Pratap Krishna Lohra, J. - (1.) THE petitioner -assessee has preferred this revision petition under Section 84 of the Rajasthan Value Added Tax Act, 2003 (for short, 'Act of 2003') challenging the impugned order dated 22nd of May 2014 passed by learned Rajasthan Tax Board, Ajmer. By the order impugned, the learned Tax Board has allowed the second appeal of the revenue under Section 83 of the Act of 2003 and reversed the order of the first appellate authority Deputy Commissioner (Appeals), Commercial Taxes Department, Udaipur.
(2.) SUCCINCTLY stated, the facts of the case are that petitioner -assessee is a consignment agency of M/s. Essel Agro Private Limited, which is engaged in broadcasting services and for facilitating the same it supplies dish antenna, digital decoder etc. The petitioner -assessee entered into an agreement dated 20th April 2005 with M/s. Essel Agro and in terms of the agreement petitioner firm is provided goods by M/s. Essel Agro. As per the terms of the agreement, goods are provided to the petitioner only for utilization on right to use basis for which the petitioner is in receipt of commission. As per the version of the petitioner, goods are received under challans from M/s. Essel Agro with clear stipulation that goods are supplied against refundable security deposit for installation at customer premises on rental and not for sale. The petitioner, in turn, supplies these goods to various third parties by collecting refundable advance security deposit as also collecting applicable value added tax on lease rentals. The respondent revenue conducted investigation and recorded statements of certain dealers. On the strength of the materials collected during investigation and statements of dealers recorded, the respondent alleged that the petitioner had actually sold the goods to third parties. By taking into account the said transactions as sale, the respondent made attribution against petitioner of indulging in tax evasion and accordingly proposed that the security deposits collected by the petitioner should be made liable to VAT. In furtherance of the alleged incriminating material collected against the petitioner -assessee during investigation, a show cause notice dated 6th of September 2007 was issued to the petitioner. Petitioner submitted its reply to the show cause notice but same did not find favour from the respondent and the respondent -revenue concluded that the security deposits are liable to VAT and accordingly VAT was imposed upon the petitioner on such security deposits by treating them as sale consideration. That apart, penalty twice the amount of tax demanded was imposed on the petitioner -assessee. Feeling dismayed with the said order of the assessing authority, the petitioner laid an appeal before the Deputy Commissioner (Appeals), Commercial Taxes, Udaipur. The effort made by the petitioner -assessee proved productive and the appellate authority found that the petitioner received the goods against refundable security deposit and as such VAT is not leviable from it. The appellate authority has also noticed that the petitioner -assessee has not been afforded opportunity to cross -examine the dealers whose statements were used against it in gross violation of principles of natural justice and therefore assessment order is vitiated in law. While adverting to the order of the assessing authority for imposition of penalty, the learned first appellate authority recorded a definite finding that there is no evidence on record to show that assessee intended to evade the tax. While recording this affirmative finding, the first appellate authority has also thoroughly examined the books of accounts of assessee and eventually set aside the order of penalty.
(3.) FEELING disgruntled with the order of the first appellate authority, the respondent -revenue invoked the jurisdiction of second appeal, i.e. Tax Board, by preferring appeal under Section 83 of the Act of 2003. The second appellate authority, learned Tax Board, accepted the appeal of the respondent -revenue and set at naught the order passed by the first appellate authority, thereby maintaining order passed by the assessing authority.;