Through Its Partner Shri Bharat Bhushan, Son Of Shri Makkhan v. Commercial Taxes Officer, Anti Evasion, Bharatpur

Through Its Partner Shri Bharat Bhushan Son Of Shri Makhan Lal, Aged 55 Years, Resident Of A-71, Ranjeet Nagar, Bharatpur (Rajasthan). Versus ----Petitioner Commercial Taxes Officer, Anti Evasion, Bharatpur. ----Respondent S.B. Sales Tax Revision / Reference No. 236/2024 M/s Shanti Industries, Resident G-38, Brij Industrial Area, Bharatpur Through Its Partner Shri Bharat Bhushan , Son Of Shri Makkhan Lal, Aged 55 Years, Resident Of A-71, Ranjeet Nagar, Bharatpur (Rajasthan). Versus ----Petitioner Commercial Taxes Officer, Anti Evasion, Bharatpur. ----Respondent S.B. Sales Tax Revision / Reference No. 237/2024 M/s Shanti Industires, G-38, Brij Industrial Area, Bharatpur Through Its Partner Shri Bharat Bhushan, Son Of Shri Makkhan Lal, Aged 55 Years, Resident Of A-71, Ranjeet Nagar, Bharatpur (Rajasthan) 321001 Versus ----Petitioner The Assistant Commissioner, Commercial Taxes, Anti Evasion, Bharatpur ----Respondent For Petitioner(s) : Mr. Alkesh Sharma. Mr. Yashasvi Sharma. For Respondent(s) : HON'BLE MR. JUSTICE ASHOK KUMAR JAIN Order 21/05/2025

1. These S.B. Sales Tax Revision Petitions were preferred by petitioner (Assessee) aggrieved from order dated [2025:RJ-JP:21908] (3 of 11) [STR-232/2024]

22.07.2024 in Appeals No.1043/2018/Bharatpur, 1044/ 2018/Bharatpur, 1046/2018/ Bharatpur, 1047/2018/ Bharatpur, 1048/2018/Bharatpur and 1045/2018/Bharatpur, passed by the Rajasthan Tax Board, Ajmer, whereby the appeals preferred preferred by the petitioner (Assessee), were dismissed. The appeals were filed under Section 83 of the Rajasthan Value Added Tax Act, 2003 (hereinafter referred as ‘the RVAT Act, 2003’) against order passed by the Appellate Authority, Commercial Taxes, Bharatpur, whereby a rectification application filed for rectification of previously passed order, was dismissed. Earlier, the Appellate Court has passed an order, whereby partially accepted the appeal(s) filed against order of CTO, Circle-Anti Evasion, Bharatpur under Section 9 of CST Act, 1956 read with Sections 26, 55, 61 of the RVAT Act, 2003.

2. All these Sales Tax/VAT Revision Petitions were preferred with a common subject raising a common substantial question of law, therefore, we are disposing all these revision petitions with a common order.

3. Learned counsel for the petitioner while relying upon order dated 08.02.2023 in S.B. Sales Tax Revision Petition No. 68/2022 and other related matters, submitted that in identical matters, a coordinate Bench of this Court has admitted the STRs by framing the following substantial question of law, which is as under:- “Whether under the facts and circumstances of the present case, the Rajasthan Tax Board, [2025:RJ-JP:21908] (4 of 11) [STR-232/2024] Ajmer was justified in remanding the case to the respondent Assistant Commissioner especially in view of the circumstances that the Rajasthan Tax Board, Ajmer itself at page 6 of the order has given a finding to the effect that the respondent Assistant Commissioner has not proved the ‘C’ forms submitted by the petitioner fabricated or false.”

4. He further referred the judgments in the case of The State of Madras vs. Radio & Electricals Ltd. and Anr.: (1996) 18 STC 222 (SC); Ultratech Cement Ltd. vs. CTO, Anti Evasion, Jodhpur & Anr.: (2016) 13 RGSTR 127 (RHC); State of Uttar Pradesh & Others vs. Aryaverth Chawal Udyog & Others : (2015) 17 SCC 324; Assistant Commissioner, Commercial Taxes, Special Circle-I, Jaipur & Anr. vs. M/s. Metro Appliances Ltd., Jaipur : S.B. Sales Tax Revision Petition No. 286/2005/4,5,16 and 29/2007 (decided on 04.10.2007); AGFA – Gavert India Ltd. vs. State of Tamil Nadu : (2013) 123 STC 108 (Mad.); Star Paper Mills Ltd. vs. Commissioner of Sales Tax, UP : (2005) 139 STC 245 (ALL); Sastha Enterprises vs. Appellate Authority, Commissioner, Chennai & Anr.: (2011) 37 VST 94 (Mad) and State of Gujarat vs. Delta Rubber & Plastic Products : (2016) 93 VST 511 (Guj) and submitted that the petitioner is effecting inter-State sale of mustard oil to dealers registered in the other States under their respective laws and after purchase of edible oil from petitioner on the basis of Form-C, issued by purchaser, the petitioner has sold the edible oil to [2025:RJ-JP:21908] (5 of 11) [STR-232/2024] them, but when these were submitted to CTO, Bharatpur, then on verification from 2008-09 to 2011-12, it has come to notice that the Form-C submitted by the petitioner were found unverified (bogus), therefore, the petitioner is liable to pay CST at full rate. After Show Cause Notice, an assessment was made in all cases, which was challenged before the Appellate Authority, but the appeals were dismissed.

5. Learned counsel has further referred the provision of law and submitted that the petitioner is bonafide manufacturer and trader and his liability is to sell edible oil after procuring Form-C provided to petitioner at the time of sale of goods. Learned counsel submits that as a trader and manufacturer, the petitioner has reasonably believe that these Forms are genuine and on the basis of genuineness, he sold the edible oil at concessional rates. He further submitted that the mischief was committed by the buyer (purchaser) and not by the petitioner and the petitioner cannot held liable for the act or mischief committed by the buyer. Learned counsel further submitted that the issues were agitated before the Rajasthan Tax Board, but the Board without considering the case of the petitioner, has dismissed the appeals. He also submitted that the petitioner is liable only when unverifiable or bogus forms were submitted by him to claim false deductions, therefore, the matter requires consideration on merits and same be admitted accordingly. [2025:RJ-JP:21908] (6 of 11) [STR-232/2024]

6. Heard learned counsel for the petitioner and perused the judgments as referred by learned counsel and also the material placed on record.

7. The controversy in these revision petitions pertain to sale of edible oil by the petitioner at concessional CST on submission of Form-C by the buyer or purchaser of other States. On verification, the Tax Assessing Authority has found that these Form-C were unverifiable or bogus and a notice was issued to the petitioner. Now, the petitioner has claimed that this is not his responsibility rather notice be issued to the buyer for submitting unverifiable or bogus Form-C to the petitioner.

8. We have considered the submissions of learned counsel for the petitioner and perused the three orders firstly by CTO, secondly by Appellate Authority and thirdly by Rajasthan Tax Board. The findings are concurrent in nature and all the three authorities have passed the orders, after opportunity of hearing to the petitioner.

9. Now, comes a question, whether the petitioner is liable to get exemption of tax on the basis of unverifiable or bogus Form-C allegedly submitted by the buyer (purchaser) to the petitioner at the time of purchase of edible oil from the petitioner. Essentially, the sale is made to the buyer (purchaser) having trade or business in other State. These forms were accepted by petitioner-firm and he submitted to claim exemptions. [2025:RJ-JP:21908] (7 of 11) [STR-232/2024]

10. Normally, business transactions are based on faith and trust of individual traders. If any trader indulged in inter-State trade and if he is selling or purchasing any goods from the trader of other State, then the duty lies upon him to remain vigilant and take all measures for due diligence about papers or forms handed over to him. If somebody (trader of other State) has given a false and fabricated document and acting on those documents, if some one acts, then the liability under the Criminal Law is of the person, who committed the crime, but under the Tax Law, the liability is of person, who was under an obligation to collect tax and on the basis of false Form, has given concession to a trader or businessman.

11. In the instant case, the petitioner is a Tax Assessee in Rajasthan and he sold the edible oil to traders of other States on the basis of Form-C and charged concessional rate(s) of CST, but to claim exemption, Form-C were submitted by the said traders, which later were submitted to the Tax Authority and the said Authority found that these Forms are bogus. In that eventuality, the liability of tax is upon the Assessee (present petitioner) and he cannot claim that he acted in a bonafide belief. The liability and collection of payment of tax in State of Rajasthan was upon the petitioner and at the time of sale, it is his duty to collect full amount of tax, but in the instant case, against the exemption, he has submitted bogus Form-C, therefore, the petitioner was found guilty of submission of bogus Form-C. [2025:RJ-JP:21908] (8 of 11) [STR-232/2024]

12. A Sales Tax Revision under Section 26 of the RET Act, 1999 read with Section 84 of the RVAT Act, 2003, is entertainable and admitted only on substantial question of law, therefore, it is necessary for this Court to formulate a substantial question of law. In case, any substantial question is not made out, then revision petition is not maintainable.

13. In case of Chandrabhan (Deceased) Through LRs and others vs. Saraswati and Others : 2022 SCC Online SC 1273, while considering the provision of Section 100 of CPC, Hon’ble Supreme Court has explained substantial question of law as debatable and not previously settled by law of land or not a mere question of law. A question of law having a material bearing on the decision of a case will be a substantial question of law, if it is not covered by any specific provision of law or settled legal principles emerging from binding precedents. A substantial question of law will also arise in a contrary situation, where the legal position is clear either on account of provision of law or binding precedents but the court below has decided the matter, either ignoring or acting contrary to such principle. The substantial question of law arises because the decision of court below was rendered on a material question, violated the settled position of law.

14. The definition of substantial question of law was also considered by Hon’ble Supreme Court in case of M. Janardhana Rao vs. Joint Commissioner of Income Tax (Appeal (Civil) No.4232/2003 order dated [2025:RJ-JP:21908] (9 of 11) [STR-232/2024]

28.01.2005) reported as AIR 2005 SC 1309, wherein a reliance has been placed in case of Sir Chunilal V. Mehta & Sons. Ltd. vs. Century Spinning and Manufacturing Co. Ltd.: AIR 1962 SC 1314 and Hon’ble Supreme Court laid down the following test to determine whether substantial question of law is involved. The test are:- (i) Whether directly or indirectly it affects substantial rights of the parties, or; (ii) The question is or general public importance, or; (iii) Whether it is an open question in the sense that issue is not settled by pronouncement of this court or Privy Council or by the federal court or; (iv) The issue is not free from difficulty, and (v) It calls for a discussion for alternative view.

15. To just the genuineness of the petitioner, no substantial question of law is made out. There is no material on record to show bonafide and genuineness of the petitioner. When there are series of transactions, then as a genuine trader, the duties lies upon the petitioner atleast to verify the Form- C, but he has not opted for due diligence and he is liable under the law to make payment of tax.

16. Learned counsel has referred judgments of Hon’ble Supreme Court in the case of State of Madras vs. Radio & Electricals Ltd. and Anr. (surpa), Ultratech Cement Ltd. vs. CTO, Anti Evasion, Jodhpur & Anr. (supra) and State of Uttar Pradesh & Others vs. Aryaverth Chawal Udyog & Others (supra), to show that the act of petitioner [2025:RJ-JP:21908] (10 of 11) [STR-232/2024] is a bonafide and the ground of bonafide or due diligence is a substantial question of law.

17. Learned counsel has also referred judgments in the case of Assistant Commissioner, Commercial Taxes, Special Circle-I, Jaipur & Anr. vs. M/s. Metro Appliances Ltd., Jaipur (supra), AGFA – Gavert India Ltd. vs. State of Tamil Nadu (supra), Star Paper Mills Ltd. vs. Commissioner of Sales Tax, UP (supra), Sastha Enterprises vs. Appellate Authority, Commissioner, Chennai & Anr. and State of Gujarat vs. Delta Rubber & Plastic Products, and submitted that for the mischief committed by a third party, this petitioner is not liable and he cannot be forced to pay tax, which was not recovered at the time of sale. He further referred a point that the petitioner acted in bonafide and on the basis of document submitted to him, he has a reason to believe and same is a substantial question of law.

18. Having considered the grounds as raised by learned counsel for the petitioner (Assessee), I am of the considered view that the transactions between the petitioner and the purchaser/buyer is a question of fact. The belief of petitioner that buyer/purchaser is a bonafide person is again a question of fact. Moreover, the document accepted by the petitioner to grant concession, so that buyer/purchaser have to pay less tax to the petitioner is again a question of fact. There is no ground to believe that these factual issues give rise to a substantial question of law. [2025:RJ-JP:21908] (11 of 11) [STR-232/2024]

19. If any Coordinate Bench has admitted any appeal, then it cannot create a precedent to admit all subsequent revision petitions, therefore, the judgments as referred by learned counsel are not applicable to help the petitioner.

20. Consequently, the Revision Petition Nos.232/2024, 233/2024, 234/2024, 235/2024, 236/2024 & 237/2024, are hereby dismissed with all pending application(s), if any. PKS/81-86 (ASHOK KUMAR JAIN),J