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23 Jul 2015

Imposition of penalty u/s 78(10) of RVAT unjustified if documents are complete

Recently, in the case of Assistant commissioner of Commercial Tax, Bharatpur vs Mukesh Singh (2015) 57 taxmann.com 425 (Rajasthan), it has been held by the Rajasthan High court that if the competent authority has checked the vehicle (that was moving on road which did not have any check post) and driver has produced all the documents, imposition of penalty u/s 78(10A), is not justified.

In the said case, the vehicle was checked on the Bharatpur-Achnera road, where there was no check post. On being asked the driver produced all the relevant documents, i.e. invoice and builty. However the the stamp of any check post was not affixed on it. Hence the assessing authority passed the order for imposing penalty u/s 78(10A) due to technical breach. The Assessee filed an appeal before the first appellate authority where the said order of imposing penalty was quashed. Further an appeal before the tax board was filed by the department, on the contention that doubtlessly the documents were neither incomplete nor forged but the same were not bearing any stamp of check post.

It was held that, since there was no intention of tax avoidance by the driver and no breach of section 78(10A) is found, the petition by the Assessing Authority was dismissed.