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2019 (11) TMI 609 - HC - VAT and Sales TaxDemand of penalty u/s 10-A of the Central Sales Tax Act, 1956 - Form-C - allegation against assessee of false declaration by making use of statutory Form-C issued under the Act to import packing material which item was first recorded in the registration certificate of the assessee on 09.07.2001 - Whether applicant is entitled to make purchase of packing material against Form-C in view of the provisions of Section 8(3)(d) of the Central Sales Tax Act? - HELD THAT:- Though it may not be denied that there existed an entitlement in law for the assessee to obtain registration with respect to packing material as the assessee was engaged in manufacture of 'beedi' - However, it is a fact that the assessee was granted inclusion of packing material in its registration certificate w.e.f. 09.07.2001. No penalty may have been levied for the period from 09.07.2001 to 31.03.2002 inasmuch as the assessee had been authorised to make purchase of packing material by virtue of its specific inclusion in its registration certificate - However, for the period prior to 09.07.2001, merely because there existed an entitlement in law to apply for inclusion of such packing material in the registration certificate, there cannot follow any inference that therefore, there was false declaration made by the assessee. Whether in view of the fact that the assessee had been similarly using Form-C in the earlier assessment years to import packing material which fact was in the knowledge of the assessing officer, there could ever arise a case of false declaration? - HELD THAT:- n the first place, allegation of false declaration involves an element of mens rea. It is wholly different from a mere wrong declaration. If the assessee uses Form-C to import packing material that were not recorded in its registration certificate, it may give rise to penalty proceedings, if that fact is noted in the first few instances of utilisation of Form-C. However, if such utilisation of Form-C is, as a fact found to be a business practice adopted over a long period of ten years, as has been claimed by the assessee, the conduct of the revenue authorities for such long period would become relevant. The revenue authorities having thus contributed to the bona fide belief that would be found existing in such case would not be permitted to unilaterally alter their stand and impose penalty on the charge of false declaration as no element of mens rea can ever found existing in such cases. The matter is remitted to the Tribunal that may summon the record of assessments of the assessee for the period 1991 onwards, to examine whether the register of utilisation of Form-C had been examined by the assessing officer over different years and whether it disclosed utilisation of Form-C by the assessee in different years to import packing material - If such utilisation is found to be recorded then, the Tribunal may further examine whether any penalty had been imposed on the assessee in any of the earlier years for utilisation of Form-C to import packing material. Revision allowed in part.
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