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Jharkhand High Court · body

2018 DIGILAW 2286 (JHR)

Tata Steel Limited v. State of Jharkhand

2018-10-22

AMITAV K.GUPTA, D.N.PATEL

body2018
ORDER : D.N. Patel, J. 1. Here, in this case questions involved are: Whether penalty can be levied, on the amount for which claim of assessee was not allowed, by Assessing Authority? Or Whether rejection of claim of an assessee is a concealment of turnover? Or Whether rejection of claim of an assessee, tantamounts to supply of incorrect statement of turnover or can be said that to that extent, incorrect particulars of sales or purchases were supplied by the assessee? Or Whether penalty can be imposed, upon the assessee, for his rejection of claim, treating that, to that extent, there was incorrect supply of figures of sales? 2. This Writ Petition has been preferred challenging the order passed by the Commercial Taxes Tribunal, Ranchi dated 4th November, 2009 (Annexure-11) as well as the order of imposition of penalty dated th February, 1994 (Annexure-9) and for quashing and setting aside the order passed by the Appellate Authority dated 30th July, 1996, whereby, order of penalty passed by the Assessing Authority was confirmed (Annexure-10) and for quashing and setting aside the notice by which the petitioner has been asked to deposit the amount of penalty upon dismissal of the its case by the Deputy Commissioner of Commercial Taxes, Jamshedpur (Annexure-18). 3. Factual Matrix: ? M/s. Indian Tube Company Limited was merged with the petitioner by the order of the Hon'ble Calcutta High Court. Indian Tube Company Limited had its manufacturing unit at Jamshedpur and depots in various States of India. ? M/s Indian Tube Company Limited was manufacturing galvanized tubes. Here in this matter, we are concerned with the assessment year 1977-78. The petitioner was engaged in intra-State sale, inter-State sale and sale outside the State (after stock transfer to another State). ? Return was filed for the assessment year 1977-78 (Annexure-1 to the memo of this Writ Petition). The exact figure of sale outside the State (stock transfer) was not mentioned in annual return. Revised return was filed on 11th March, 1983 (Annexure-2), wherein, stock transfer of the goods amounting to Rs.17,13,84,949/- was mentioned. ? Before assessment order was passed, show-cause notice was issued under Section 20(1)(b) of the Bihar Finance Act, 1981 to be read with Section 9(2) of the Central Sales Tax Act, 1956 on 31st December, 1985 alleging that the aforesaid total turnover of Rs.17,13,84,949/- was not stock transfer, but, it is inter-State sale. ? ? Before assessment order was passed, show-cause notice was issued under Section 20(1)(b) of the Bihar Finance Act, 1981 to be read with Section 9(2) of the Central Sales Tax Act, 1956 on 31st December, 1985 alleging that the aforesaid total turnover of Rs.17,13,84,949/- was not stock transfer, but, it is inter-State sale. ? Reply of the show-cause notice was given by the petitioner and explained that Central Sales Tax declaration Form-'F' was filed in support of the claim along with reconciliation between the transfer value and the actual sale price. The reply given by the petitioner is dated 18th January, 1986 (Annexure-4). ? Before the final assessment order was passed, the Deputy Commissioner of Commercial Taxes, Jamshedpur Division, Jamshedpur has imposed penalty under Section 20(1)(b) of the Bihar Finance Act, 1981 for Rs.2,74,21,591.84/- Paise. This order of Deputy Commissioner of Commercial Taxes is dated 24th January, 1986 (Annexure-5). ? Being aggrieved and feeling dissatisfied by the aforesaid order of penalty, the petitioner preferred an appeal before the Joint Commissioner of Commercial Taxes (Appeals), Jamshedpur. The Appellate Authority dismissed the appeal preferred by the petitioner vide order dated 30th May, 1986. ? Being aggrieved and feeling dissatisfied by the aforesaid order of Joint Commissioner of Commercial Taxes (Appeals), Jamshedpur, revision application was preferred before the Commercial Taxes Tribunal, Bihar, Patna. The revision application preferred by the petitioner was allowed and the order of penalty (dated 24th January, 1986) was set aside and the appellate order (dated 30th May, 1986) was also set aside. The matter was remanded with observation in paragraph 13, which reads as under: “13. The facts involved in this case will indicate that the transactions had been shown alright and the only question of dispute arose as to whether that particular transaction was Inter-state or by way of stock transfer and then sale made in the concerned States. While disposing of this issue it has to be considered that the transactions were backed by form 'F' and, as a matter of fact, Sales Tax had been paid in the respective States. That being so the transactions had not been concealed at all. Under the circumstances, to me it appears that simply because a mistake has been corrected by filing the revised return which is a creation of statute, no adverse inference can be drawn as it has been done in this case.” (emphasis supplied) ? That being so the transactions had not been concealed at all. Under the circumstances, to me it appears that simply because a mistake has been corrected by filing the revised return which is a creation of statute, no adverse inference can be drawn as it has been done in this case.” (emphasis supplied) ? Now, fresh order of penalty was passed by the Deputy Commissioner of Commercial Taxes, Jamshedpur vide order dated 20th July, 1989 and again penalty was imposed upon entire amount. ? Against the aforesaid order, an appeal was preferred by the petitioner, which was dismissed by the Joint Commissioner of Commercial Taxes (Appeals) vide order dated 27th June, 1990. ? Against the aforesaid order, a revision application was preferred by the petitioner before the Commercial Taxes Tribunal, Bihar, Patna. The Tribunal has quashed and set aside the order of penalty dated 20th July, 1989 as well as the appellate order dated 27th June, 1990 with following observation in paragraph 24 of its order dated 28th February, 1992, which reads as under:- “24. In the result, the cases are sent back to the learned assessing officer to be taken up and completed after the true nature of the transactions of the alleged sales from stock yards are determined after looking into documents and evidence to be produced by the petitioner in course of examination of accounts i.e. proceeding in the department.” (emphasis supplied) ? Thus, before the final assessment order was passed for the assessment year 1977-78, once again the order of penalty (dated 20th July, 1989) was passed by the Deputy Commissioner of Commercial Taxes. While allowing revision application, the order of penalty had been quashed and set aside and the matter was remanded by the Commercial Taxes Tribunal. ? Upon revised return filed by the petitioner for the assessment year 1977-78, the order of assessment was passed by the Assessing Officer under the Central Sales Tax Act. By virtue of this assessment order, entire claim of stock transfer was rejected. The assessment order was passed on 5th February, 1986. ? Against this assessment order, an appeal was preferred by the petitioner, which was also dismissed by the Joint Commissioner of Commercial Taxes (Appeal), Central Division, Patna vide order dated 11th May, 1987. ? By virtue of this assessment order, entire claim of stock transfer was rejected. The assessment order was passed on 5th February, 1986. ? Against this assessment order, an appeal was preferred by the petitioner, which was also dismissed by the Joint Commissioner of Commercial Taxes (Appeal), Central Division, Patna vide order dated 11th May, 1987. ? Against the aforesaid orders dated 5th February, 1986 as well as 11th May, 1987, the petitioner preferred a revision application before the Commercial Taxes Tribunal, Bihar, Patna. The Commercial Taxes Tribunal allowed the revision application by quashing and setting aside the order of assessment dated 5th February, 1986 as well as appellate order dated 11th May, 1987. The order of Commercial Taxes Tribunal, Bihar, Patna is dated 10th February, 1988, which is at Annexure-8. Paragraphs 13, 17 and 18 of the Tribunal's order dated 10th February, 1988 read as under: “13. Of course, it has been fully established by the documents produced before this Tribunal that the petitioner had paid sales tax for the transactions of sale outside the State and also there appears to be registration certificate indicating registration of the Tube Company in those States. Over all these documents Form 'F' in support of claims of stock transfer had also been filed and it appears that no adverse inference has been drawn by the learned assessing authority. There appears to be also documents with the petitioner in support of the fact of the movement of goods from the works at Jamshedpur to the stock yards. 17. In this view of the matter, I have no hesitation in saying that the assertion of the petitioner that sale made outside State was not backed by pre-existing contract or against a specific order and that has not been fully adjudicated on the basis of the papers and documents and apparently there being non-consideration and mis-consideration of these facts, both by the learned assessing officer and the learned appellate court, there is absolutely no alternative but to remand back the case to the learned assessing officer to consider all the documents produced on behalf of the petitioner and thereafter pass any order afresh. 18. 18. It may be appreciated that after all the petitioner has paid the tax in the different States and that being so in order to accept the contention of the department for treating those transactions as inter-State sale there should be proper adjudication of the issue in the light of the claim and counter claim of the two parties being the petitioner and the department.” (emphasis supplied) ? The matter was remanded with aforesaid observations by the Tribunal for passing a fresh order of assessment. ? Re-assessment order was passed by the Assessing Officer for the assessment year 1977-78 on 8th December, 1989 and again the stock transfer was not accepted and it was treated as inter-State sale. ? An appeal was preferred by the petitioner against the order of assessment dated 8th December, 1989. Form-'F' and other documents were produced and, hence, the Appellate Authority remanded the matter by quashing the assessment order dated 8th December, 1989 to appreciate Form-'F' as well as Challans etc. The appellate order is dated 28th March, 1990. ? Now third time, assessment order was passed for the assessment year 1977-78 on 26th March, 1992. During this third order of assessment, out of the total claim of the petitioner, so far as stock transfer is concerned, which was Rs.17,13,84,949/-, for whole claim, Form-'F' were produced as required under Section 6A of the Central Sales Tax Act, 1956 to be read with Rule 12(5) of the Central Sales Tax (Registration and Turnover) Rules, 1957. ? Against the claim of Rs.17,13,84,949/-, though Form-'F' was produced for the aforesaid whole transaction, but, Challans could not be produced for Rs.4,27,49,662/- and, hence, the claim of stock transfer was not allowed to the extent of Rs.4,27,49,662/-. The claim of Rs.12,86,33,287/- as a stock transfer or the claim of sale outside the State was allowed, because “Form-'F' and all the Challans” were produced for Rs.12,86,33,287/-. ? The tax @ 8% upon turnover of Rs.4,27,49,662/- was paid. ? Now, the Assessing Authority has also passed an order dated 18th February, 1994 imposing penalty under Section 20(1)(b) of the Bihar Finance Act, 1981, which was the double amount of tax. The amount of tax was levied upon Rs.4,27,49,662/-. This amount of tax has already been paid, but, double amount of tax was assessed as penalty. Thus, total penalty amount comes to Rs.68,39,946/-. The amount of tax was levied upon Rs.4,27,49,662/-. This amount of tax has already been paid, but, double amount of tax was assessed as penalty. Thus, total penalty amount comes to Rs.68,39,946/-. This order of penalty is dated 18th February, 1994 (Annexure-9 to the memo of this Writ Petition), which is under challenge in this Writ Petition. ? An appeal was preferred by the petitioner against the order of penalty and the Appellate Authority dismissed the appeal vide order dated 30th July, 1996 (Annexure-10 to the memo of this Writ Petition), which is also under challenge in this Writ Petition. ? Against the aforesaid order of penalty dated 18th February, 1994 and Appellate Authority's order dated 30th July, 1996, a revision application was preferred by the petitioner before the Commercial Tax Tribunal, Ranchi which was dismissed by the Tribunal vide order dated 4th November, 2009 (Annexure-11 to the memo of this Writ Petition). This order is also under challenge in this Writ Petition mainly on the ground that there is no concealment by the petitioner in giving details of the stock transfer in the revised return, filed by the petitioner for the assessment year 1977-78 -dated 11th March, 1983 (Annexure-2) for which Form-'F' was produced for whole claim, whereas, Challans could not be produced as the matter was of the year 1977-78. Three times, the matter was remanded by the Tribunal so far as by quashing the order of penalty and twice it was remanded for passing the order of assessment and, therefore, partly the claim of stock transfer or sale outside the State was not allowed for the turnover of Rs.4,27,49,662/-. Thus, there can be rejection of the claim of the petitioner by the Assessing Officer, but, that does not mean that it tantamounts to perse concealment nor it can be said to be suppressed turnover not it can be labelled as concealed turnover and no incorrect particulars were given by the petitioner. The claim of the petitioner, out of total amount of Rs.17,13,84,949/-, was allowed to the extent of Rs.12,86,33,287/-and rejected for Rs.4,27,49,662/- only because Challans could not be produced by the petitioner. The claim of the petitioner, out of total amount of Rs.17,13,84,949/-, was allowed to the extent of Rs.12,86,33,287/-and rejected for Rs.4,27,49,662/- only because Challans could not be produced by the petitioner. The rejection of the claim has been treated as concealment, by the Appellate Authority as well as by the Tribunal and the orders of penalty passed by the Assessing Officer, by the Appellate Authority and by the Revisional Authority, which are at Annexures-9, 10 and 11 respectively, are under challenge in this writ petition and consequent notice of demand, which is at Annexure-18 is also under challenge in this Writ Petition. Reasons: 4. Having heard learned counsels for both the sides and looking to the facts and circumstances of the case, it appears that: (i) In this Writ Petition, we are concerned with the assessment year 1977-78. The petitioner is having intra-State sale, inter-State sale and there is stock transfer also, which is meant for sale outside the State of the items-galvanised tubes manufactured by the petitioner. (ii) Regular return was filed which is at Annexure-1 to the memo of the Writ Petition. At the relevant time, total figure of stock transfer could not be collected and, hence, later on revised return was filed on 11th March, 1983 (Annexure-2 to the memo of the Writ Petition), wherein, sale of goods outside the State was mentioned at Rs.17,13,84,949/-. Upon this amount, neither the State Sales Tax is leviable nor the Central Sales Tax is leviable because same owner is transferring its goods from the place of manufacturing (from one State) to its stock yard (which is situated in another State or States). (iii) Looking to the provisions of the Central Sales Tax Act, 1956 especially Section 6A thereof, there is presumption that whenever there is movement of goods from one State to another State unless otherwise proved, it shall be presumed to be inter-State sale. Thus, the assessee, who is claiming that there is stock transfer, then his claim has to be proved with the help of Form-'F' along with Challans. Form-'F' and Challans are mentioned under Section 6 A of the Central Sales Tax Act, 1956 to be read with Rule 12(5) of the Central Sales Tax (Registration and Turnover) Rules, 1957. Thus, the assessee, who is claiming that there is stock transfer, then his claim has to be proved with the help of Form-'F' along with Challans. Form-'F' and Challans are mentioned under Section 6 A of the Central Sales Tax Act, 1956 to be read with Rule 12(5) of the Central Sales Tax (Registration and Turnover) Rules, 1957. Under Section 30 of the Bihar Finance Act, 1981 to be read with Rule 15(6) of Bihar Sales Tax Rules, 1983, the documents are to be maintained by the assessee. Thus, the presumption under Section 6A of the Central Sales Tax Act is rebuttable presumption and the burden of proof is upon the assessee. (iv) In exercise of claiming turnover of Rs.17,13,84,949/-as a stock transfer, necessary proof of “Form-'F' along with several Challans” were given. (v) Prior to the assessment order was passed for the assessment year 1977-78, show-cause notice was issued by the respondents under Section 20(1)(b) of the Bihar Finance Act, 1981 on 31st December, 1985 that the petitioner has wrongly claimed inter-State sale as a stock transfer and why penalty should not be levied from the petitioner and ultimately the order was passed by the Deputy Commissioner of Commercial Taxes on 24th January, 1986 levying penalty of Rs.2,74,21,591-84 Paise (Annexure-5), despite reply was given by the petitioner dated 18th January, 1986, wherein, there was declaration of Form-'F' along with reconciliation between transfer value and actual sale price (the reply of the petitioner is at Annexure-4). (vi) Without appreciating Form-'F' and various Challans, order of penalty was passed and, hence, an appeal was preferred by the petitioner before the Joint Commissioner of Commercial Taxes (Appeals), Jamshedpur. This appeal was dismissed vide order dated 30th May, 1986 against which, a revision application was preferred by the petitioner before the Commercial Taxes Tribunal, Bihar, Patna. This revision application was allowed and the order of penalty as well as order of Appellate Authority were quashed and set aside by the Commercial Taxes Tribunal vide order dated 4th December, 1987 with the observation in paragraph 13 of the order, which reads as under:- “13. The facts involved in this case will indicate that the transactions had been shown alright and the only question of dispute arose as to whether that particular transaction was Interstate or by way of stock transfer and then sale made in the concerned States. The facts involved in this case will indicate that the transactions had been shown alright and the only question of dispute arose as to whether that particular transaction was Interstate or by way of stock transfer and then sale made in the concerned States. While disposing of this issue it has to be considered that the transactions were backed by form 'F' and, as a matter of fact, Sales Tax had been paid in the respective States. That being so the transactions had not been concealed at all. Under the circumstances, to me it appears that simply because a mistake has been corrected by filing the revised return which is a creation of statute, no adverse inference can be drawn as it has been done in this case.” (emphasis supplied) In view of the aforesaid order passed by the Commercial Taxes Tribunal, the Assessing Authority as well as Appellate Authority had not appreciated the claim of the petitioner, which are supported by Form-'F' and, hence, the matter was remanded. (vii) Second round of litigation was started, so far as penalty is concerned. A fresh order of penalty was passed by the Deputy Commissioner of Commercial Taxes on 20th July, 1989 and again the claim of the petitioner was rejected by the Deputy Commissioner of Commercial Taxes. Neither there is concealment nor incorrect particulars have been given by the petitioner nor there is any suppressed turnover. Form-'F' is to be appreciated along with several Challans, but, second time also, the order of penalty was passed vide order dated 20th July, 1989, without appreciating Form-'F' and various Challans. (viii) Being aggrieved and feeling dissatisfied by the aforesaid order, the petitioner preferred an appeal before the Joint Commissioner of Commercial Taxes (Appeals), Jamshedpur. This appeal was dismissed vide order dated 27th June, 1990, against which, a revision application was preferred by the petitioner before the Commercial Taxes Tribunal, Bihar, Patna. This revision application was allowed by the Tribunal vide order dated 28th February, 1992. Paragraph 24 of the order passed by the Commercial Taxes Tribunal reads as under: “24. This appeal was dismissed vide order dated 27th June, 1990, against which, a revision application was preferred by the petitioner before the Commercial Taxes Tribunal, Bihar, Patna. This revision application was allowed by the Tribunal vide order dated 28th February, 1992. Paragraph 24 of the order passed by the Commercial Taxes Tribunal reads as under: “24. In the result, the cases are sent back to the learned assessing officer to be taken up and completed after the true nature of the transactions of the alleged sales from stock yards are determined after looking into documents and evidence to be produced by the petitioner in course of examination of accounts i.e. proceeding in the department.” (emphasis supplied) In view of the aforesaid observation of the Tribunal, a direction was given to the Assessing Officer to appreciate the nature of transactions by examining the books of accounts and other evidences on record and if there is actual stock transfer, no question of penalty whatsoever arises. Thus, the matter was remanded. (ix) The aforesaid orders of penalty were passed under Section 20(1)(b) of the Bihar Finance Act, 1981 before the final order of assessment passed by the Assessing Officer for the assessment year 1977-78. Initially, the order of assessment was passed on 5th February, 1986, whereby, entire claim of stock transfer was rejected. Against this order of assessment, an appeal was preferred by the petitioner before the Joint Commissioner of Commercial Taxes (Appeals), Central Division, Patna. The appeal of the petitioner against the order of assessment was dismissed vide order dated 11th May, 1987. Against these two orders viz. assessment order dated 5th February, 1986 and appellate order dated 11th May, 1987, a revision application was preferred before the Commercial Taxes Tribunal, Bihar, Patna. This revision application was allowed by the Tribunal vide order dated 10th February, 1988 and the order of assessment dated 5th February, 1986 was quashed and set aside. Consequently, the order of Appellate Authority dated 11th May, 1987 was also quashed and set aside with the observation in paragraphs 13, 17 and 18, which read as under: “13. Of course, it has been fully established by the documents produced before this Tribunal that the petitioner had paid sales tax for the transactions of sale outside the State and also there appears to be registration certificate indicating registration of the Tube Company in those States. Of course, it has been fully established by the documents produced before this Tribunal that the petitioner had paid sales tax for the transactions of sale outside the State and also there appears to be registration certificate indicating registration of the Tube Company in those States. Over a these documents Form 'F' in support of claims of stock transfer had also been filed and it appears that no adverse inference has been drawn by the learned assessing authority. There appears to be also documents with the petitioner in support of the fact of the movement of goods from the works at Jamshedpur to the stock yards. 17. In this view of the matter, I have no hesitation in saying that the assertion of the petitioner that sale made outside State was not backed by pre-existing contract or against a specific order and that has not been fully adjudicated on the basis of the papers and documents and apparently there being non-consideration and mis-consideration of these facts, both by the learned assessing-officer and the learned appellate court, there is absolutely no alternative but to remand back the case to the learned assessing-officer to consider all the documents produced on behalf of the petitioner and thereafter pass any order afresh. 18. It may be appreciated that after all the petitioner has paid the tax in the different States and that being so in order to accept the contention of the department for treating those transactions as inter-State sale there should be proper adjudication of the issue in the light of the claim and counter claim of the two parties being the petitioner and the department.” (emphasis supplied) In view of the aforesaid observations, the matter was remanded to the Assessing Officer. (x) A fresh order of assessment was passed by the Assessing Officer for the assessment year 1977-78 on 8th December, 1989 and again the claim of the petitioner for stock transfer was not allowed and, hence, an appeal was preferred by the petitioner against second order of assessment/re-assessment before the Appellate Authority. Form-'F' along with Challans were produced and, hence, the appeal preferred by the petitioner was allowed and the matter was remanded for passing order of assessment. Form-'F' along with Challans were produced and, hence, the appeal preferred by the petitioner was allowed and the matter was remanded for passing order of assessment. (xi) Now third order of assessment was passed on 26th March, 1992 by the Assessing Officer for the assessment year 1977-78 and all the Form-'F' along with Challans, which were produced by the petitioner, were verified. After verification of the evidences on record, total claim of stock transfer or sale outside the State, which was at Rs.17,13,84,949/-, was allowed to the extent of Rs.12,86,33,287/-. Form-'F' was produced for whole amount of Rs.17,13,84,949/-, but, Challans could not be produced for transaction value at Rs.4,27,49,662/-because the matter was of the year 1977-78 and, hence, to that extent the claim of the petitioner was rejected. Meaning thereby to, presumption under 1st proviso to Section 6A(1) of the Central Sales Tax Act is not made operative, only for Rs.4,27,49,662/-. This much part of turnover, though it was by way of stock transfer and though Form-'F' was produced even for the amount of Rs.4,27,49,662/-, but, as the Challans could not be produced, this amount of Rs.4,27,49,662/-is treated as inter-State sale. Upon this amount, Central Sales Tax is levied @ 8%, which is paid by the petitioner. (xii) Now, the question to be decided in this Writ Petition is only about penalty. Whether penalty under Section 20(1)(b) of the Bihar Finance Act, 1981 is leviable or not? (xiii) For the ready reference, Section 20 of the Bihar Finance Act, 1981 reads as under:- “20. Escaped turnover detected before assessment – (1) If the prescribed authority in the course of any proceeding or otherwise under this part is satisfied that any registered dealer or a dealer to whom grant of registration certificate has been refused under the third provision to sub-section (2) of Section 14. Escaped turnover detected before assessment – (1) If the prescribed authority in the course of any proceeding or otherwise under this part is satisfied that any registered dealer or a dealer to whom grant of registration certificate has been refused under the third provision to sub-section (2) of Section 14. (a) has concealed any sales or purchases or any particulars thereof, with a view to reduce the amount of tax payable by him under this part, or (b) has furnished incorrect statement of his turnover or incorrect particulars of his sales or purchases in the return furnished under sub-section (1) of Section 16 or otherwise, the prescribed authority shall, after giving such a dealer an opportunity of being heard in the manner prescribed, by an order in writing direct that he shall in addition to any tax which is or may be assessed under Section 17, pay by way of penalty, in a case falling in clause (a), sum not exceeding three times but not less than an amount equal to the amount of tax and in a case falling in clause (b) a sum not exceeding two times but not less than an amount equal to the amount of tax on the suppressed turnover or on concealed or incorrect particulars. (2) The penalty under sub-section (1) may be imposed before completion of assessment, and for determining the amount of penalty; the prescribed authority may quantify the amount of tax provisionally in the prescribed manner. (3) Any penalty imposed under sub-section (1) shall be without any prejudice to any action which is or may be taken under Section 49.” (emphasis supplied) (xiv) In view of the aforesaid provisions, initially show-cause notice was given by the respondent-State dated 31st December, 1985 (Annexure-3), which was replied by the petitioner on 18th January, 1986 (Annexure-4) and without appreciating Form-'F' and Challans, penalty was imposed vide order dated 24th January, 1986 (Annexure-5), which was later on quashed and set aside by the order of Tribunal dated 4th December, 1987 (Annexure-6). Second time, order of penalty was passed on 20th July, 1989. Again this order of penalty was quashed and set aside by the Tribunal vide order dated 28th February, 1992 (Annexure-7). Even the assessment order passed by the Assessing Officer dated 5th February, 1986 was quashed and set aside by the Tribunal vide order dated 10th February, 1988 (Annexure-8). Second time, order of penalty was passed on 20th July, 1989. Again this order of penalty was quashed and set aside by the Tribunal vide order dated 28th February, 1992 (Annexure-7). Even the assessment order passed by the Assessing Officer dated 5th February, 1986 was quashed and set aside by the Tribunal vide order dated 10th February, 1988 (Annexure-8). Second time, order of assessment passed on 8th December, 1989 was quashed and set aside by the Appellate Authority vide order dated 28th March, 1990 and third time, the order of assessment was passed for the assessment year 1977-78 on 26th March, 1992 and now out of total claim of Rs.17,13,84,949/-, what was allowed by way of stock transfer, on the basis of evidence on record, was turnover of Rs.12,86,33,287/- and the claim of stock transfer was rejected for the turnover of Rs.4,27,49,662/-. Now, the question raised before this Court whether the penalty can be levied on the ground that incorrect statement of turnover was furnished by the petitioner in the revised return dated 11th March, 1983, which is at Annexure-2 to the memo of the Writ Petition. (xv) It ought to be kept in mind by the Assessing Authority that every rejection of claim of the assessee is not a concealment. The claim of stock transfer mentioned in the revised return at Annexure-2 was at Rs.17,13,84,949/-. This amount has been maintained as it is, by both sides i.e. by the petitioner as well as by the respondent-Assessing Authority. This figure has never been challenged, even by the respondent-State, which is mentioned in the revised return (Annexure-2). For increase in this figure, no notice has ever been given by the respondent-State. It is not a case of the respondent-State that the figure of stock transfer-turnover mentioned in the revised return at Rs.17,13,84,949/- was an incorrect figure. (xvi) It happens that any one or two claims of assessee might have not been accepted, but, that does not mean that there was concealment of turnover. Concealment of turnover cannot be presumed, merely because, the claim of the assessee is rejected by the Assessing Authority. (xvii) In the facts of the present case, from the very beginning, the case of the petitioner is for stock transfer of Rs.17,13,84,949/-. It took lot of time by the respondent-Government to understand the transfer of stock by the Assessing Authority. Concealment of turnover cannot be presumed, merely because, the claim of the assessee is rejected by the Assessing Authority. (xvii) In the facts of the present case, from the very beginning, the case of the petitioner is for stock transfer of Rs.17,13,84,949/-. It took lot of time by the respondent-Government to understand the transfer of stock by the Assessing Authority. On two to three occasions, the matter was remanded. Form-'F', which were produced for Rs.17,13,84,949/- were never appreciated. Lastly, after remand of the matter for several times, it was first time appreciated vide order dated 26th March, 1992 when third time order of assessment was passed for the assessment year 1977-78. Thus, the claim of the petitioner of stock transfer was allowed by approximately 75% on the basis of evidences on record, which are of the nature of Form-'F' to be read with Challans. Form-'F' and Challans are referred under Section 6A of the Central Sales Tax Act, 1956 to be read with Rule 12(5) of the Central Sales Tax (Registration and Turnover) Rules, 1957 and these documents are to be maintained by the assessee under Section 30 of the Bihar Finance Act, 1981 to be read with Rule 15(6) of the Bihar Sales Tax Rules, 1983. Whenever any claim of the assessee is rejected, it cannot be presumed by the State authority that there was concealment of turnover nor the State authority can presume that incorrect statement of turnover was given by the assessee in his/its annual return. (xviii) In the facts of the present case, total turnover by way of stock transfer or by way of sale outside the State was mentioned at Rs.17,13,84,949/-in the revised return at Annexure-2 dated 11th March, 1983. This figure has been accepted as it is by the State. It is not a case of the respondent-State that there is concealment of the turnover by this assessee-petitioner. This figure has been accepted as it is by the State. It is not a case of the respondent-State that there is concealment of the turnover by this assessee-petitioner. Incidentally, there was no proof with this assessee, over and above Form-'F', in the form of “Challans”, for Rs.4,27,49,662/-and, hence, for this much amount, presumption will come in force that it is an inter-State sale and, hence, tax @ 8% has to be paid, which is already paid by the petitioner, but, so far as penalty is concerned, no penalty is leviable from the petitioner because neither there is concealment of turnover by the petitioner nor the petitioner has furnished incorrect statement of its turnover nor there is any suppression of turnover by the petitioner. Rejection of the claim depends upon the evidences given by the assessee and appreciation of the evidence by the Assessing Officer. Every rejection of claim is not a concealment of turnover. Every rejection of claim does not tantamount to supply of incorrect particulars of sales. Hence for every rejection of claim, penalty cannot be levied under Section 20 of the Bihar Finance Act, 1981. (xix) It has been held by the Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts (P) Ltd., reported in (2010) 11 SCC 762 , in paragraphs 16, 18, 20 and 21, which read as under: “16. However, it must be pointed out that in Union of India v. Dharamendra Textile Processors no fault was found with the reasoning in the decision in Dilip N. Shroff v. CIT where the Court explained the meaning of the terms “conceal” and “inaccurate”. It was only the ultimate inference in Dilip N. Shroff v. CIT to the effect that mens rea was an essential ingredient for the penalty under Section 271(1)(c) that the decision in Dilip N. Shroff v. CIT was overruled. 18. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under Section 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such not being the case, there would be no question of inviting the penalty under Section 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to inaccurate particulars. 20. We do not agree, as the assessee had furnished all the details of its expenditure as we as income in its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under Section 271(1)(c). If we accept the contention of the Revenue then in case of every return where the claim made is not accepted by the assessing officer for any reason, the assessee will invite penalty under Section 271(1)(c). That is clearly not the intendment of the legislature. 21. In this behalf the observations of this Court made in Sree Krishna Electricals v. State of T.N. as regards the penalty are apposite. In the aforementioned decision which pertained to the penalty proceedings in the Tamil Nadu General Sales Tax Act, the Court had found that the authorities below had found that there were some incorrect statements made in the return. However, the said transactions were reflected in the accounts of the assessee. This Court, therefore, observed: (SCC p. 688, para 7) “7. So far as the question of penalty is concerned the items which were not included in the turnover were found incorporated in the appellant’s accounts books. Where certain items which are not included in the turnover are disclosed in the dealer’s own account books and the assessing authorities include these items in the dealer’s turnover disallowing the exemption penalty cannot be imposed. The penalty levied stands set aside.” The situation in the present case is still better as no fault has been found with the particulars submitted by the assessee in its return.” (emphasis supplied) In view of the aforesaid decision, the difference between “concealment” and “inaccuracy” in filing of the return has been mentioned. The penalty levied stands set aside.” The situation in the present case is still better as no fault has been found with the particulars submitted by the assessee in its return.” (emphasis supplied) In view of the aforesaid decision, the difference between “concealment” and “inaccuracy” in filing of the return has been mentioned. In the facts of the present case, there is even no inaccuracy in filing of the return (Annexure-2). The figure of stock transfer at Rs.17,13,84,949/- has been accepted even by the respondent-State. There is no variation in this figure. There is no allegation by the State that the figure of Rs.17,13,84,949/- is an incorrect disclosure of turnover by the petitioner. In the facts of the present case, the claim of the petitioner was not allowed only for the turnover at Rs.4,27,49,662/- because though Form-'F' was submitted, but, the Challans could not be submitted, because the matter was too old for the petitioner. The petitioner has already paid the tax @ 8% of the aforesaid amount. Thus in the facts of the present case, it cannot be said that as the claim of Rs.4,27,49,662/- was not allowed, penalty is leviable for this amount. Even though the claim is rejected by the respondents, no penalty is leviable because neither there is concealment of turnover by the petitioner in its revised return at Annexure-2 nor there is any inaccuracy in filing of the return by the assessee-petitioner. (xx) It has been held by the Hon'ble Supreme Court in the case of Sree Krishna Electricals v. State of T.N., reported in (2009) 11 SCC 687 , in paragraphs 4 and 7, which read as under:- “4. As regards the penalty the assessee took the stand that the penalty has been imposed mechanically and there was no warrant for it as the assessee had disclosed the turnover for which he had claimed exemption. The High Court was of the view that there was not complete disclosure and the fact that he had disclosed the sale of what he has termed as parts does not amount to full disclosure. The assessments made in the case of the assessee were in fact the best-judgment assessment which permitted the imposition of penalty. Accordingly the writ petitions were dismissed. 7. So far as the question of penalty is concerned the items which were not included in the turnover were found incorporated in the appellant’s accounts books. The assessments made in the case of the assessee were in fact the best-judgment assessment which permitted the imposition of penalty. Accordingly the writ petitions were dismissed. 7. So far as the question of penalty is concerned the items which were not included in the turnover were found incorporated in the appellant’s accounts books. Where certain items which are not included in the turnover are disclosed in the dealer’s own account books and the assessing authorities includes these items in the dealers’ turnover disallowing the exemption penalty cannot be imposed. The penalty levied stands set aside.” (emphasis supplied) In view of the aforesaid decision and looking to the revised return filed by the petitioner at Annexure-2, neither there is concealment of turnover by the petitioner nor there is incorrect statement of turnover given by the petitioner, so far as total stock transfer of turnover at Rs.17,13,84,949/-is concerned and, hence, no penalty is leviable under Section 20(1)(b) of the Bihar Finance Act, 1981. These aspects of the matter have not been properly appreciated by the Assessing Officer while passing the order of penalty dated 18th February, 1994 (Annexure-9) nor by the Appellate Authority while passing the order dated 30th July, 1996 (Annexure-10) nor by the Tribunal while passing the order dated 4th November, 2009 (Annexure-11) and, hence, all these orders deserve to be quashed and set aside. Consequently, the notice for demanding amount of penalty dated 13th April, 2010 (Annexure-18) also deserves to be quashed and set aside. (xxi) It has been held by the Hon'ble Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa, reported in 1969 (2) SCC 627 , in paragraph 8, which reads as under: “8. Under the Act penalty may be imposed for failure to register as a dealer - Section 9(1) read with Section 25(1)(a) of the Act. But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the Company in failing to register the Company as a dealer acted in the honest and genuine belief that the Company was not a dealer. Granting that they erred, no case for imposing penalty was made out.” (emphasis supplied) In view of the aforesaid decision and looking to the facts of the present case especially total turnover of the stock register mentioned in the revised return, which is at R s. 17,13,84,949/-, neither there is concealment of the turnover nor there is any incorrect disclosure of the turnover by the petitioner. Neither concealment nor any intention of concealment can be presumed on the part of the petitioner, merely because, part of the claim was rejected by the Assessing Officer. The rejection of the claim is one thing and concealment of turnover or to give incorrect statement of turnover in the annual return is altogether another thing. Otherwise, whenever there is partial rejection of the claim- in the assessment order, immediately double penalty is levied, mechanically by the Appellate Authority. This is not permissible in the eye of law. (xxii) It has been held by the Hon'ble Supreme Court in the case of Cement Marketing Co. of India Ltd. v. Asstt. CST, reported in (1980) 1 SCC 71, in paragraph 5, which reads as under: “5. The next question that arises for consideration is whether the Assistant Commissioner of Sales Tax was right in imposing penalty on the assessee for not showing the amount of freight as forming part of the taxable turnover in its returns. of India Ltd. v. Asstt. CST, reported in (1980) 1 SCC 71, in paragraph 5, which reads as under: “5. The next question that arises for consideration is whether the Assistant Commissioner of Sales Tax was right in imposing penalty on the assessee for not showing the amount of freight as forming part of the taxable turnover in its returns. The penalty was imposed under Section 43 of the Madhya Pradesh General Sales Tax Act, 1958 and Section 9 sub-section (2) of the Central Sales Tax Act, 1956 on the ground that the assessee had furnished false returns by not including the amount of freight in the taxable turnover disclosed in the returns. Now it is difficult to see how the assessee could be said to have filed “false” returns, when what the assessee did, namely, not including the amount of freight in the taxable turnover, was under a bona fide belief that the amount of freight did not form part of the sale price and was not includible in the taxable turnover. The contention of the assessee throughout was that on a proper construction of the definition of “sale price” in Section 2(o) of the Madhya Pradesh General Sales Tax Act, 1958 and Section 2(h) of the Central Sales Tax Act, 1956, amount of freight did not fall within the definition and was not liable to be included in the taxable turnover. This was the reason why the assessee did not include the amount of freight in the taxable turnover in the returns filed by it. Now, it cannot be said that this was a frivolous contention taken up merely for the purpose of avoiding liability to pay tax. It was a highly arguable contention which required serious consideration by the Court and the belief entertained by the assessee that it was not liable to include the amount of freight in the taxable turnover could not be said to be mala fide or unreasonable. What Section 43 of the Madhya Pradesh General Sales Tax Act, 1958 requires is that the assessee should have filed a “false” return and a return cannot be said to be ‘false’ unless there is an element of deliberateness in it. What Section 43 of the Madhya Pradesh General Sales Tax Act, 1958 requires is that the assessee should have filed a “false” return and a return cannot be said to be ‘false’ unless there is an element of deliberateness in it. It is possible that even where the incorrectness of the return is claimed to be due to want of care on the part of the assessee and there is no reasonable explanation forthcoming from the assessee for such want of care, the Court may, in a given case, infer deliberations and the return may be liable to be branded as a false return. But where the assessee does not include a particular Item in the taxable turnover under a bona fide belief that he is not liable so to include it, it would not be right to condemn the return as a “false” return inviting imposition of penalty. This view which is being taken by us is supported by the decision of this Court in Hindustan Steel Limited v. State of Orissa where it has been held that “even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute”. It is elementary that Section 43 of the Madhya Pradesh General Sales Tax Act, 1958 providing for imposition of penalty is penal in character and unless the filing of an inaccurate return is accompanied by a guilty mind, the section cannot be invoked for imposing penalty. If the view canvassed on behalf of the Revenue were accepted, the result would be that even if the assessee raises a bona fide contention that a particular item is not liable to be included in the taxable turnover, he would have to show it as forming part of the taxable turnover in his return and pay tax upon it on pain of being held liable for penalty in case his contention is ultimately found by the Court to be not acceptable. That surely could never have been intended by the legislature.” (emphasis supplied) In view of the aforesaid decision and also looking to the facts that total turnover mentioned by the petitioner by way of stock transfer in the revised return at Annexure-2 to the memo of this writ petition, which was filed on 11th March, 1983, neither there is concealment by the petitioner nor any suppression by the petitioner in giving total turnover in return nor there is any incorrect statement of turnover given by the petitioner in the annual return for the assessment year 1977-78. (xxiii) “Incorrect statement of turnover” given in the annual return cannot be presumed merely because part of the claim is rejected. If any assessee has given his turnover in the annual return and he is claiming that such turnover is not subjected to the tax and if the claim of the assessee is partly allowed or partly rejected, in such eventualities, penalty is not leviable. (xxiv) Much has been argued out by the learned counsel for the respondent-State that part of the claim is rejected by the respondents to the extent that there is incorrect disclosure of turnover in the annual return by the assessee-petitioner and, hence, penalty is leviable. We are not in agreement with the aforesaid contention raised by the learned counsel for the respondent-State mainly for the reasons that: (a) The disclosure of turnover for the stock transfer or towards sale outside the State, as mentioned in the revised return at Annexure-2 filed on 11th March, 1983, is at Rs.17,13,84,949/-. This figure was never questioned by the respondent authorities. (b) What is questioned by the respondents is the “proof of stock transfer”. The proof of stock transfer can be given by presenting Form-'F' as well as by presenting Challans. Form-'F' and Challans are to be presented under Section 6A of the Central Sales Tax Act, 1956 to be read with Rule 12(5) of the Central Sales Tax (Registration and Turnover) Rules, 1957. No notice has ever been given by the respondents to the petitioner that total turnover towards stock transfer, which was mentioned in the revised return at Rs.17,13,84,949/-, was a wrong disclosure of turnover. (c) Looking to the evidences on record, out of total amount of Rs.17,13,84,949/-, the claim of the petitioner was allowed for Rs.12,86,33,287/-. No notice has ever been given by the respondents to the petitioner that total turnover towards stock transfer, which was mentioned in the revised return at Rs.17,13,84,949/-, was a wrong disclosure of turnover. (c) Looking to the evidences on record, out of total amount of Rs.17,13,84,949/-, the claim of the petitioner was allowed for Rs.12,86,33,287/-. (d) The claim of Rs.4,27,49,662/-by way of stock transfer was disallowed, because, though Form-'F' were produced, but, Challans could not be produced for part of the claim, by assessee because the matter was much older in point of time i.e. for the assessment year 1977-78. Thus, rejection of the claim for Rs.4,27,49,662/- cannot be treated as incorrect filing of the turnover in the annual return nor it can be labelled as concealment of the turnover nor it can be labelled as suppression of the turnover. (e) The claim of the assessee may not be allowed by 100% by the Assessing Officer. Allowing the claim of the assessee depends upon the evidences on record and provisions of prevailing law, but, that does not mean that whenever partial claim of the assessee is rejected, mathematically or mechanically the penalty is leviable, much less, in the facts of the present case under Section 20(1)(b) of the Bihar Finance Act, 1981. (xxv) Learned counsel for the respondents has placed reliance upon following decisions reported in: ? (2018) 6 SCC 549 ; ? (2008) 13 SCC 369 ; ? (2006) 5 SCC 361 ; and ? (2009) 9 SCC 589 None of the aforesaid decisions are helpful to the respondents mainly for the reasons that: (a) In the facts of the present case, there is disclosure of turnover by way of stock transfer at Rs.17,13,84,949/- in the revised return. This figure was never challenged by the respondents. (b) Partly the claim of the petitioner was allowed to the extent of Rs.12,86,33,287/- and partly it was rejected for Rs.4,27,49,662/-. Upon this turnover, 8% Central Sales Tax is leviable, which is already paid by the petitioner, because of presumption under Section 6A of the Central Sales Tax Act, 1956. The Challans could not be produced, for Rs.4,27,49,662/- by the petitioner, though Form-'F', were produced for whole amount of Rs.17,13,84,949/-. (c) In the process of assessment, it happens that 100% claim of the assessee may not be allowed by the Assessing Officer. The Challans could not be produced, for Rs.4,27,49,662/- by the petitioner, though Form-'F', were produced for whole amount of Rs.17,13,84,949/-. (c) In the process of assessment, it happens that 100% claim of the assessee may not be allowed by the Assessing Officer. It may be partly allowed or partly rejected also, but, that does not mean that the amount for which the claim is rejected, the same shall be treated as concealed turnover or the same shall be treated as incorrect turnover given in the annual return. These facts of the present case make the present case different from the facts of the aforesaid decisions and, hence, aforesaid decisions are of no help to the respondents. 5. As a cumulative effect of the aforesaid facts, reasons and judicial pronouncements, we hereby allow this Writ Petition by quashing and setting aside the order passed by the Assessing Officer dated 18th February, 1994 (Annexure-9), by quashing and setting aside the order passed by the Appellate Authority dated 30th July, 1996 (Annexure-10) and by quashing and setting aside the order passed by the Commercial Taxes Tribunal, Ranchi vide order dated 4th November, 2009 (Annexure11). Consequently, notice issued by the respondents dated 13th April, 2010 (Annexure-18) for deposition of the amount of penalty is, hereby, also quashed and set aside. Hence, the amount deposited by the petitioner by way of penalty is ordered to be refunded. This amount shall be refunded within a period of eight weeks from the date of receipt of a copy of this order. 6. This Writ Petition is, therefore, allowed and disposed of.