- under Section 77(8) of the Act.
2. It is noticed that the
A.O. imposed the penalty only on the basis of provisional assessment and the
DC(A) in appeal came to the conclusion that no penalty could be imposed where
provisional assessment has been made and accordingly, deleted the penalty as
even otherwise, there is no basis for the same. The order passed by the DC(A)
was challenged before the Tax Board, by the petitioner-department. The Tax
Board also came to the same conclusion by upholding the order passed by the
DC(A) and held that merely on provisional basis or on account of estimation no
penalty could be imposed.
3. Hence, this revision
petition.
4. Mr. RB Mathur, learned
counsel for the petitioner-department submits that both the lower Appellate
Authorities have committed gross error in reversing the findings given by the
AO who had rightly arrived at a conclusion that on provisional assessment,
penalty is leviable.
5. I have considered the
arguments advanced by the learned counsel for the petitioner and perused the
impugned orders passed by the Tax Board and the DC(A). After going through the
orders impugned, I am of the opinion, that the Tax Board as well as the DC (A)
have rightly deleted the penalty imposed by the AO taking into consideration
the fact that merely on the basis of provisional assessment, penalty is not
leviable. There is no basis for such imposition after all for imposition of
penalty Assessing Officer has to come to a definite finding and conclusion and
many things have to be proved, imposition of penalty is a serious matter and
cannot be imposed in a casual or summary manner like in the present case
therefor, on the basis of provisional assessment, oar estimation penalty cannot
be levied and it has rightly been deleted. I do not find any illegality,
irregularity and perversity, in the orders passed by the Tax Board as well as
by the DC(A), as such, no interference is called for by this Court as no
question of law is involved.
6. Consequently, the Sales
Tax Revision Petition is dismissed.
(J. K. Ranka),J.
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