1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR. 1. S.B. Civil Sales Tax Revision No.621/1999 Assistant Commercial Taxes Officer, Bikaner vs. M/s. Standard Agriculture Services, Bikaner. 2. S.B. Civil Sales Tax Revision No.603/1999 Assistant Commercial Taxes Officer, Bikaner vs. M/s. Standard Agriculture Services, Bikaner. 3. S.B. Civil Sales Tax Revision No.623/1999 Assistant Commercial Taxes Officer, Bikaner vs. M/s. Standard Agriculture Services, Bikaner. Date : 5.12.2006 HON'BLE MR. PRAKASH TATIA, J. Mr. Sangeet Lodha, for the petitioner. Mr. Niraj Jain for Mr.A Kothari, for the respondent. - - - - - REPORTABLE Heard learned counsel for the parties. These three revision petitions have been preferred by the Revenue against the same party and, therefore, 2 all three revision petitions are heard together and are being decided by this common order. FOR THE YEAR 1989-1990 : Facts of the case are that the respondent assessee is a registered dealer under the provisions of Rajasthan Sales Tax Act, 1994 (for short, 'the Act of 1994') and according to the revenue, the respondent is engaged in the trade of sale and purchase of the tractor. The respondent assessee submitted quarterly returns for the year 1989-1990. Total four returns were submitted, two on 4.10.1989 and two on 12.4.1990. The returns were for the period 1.4.1989 to 30.6.1989, 1.7.1989 to 30.9.1989, 1.10.1989 to 31.12.1989 and 1.1.1990 to 12.4.1990. In these returns, sale of tractors were not shown by the dealer. On 19.7.1991, survey was conducted at the assessee's premises and at that time, Mr.Pradeep Narain Mathur, partner of the assessee firm, was present and when the officers of the revenue demanded books of accounts, he informed that they are not available at the business place of the assessee as they are lying with the accountant of the assessee. At that time, according to the revenue, said Pradeep Narain Mathur stated that the assessee firm is neither dealing with the trade of purchase and sale of the tractor nor they are manufacturing the tractor. The 3 assessee firm is dealing only in the tractor parts and for that sale, the assessee is paying tax. Again on 22.7.1991, survey was conducted in the premises of the assessee where Rajendra Kumar Mathur and Amba Lal Mathur were present and when again books of accounts were demanded by the officers of revenue, they failed to produce the books of accounts and stated that all informations are available with the partner of assessee firm – Mr.Pradeep Narain Mathur. The assessee on 24.7.1991 submitted revised returns for the period mentioned above and disclosed the sale of 4 tractors but in the proceedings for assessment of tax and levy of penalty upon the assessee, several notices were issued to the assessee by the assessing authority but the assessee failed to produce books of accounts. According to the revenue, the revenue enquired from the manufacturing firm of the tractor namely, HMT Ltd., Chandigarh and found that the assessee is the dealer of manufacturer HMT Ltd. and purchased the tractors for sale in Rajasthan. The fact was corroborated by the information which was provided by the District Transport Authority to the Assessing Authority. Since 1985-86, he purchased 42 tractors from the manufacturing company for sale. On the basis of the evidence collected from the tractor manufacturing company and from the office of District Transport Officer, and on the basis of the reasons that the 4 assessee in its original returns furnished in the year 1989 did not disclose the sale of the tractors and in survey, it was stated that the assessee is not dealing in the trade of purchase and sale of the tractor whereas the manufacturing company disclosed that the assessee is the dealer of the manufacturing company for the sale of the tractor and in fact, the assessee imported tractor from the manufacturing company and this fact was corroborated by the evidence obtained from the office of the District Transport Officer, the assessing authority, after holding that the revised returns filed by the assessee were barred by time and the assessee failed to produce the books of accounts at any point of time and, therefore, if the revised returns are accepted, that will be favour to tax evaders only. The assessing authority rejected the revised returns and held that the assessee with the intention to conceal the sale and avoid tax, submitted false returns, therefore, the assessee is liable to pay the tax amount and also liable to pay the penalty under Section 16(1)(e) of the Act of 1954 of Rs.93,987.28p. with tax amount of Rs.65,985/-. Out of the total tax amount, the assessee deposited Rs.22,586/- but with delay and the remaining amount of Rs.43,399/- has not been deposited till the order was passed, therefore, interest was also imposed on the assessee. Penalty for late furnishing the Form No.66 was also imposed. 5 The assessee submitted one application under Section 10-C of the Sales Tax Act along with application for condonation of delay with request to give opportunity to assessee to submit his case. The said application was allowed and the assessing authority vide order dated 23.7.1992 held that the assessee did not disclose the sale of 4 tractors only in place of 5 tractors. The assessing authority again after upholding case of willful concealment of the sale by the assessee to avoid tax, took lenient view and reduced the penalty imposed upon the assessee and recalculated the amount of tax and penalty by order dated 29.7.1992. Being aggrieved by the order of assessing authority dated 29.7.1992 for the year 1989-1990, the assessee preferred appeal before the Deputy Commissioner (Appeals), Commercial Taxes, Bikaner. The Deputy Commissioner (Appeals) in his order dated 3.11.1995 held that the concealment of sale by the assessee was with an intention to avoid the tax and further held that the books of accounts subsequently shown by the assessee are prepared books of accounts in support of its case. Some minor changes were allowed by the Deputy Commissioner (Appeals) which are not very much relevant for the purpose of deciding these revisions in view of the questions raised by the 6 revenue in these revisions but so far as holding the assessee guilty of concealment of taxable sale and intention of the assessee, the finding of the assessing authority was upheld by the Deputy Commissioner (Appeals). Being aggrieved against the order of the Deputy Commissioner (Appeals) dated 3.11.1995, the assessee preferred further appeal before the Rajasthan Tax Board, Ajmer which was allowed by the Tax Board by common order dated 17.4.1998. The Tax Board was of the view that once assessee submitted Form ST 18A at the check post and entered the sale in the books of accounts, therefore, it is not a case of willful concealment of sale by the assessee. FOR THE YEAR 1990-1991 : For the next year 1990-1991, the assessee submitted quarterly returns on 26.7.1991. These returns were for the period ending on 30.7.1990, 30.10.1990, 30.1.1991 and 30.4.1991. The assessing authority observed that the assessee did not submit the returns till his premises were surveyed on 19.7.1991 and 22.7.1991 and the assessee sold the tractors and collected the tax amount but did not deposit the tax amount before submitting returns and the tax amount has not been deposited even upto the assessing authority 7 passed the assessment order dated 17.8.1992. The fact of conduct of the partner of the assessee firm at the time of survey was also taken note of and the assessing authority took note of statement of the assessee wherein he stated that he is not dealing in the sale and purchase of the tractor. The assessee for the year 1990-91 submitted written reply before the assessing authority and stated that he signed the statement recorded at the time of survey without reading the statement. He admitted that the assessee is the dealer of HMT tractors. It is also submitted that the survey was conducted in the year 1992 and, therefore, survey report cannot be considered for the assessment year 1990-91. Explanation was submitted by the assessee that because of poor financial condition, the assessee could not deposit the tax amount in time nor the assessee could deposit the return in time. The assessee stated that he is maintaining the books of accounts and all the entries of purchase and sale of tractor have been entered in the books of account. Assessee's only fault is that it could not deposit the tax amount in time. The assessing authority was of the view that had there been no survey on the premises of the assessee, the assessee would have taken benefit and the act of assessee of not depositing the tax amount was with the intention to avoid the tax liability. The assessee avoided to produce the books of accounts at the time of 8 survey and he did not deposit the tax amount even after long period and till his assessment order was passed. The assessee was served with several notices which are dated 6.8.1991, 16.8.1991, 5.9.1991, 17.2.1992 and 25.2.1992, pointing out that along with the returns, the assessee has not submitted ST-1- challan and, therefore, the returns submitted without proof of payment of tax amount are liable to be rejected and the assessee is liable to pay the interest and penalty also. The assessee's explanation that he could not produce the books of accounts because they were lying with the assessee's accountant and he died subsequently, was not accepted by the assessing authority. The assessing authority further observed that despite several notice, the assessee did not produce the books of accounts or any record and, therefore, found that the assessee with the intention to conceal the tax liability, did not submit the books of accounts. The assessing authority, therefore, calculated the tax and imposed the penalty, quantum whereof is not very much relevant for the purpose of deciding these revisions. The assessee preferred appeal against the order dated 17.8.1992 before the Deputy Commissioner (Appeals), Bikaner. Said appeal was also dismissed by the learned Dy. Commissioner (Appeals) vide order dated 9 2.11.1995 after holding that the assessee is guilty of suppressing the sale and deliberately did not produce the books of accounts and the books of accounts relied upon are prepared subsequently to avoid the liability of penalty etc. It will be worthwhile to mention here that the penalty amount was reduced by the Dy. Commissioner (Appeals). Being aggrieved against the order of the Dy. Commissioner (Appeals) dated 2.11.1995 for the year 1990-1991, the assessee preferred appeal before the Tax Board whereas the revenue preferred appeal to challenge the reduction in penalty amount. Both these appeals – one by assessee and another by revenue were heard and decided by the Tax Board by common order dated 17.4.1998. In the backdrop of these facts, the revenue has preferred three revisions against the common order of Tax Board dated 17.4.1998 deciding 3 appeals – 2 by assessee and one by revenue. Following questions of law arise in this revision petition out of the orders of the Tax Board :- (i)Whether in the facts & circumstances of the case the learned Tax Board was justified in 10 interfering with the concurrent finding arrived at by the authorities below after examining the matter in its entirety and objectivity ? (ii)Whether in the facts & circumstances of the case the findings under Sec.16(1)(i)(e) was made out against the respondent-Dealer so as to attract the liability of penalty ? According to learned counsel for the revenue, the facts which are not in dispute are that the assessee submitted returns for the year 1989-1990 on 4.10.1989 and 12.4.1990. In those returns, the sale of the tractor has not been disclosed by the assessee. The assessee's premises were surveyed on 19.7.1991 and 22.7.1991 i.e. after 21 and 15 months from the date of submitting returns by the assessee and there, the statement of partner of the assessee was recorded wherein he stated that the assessee is dealing in only sale of tractor parts and not dealing with the sale of tractor. The revenue collected evidence from the manufacturing company and also from the office of District Transport Officer. From the said evidence, it is fully proved that the assessee was engaged in the trade of sale and purchase of the tractor. The assessee was served with several notices and was asked to produce the books of accounts and it did not produce the books of accounts before the assessing authority is 11 also an admitted fact. The assessee immediately after survey submitted revised returns within two days from the date of second survey and within 5 days from first survey, wherein the assessee submitted that he sold the tractor after importing the tractor within the State of Rajasthan and this is also an admitted fact that the sale has not been disclosed in the returns which were filed in the year 1989-1990 and till assessee's premises were surveyed. The assessee sold the tractors and collected the tax amount from the customers but did not deposit the tax amount. The assessee did not produce the books of accounts at the time of survey nor he produce the books of accounts at the time of assessment proceedings and even till the assessment order was passed. It is also submitted that from the evidence available on the record, it is fully proved that the assessee deliberately concealed the sale with the sole intention to avoid the tax. So far as the revised returns are concerned, according to learned counsel for the revenue, they were filed to cover up the allegation of concealment of sale of tractors by the assessee and were filed after inordinate delay and the assessee had no right to file the revised returns merely as per his wish at any time and to cover up his fault. The revised returns only proved the fact of sale of tractor by the assessee and that further proves that the return 12 submitted by the assessee earlier were wrong returns. According to learned counsel for the revenue, subsequent furnishing of the revised returns is absolutely irrelevant for the purpose of finding out the intention of the assessee at the time when it submitted false returns and, therefore, the assessing authority rightly relied upon the evidence which came on the record namely, information provided by the tractor manufacturing company and by the transport office of Bikaner and rightly reached to the conclusion that the assessee was dealing in the purchase and sale of tractors and it did not disclose its sale nor it deposited the tax amount in time quarterly nor the assessee deposited the tax thereafter and the statement of the assessee's partner before the surveying authorities that the assessee is not dealing in the sale and purchase of the tractor, therefore, from all circumstances, it is fully proved that the act of the assessee was deliberately conscious and with intention to avoid the tax. Learned counsel for the revenue also submitted that the explanation submitted by the assessee for not disclosing the sale of tractor in original return are absolutely flimsy grounds. According to learned counsel for the revenue, it is not the case of the assessee that in the year 1989, for entire period running from 1.4.1989 to 31.3.1990, the assessee's accountant was 13 sick. It is not the case of the assessee that they were not having the possession of books of accounts rather from the return submitted by the assessee, it is clear that the assessee disclosed facts about sale of some items and calculated the tax amount. Therefore, in fact, there is no explanation for furnishing the false return in the department by the assessee. Learned counsel for the respondent/assessee vehemently submitted that it is settled law that the burden to prove the conscious concealment of sale by the assessee lies upon the revenue and this burden cannot be shifted upon the assessee. It is also submitted that even mere filing of the return which is found not correct or found not disclosing the total sale by the assessee, is no ground for holding that it was conscious and deliberate act of the assessee for the purpose of avoiding the tax liability. It is also submitted that the proceedings of imposition of penalty is quasi criminal and, therefore, strict proof of intention of the assessee is required for imposition of penalty. It is also submitted that the assessee is keeping the books of accounts which were produced subsequently before the authorities. The assessee purchased the tractors and Form ST 18 was also submitted at the check post. The assessee entered all the sales in its books of accounts. The assessee 14 submitted revised return even before service of notice by the department upon the assessee and he disclosed the sale of the tractor. The assessing authority itself allowed the application of the assessee filed under Section 10-C of the Sales Tax Act and the assessing authority accepted the explanation submitted by the assessee for not submitting the return in time on the ground of sickness of the assessee's partner and in another case because of death of accountant of the assessee. The assessing authority, therefore, modified the order dated 29.4.1992 vide order dated 29.7.1992 and reduce the liability of the assessee even for the sale of the tractors as in earlier order, the assessing authority held that total 5 tractors were sold but in fact, only 4 tractors were sold by the assessee is relevant period. Learned counsel for the assessee vehemently submitted that it is pure question of fact whether the act of assessee was deliberately and for the purpose of concealment and avoidance of tax and the Tax Board after considering all the relevant facts as well as law laid down by the Hon'ble Apex Court, reached to the conclusion that the assessee submitted revised returns and was keeping the books of accounts and mere furnishing the returns with omission of mentioning the sale of tractors, it cannot be a ground for imposing the penalty. The Tax Board also considered the 15 statement of partner of the assessee alleged to have been recorded at the time of survey and held that statement cannot be used against the assessee and, therefore, there was no material before the assessing authority on the basis of which the assessing authority could have reached to the conclusion that the assessee with the intention to avoid tax deliberately and consciously, submitted false returns. Learned counsel for the assessee relied upon the following judgments :- (1) 61 STC 393 (Rajasthan) (2) 97 STC 238 (Rajasthan) (3) 74 STC 288 (Rajasthan) (4) 76 ITR 696 (SC) (5) 168 ITR 705 (SC) (6) 139 ITR 902 (Madras) (7) 118 ITR 94 (Madras) (8) 79 ITR 499 (SC) (9) 221 ITR 110 (Guj.) (10) 265 ITR 562 (SC) (11) 28 STC 700 (12) 106 ITR 452 (Patna HC) I considered the submissions of learned counsel for the parties, perused the facts of the case and the judgments relied upon by learned counsel for the respondent/assessee. 16 The first judgment relied upon by learned counsel for the assessee is delivered in the case of Murarilal Ahuja & Sons vs. The Board of Revenue and others reported in (1986) 61 STC 393 wherein the Division Bench of this Court after considering the provisions of Income Tax Act particularly, under Section 27(1)(c) in the matter arising out of Rajasthan Sales Tax Act, 1994 held that the penalty under Section 16(1)(e) of the Sales Tax Act can be imposed in a case where there is a conscious concealment of particulars or there is a deliberate furnishing of inaccurate particulars in the return submitted by the assessee. The Division Bench held that mere non-disclosure of a great magnitude of a transaction is not such a circumstance by itself which should undoubtedly lead to the conclusion that there was a real intention on the part of the assessee to conceal the sales. The finding in the assessment proceeding in respect of the disputed turnover (in the said case) may be evidence in the penalty proceedings but it cannot be conclusive for imposing penalty. The Division Bench also held that the entire circumstances should be considered and positive findings should be recorded either that there was a conscious concealment of particulars in the return or the dealer has deliberately furnished inaccurate particulars therein. Emphasis of learned counsel for the assessee is on the 17 observation of the Division Bench of this Court where the Division Bench took note of the fact that prior to the completion of the assessment of the assessee, the assessee voluntarily filed revised trading account and return in which the turnover involving a huge amount that was detected as concealed was shown. According to learned counsel for the respondent, the view taken by the Division Bench of this Court after considering several earlier judgments, hold field till today as is clear from the various judgments relied upon by learned counsel for the respondent. In Murarilal's case (supra), the judgment of Hon'ble Apex Court delivered in the case of Commissioner of Income Tax vs. Anwar Ali reported in (1970) 76 ITR 696 (SC) was also considered. The Hon'ble Apex Court in Anwar Ali's case (supra) clearly held that before penalty can be imposed, the entirety of the circumstances must reasonably point to the conclusion that the disputed amount represented income and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars. Anwar Ali's case (supra) was followed in the case of Anantharam Veerasinghaiah & Co. vs. Commissioner of Income-tax reported in (1980) 123 ITR 457 (SC) and it has been held by the Hon'ble Apex Court that it is now settled law that an order imposing a penalty is the result of quasi-criminal proceedings and 18 that the burden lies on the revenue to establish that the disputed amount represents income and that the assessee has consciously concealed the particulars of his income or has deliberately furnished inaccurate particulars. The Hon'ble Apex Court also held that it is for the revenue to prove those ingredients before a penalty can be imposed. After considering the various judgments on the point including Anwar Ali's case (supra), the Division Bench of this Court in Murarilal's case (supra) remanded the matter back to the lower authority with a direction to examine the question whether the concealment was not conscious or that the assessee had not deliberately furnished inaccurate particulars of his income in the light of the decisions referred in the judgment. In the light of the above judgments and in view of the fact that the said position on the point of law holds the field even today, it is clear that (1) imposing of penalty is result of quasi criminal proceedings, (2) burden lies upon revenue to establish : (a) the assessee has consciously conceal the particulars from returns furnished by him or, (b) has deliberately furnished inaccurate particulars in the return. In none of the judgments relied upon by the learned counsel for the assessee, it has been held that the entries in books of account of relevant sale of 19 goods is conclusive proof against the department's case of conscious concealment of particulars or deliberate furnishing inaccurate particulars by the assessee where the asessee himself has submitted inaccurate particulars or has concealed the particulars in the returns. In admitted case of concealment of particulars in the return and furnishing inaccurate particulars, fact of non-mentioning of particulars or wrong particulars in the returns stand proved by the admission of the assessee. Giving wrong particulars or not giving of particulars in return is a question of fact and can be proved from documents and from admission of assessee. In case, the assessee furnishes revised returns, it may be an admitted case falling in either of the two categories ; furnishing of wrong particulars or concealment of particulars by assessee. This fact or admission itself is no proof of assessee's “deliberate” or “willful