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2019 (7) TMI 145 - HC - VAT and Sales TaxImposition of penalty - requirement of mens rea - levy of Luxury tax - Section 4E of the Kerala Tax on Luxuries Act, 1976 - bonafide belief or not - HELD THAT:- In examining whether mens rea is an essential element to impose penalty under a taxing statute, regard must be had to the following factors: (i) the object and scheme of the statute; (ii) the language of the section and; (iii) the nature of penalty - Penalty is attracted simpliciter on violation of statutory provisions of civil law. When it is provided in the statute that the act which attracts levy of penalty shall be committed 'knowingly', 'falsely', 'intentionally', 'fraudulently', 'wilfully' etc, then it can be found that it requires mens rea for imposing penalty. The use of such expressions indicates the intention of the legislature in clear terms that mens rea is an essential element. On a close scrutiny of the provisions contained in Section 17A of the Act, we are of the considered opinion that mens rea on the part of the assessee is not an essential element to be proved for imposing penalty under that provision. The scheme of the Act in imposing penalty is very clear. The defaults and failures which attract penalty are nothing but violations or failures or defaults of statutory civil obligations provided under the Act. The proceedings for imposing penalty under the Act are neither criminal nor quasi-criminal - The penalty is leviable in cases of default or failure of obligations under the Act which are civil in nature. There is nothing in the provisions contained in Section 17A of the Act which indicates that guilty intention of the assessee is required to be established before imposing penalty. Thus there is no question of proof of guilty intention or mens rea by the assessee and it is not an essential element for imposing penalty under Section 17A of the Act. However, we take note of the fact that, for evasion of payment of luxury tax, penalty cannot be imposed under Section 17A of the Act. This is for the reason that the provision contained in Section 17(2)(b)of the Act takes care of that situation by providing punishment for such act. Evasion of luxury tax is not an act specifically mentioned under Section 17A of the Act - Since punishment is provided under Section 17(2)(b) for evasion of payment of luxury tax, in view of the provision contained in Section 17A(d) of the Act, penalty cannot be levied under Section 17A for committing such act. The failure to get registration under the Act and failure to file monthly returns under the Act attract levy of penalty. But, we take note of the fact that the assessee has not collected luxury tax from the patients - We also take note of the fact that the assessee immediately paid the luxury tax due pursuant to the order passed by the assessing authority. Considering these circumstances, we find that the amount of penalty payable by the petitioner can be reduced to ₹ 1,00,000/-. Revision petition allowed in part.
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