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TMI Blog2008 (11) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicle. The statement of the driver was recorded. Show-cause notice was issued. In reply to the show-cause notice the representative of the respondent (importer) submitted that the duty of filling in the declaration form ST-18A was the responsibility of the transporter and the consignor and on account of mistake on the part of the transporter the said form was not duly filled in. The A.O. came to the conclusion that goods were imported without the declaration form ST-18A which amounted to violation of section 78(2)(a) of the Rajasthan Sales Tax Act, 1994 (for short, "the 1994 Act") read with rule 53 of the Rajasthan Sales Tax Rules, 1995 (for short, "the 1995 Rules"). Hence, on the price of the goods of Rs. 2,85,000, penalty at the rate of 30 per cent to the tune of s. 85,500 came to be imposed. Aggrieved by the decision of the A.O. imposing penalty, the respondent carried the matter in appeal to the Deputy Commissioner (Appeals). Before the appellate authority it was contended on behalf of the respondent that the declaration form relating to the goods was sent to the consignor but through oversight it was left behind and therefore there was no intention to evade the tax and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods at the time of checking and since the said declaration form was sent by the consignor to the transporter but on account of bona fide mistake of the transporter the same was left out, it could not be said that there was any intention to evade tax. Accordingly, the High Court confirmed the decision of the Rajasthan Tax Board. Hence, this civil appeal by the Department. As a matter of preface, we may state that we have come across a number of matters where the Department has sought to impose penalty under sec- tion 78(2) read with section 78(5) of the said 1994 Act. It appears that in a large number of cases evasion has taken place on account of the importer's (consignee's) failure to fill in declaration form ST-18A. Moreover, in all these cases we found that when scrutiny takes place the declaration form(s) is sought to be produced after incorporating the details required to be given in that form. In all these cases, the declaration forms are duly signed but important columns are left blank. Those columns are filled in either when scrutiny begins or at the stage of investigation/enquiry. It is important to note that these declaration forms are similar to returns under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 1994 Act. The Tax Board held that the burden was on the Department to establish guilty mind (mens rea) on the part of the consignee. Accordingly, the appeal was allowed. Thereafter a revision petition was filed by the Department. By the impugned judgment, the High Court held that mens rea was not a sine qua non for levying penalty in the case of contravention of section 22A(3) of the 1954 Act [section 78(2) of the 1994 Act]. Even on the facts, the High Court held that not filling the form was a deliberate act which indicated, in any event, an intention of the consignee to evade the tax. Therefore, in that matter, the consignee filed its appeal by special leave in this court. After examining the scheme of section 22A(3) of the 1954 Act, rule 62A of the Rajasthan Sales Tax Rules, 1955 as well as the provisions of section 78(2) and section 78(5) of the 1994 Act read with rules 53 and 54 of the Rajasthan Sales Tax Rules, 1995, this court held, inter alia, that mens rea was not necessary for liability of penalty under section 78(5) of the 1994 Act. It was held that transport of goods in movement with the prescribed declaration form duly signed but without giving material particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filled in by the consignor. The nature of the transaction as to whether it is by consignment or by depot transfer or by inter-State sale has to be indicated by the consignee. Similarly, the consignee has to indicate the description of the goods. In the present case the consignee (assessee) has left the requisite columns blank. Part B has to be filled in by the consignor. Part B requires the consignor to give the estimated value of goods. He has also to give invoice number and the date. It is important to note that the declaration form is collected by the consignee from his A.O. in the State of Rajasthan. The consignee gives an undertaking to get Part B filled by the consignor. Similarly, the consignee gives a declaration that facts stated in Part A are true to his knowledge. In the present case, the entire form was left blank though it had been signed by the consignee. Therefore, the declaration given by the consignee is meaningless. There are no facts given in Part A. There is no identity of the goods transported. There is no description of the goods in movement. As stated above, the original has to be placed before the A.O. by the officer at the check-post. If the form which u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is left blank then in that event section 78(5) provides for imposition of monetary penalty for non-compliance. Default or failure to comply with section 78(2) is the failure/default of statutory civil obligation and proceedings under section 78(5) are neither criminal nor quasi-criminal in nature. The penalty is for statutory offence. Therefore, there is no question of proving of intention or of mens rea as the same is excluded from the category of essential element for imposing penalty. Penalty under section 78(5) is attracted as soon as there is contravention of statutory obligations. Intention of parties committing such violation is wholly irrelevant. Moreover, in the present case, we find that goods in movement carried with form No. 18A/18C. The modus operandi adopted by the assessees itself indicates mens rea. This is not the case where goods in movement are carried without the declaration forms. In the present matter, as stated above, goods in movement were carried with the declaration forms. These forms were duly signed. However, material particulars were not filled in. The explanation given by the assessees in most of the cases is that they are not responsible for the mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f inter-State transactions they were not liable in any event for being taxed under the RST Act 1994 and, therefore, penalty for contravention of section 78(2) cannot be imposed. As stated hereinabove, declaration has to be given in form 18A/18C even in respect of goods in movement under inter-State sales. It is for contravention of section 78(2) that penalty is attracted under section 8(5). Whether the goods are put in movement under local sales, imports, exports or inter-State transactions, they are goods in movement and therefore, they have to be supported by the requisite declaration. It is not open to the assessee to contravene and say that the goods were exempt. Without disclosing the nature of transaction it cannot be said that the transaction was exempt. In the present case, we are only concerned with the goods in movement not being supported by the requisite declaration. . . . 32 See para 25 in 9 VST. In the present case, the assessees have relied upon the judgment of this court in the case of State of Rajasthan v. D.P. Metals [2002] 1 SCC 279 [2001] 124 STC 611 (SC).. In that case the facts were as follows. The assessee-firm manufactured stainless steel sheets. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned with the blank declaration form 18A/18C which has travelled with the goods in movement, though signed, was left deliberately blank. The declaration form 18A/18C is like a return under the Income-tax Act, 1961. The assessing officer completes the assessment on the basis of form 18A/18C. If that form is left blank in all material respects then it is impossible for the A.O. to arrive at the taxable turnover of the assessee. Therefore, in our view, the judgment of this court in D.P. Metals [2002] 1 SCC 279 [2001] 124 STC 611 (SC)., has no application to the present case." Reading the judgment in the case of Guljag Industries [2007] 7 SCC 269, two points are very clear. That judgment rules out mens rea as an essential ingredient of the offence under section 78(2) for which penalty is imposed under section 78(5). At the same time, the said judgment, vide para 28 See para 22 in 9 VST., holds that even if mens rea constituted an essential ingredient of an offence still the modus operandi adopted by the consignee of not giving particulars in form ST-18A per se indicated mens rea (intention to evade taxes). In the said judgment we have also distinguished the case of D.P. Metals [2002] 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or barrier and inspection of goods while in transit.-. . . (3) The owner or person in charge of a vehicle, boat or animal shall carry with him a goods vehicle record, a tripsheet or a log book, as the case may be, and such other document, as may be prescribed in respect of the goods carried in or on the vehicle, boat or animal, as the case may be, and produce the same before any officer-in-charge of check-post or barrier or any other officer as may be empowered by Government in that behalf. The owner or person in charge of a vehicle, boat or animal entering the State limits or leaving the State limits shall also give a declaration containing such particulars as may be prescribed of the goods carried in or on the vehicle, boat or animal, as the case may be, before the officer-in-charge of the check-post or barrier or the officer empowered as aforesaid and give one copy of the declaration to such officer, and keep one copy with him. (7)(a) The officer-in-charge of the check-post or barrier or any other officer not below the rank of an Assistant Commercial Taxes Officer, empowered in this behalf may, after giving the owner or person in-charge of the goods a reasonable opportunity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty under clause (a) on furnishing such security in such form as may be prescribed for the payment thereof, as he may consider necessary. (c) such officer may, for sufficient reasons release any of the goods seized as aforesaid even before proceeding under clause (a) or during the course of proceedings under that clause, on furnishing of security of an amount equal to the estimated value of the goods to be released if he considers it necessary so to release the goods." (emphasis supplied) Provisions contained in the 1955 Rules: "Rule 62A. Documents prescribed under section 22A(3).-(1) The owner or person-in-charge of a vehicle, boat or animal shall carry with him a bill of sale or dispatch memo, and declarations as provided under the Act and Rules: Provided that no such bill of sale, despatch memo or declarations shall be necessary to be carried or furnished at check-post, in respect of personal effects otherwise than the goods referred to in sub-rule (2) of any person or exempted goods as defined in the Explanation to sub-section (6) of section 22A. (2)(a) If any person other than a registered dealer within the State wants to purchase from outside the State any goods, as no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the State Government for sale, use in the manufacture or processing of goods for sale or in mining or generation or distribution of electricity or any other form of power or packing of goods for sale, or (b) who receives any goods consigned to him from outside the State for sale, shall make and furnish or cause to be furnished declaration in form ST-18A. The counterfoil of the declaration shall be retained by such dealer and its portion marked original and duplicate shall be produced before the officer-in-charge of the check-post who shall retain such original portion and return such duplicate portion duly sealed in token of having verified it to the person producing it. Such duplicate portion of the declaration shall then be furnished by the dealer along with his quarterly statement in form ST-6 to the assessing authority: Provided that form ST-18A need not be furnished if the goods are goods of the class or classes specified in the certificate or registration under CST Act, 1956 of the registered dealer purchasing the goods as being intended for use by him in the manufacture or processing of goods for sale or mining or in the generation or distribution of electricity or an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration form: Provided that an application under the preceding proviso may be made up to December 31, 1989 in relation to riots occurring in Makarana Circle in March 1989. (1a) A dealer who claims concession from payment of tax on the sale of raw material to any notified industry under section 5CC or to any manufacturer under any notification issued under section 4(2) shall in respect of such sale obtain a declaration from the purchasing manufacturer in form 17A and shall, file such declaration before or at the time of assessment unless earlier required by the assessing authority and also submit a separate list of such sales in form ST-16: Provided that no declaration shall cover more than one transaction except where the total amount covered by one declaration does not exceed Rs. 2 lac for all the transactions in six months. (1b)(i) The goods referred to in sub-section (1) of section 5CCCC which a registered dealer may purchase, shall be the goods intended for use by him as processing material (other than raw materials) such as machinery, plant, equipment, tools, stores spare parts and accessories in the manufacture or processing of goods for sale, or in mining or in the genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o have made such sales as are envisaged in sub-rule (1) or (1a) or (1b) to another dealer shall in respect of such claim, produce before the assessing authority the portion marked 'original' of the declaration received by him from the purchasing dealer. The assessing authority may in his discretion, or in case of loss of the original foil of the declaration may direct the selling dealer to produce for inspection or record the portion of the declaration marked 'duplicate'. (8) No purchasing dealer shall give, nor shall a selling dealer accept any declaration except in a form obtained by the purchasing dealer, on application from the assessing authority and not declared obsolete and invalid by the State Government under the proviso to sub-rule (6). Every declaration form obtained from the assessing authority by a dealer shall be kept by him in safe custody and he shall be personally responsible for the loss of Government revenue, if any, directly or indirectly from any theft or loss thereof. Every registered dealer to whom any declaration form is issued by an assessing authority, shall maintain in a register in form ST-16A a true and complete account of every such form received fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed date or the extended date or dates, if any, have already expired, the assessing authority shall withhold the issue of declaration forms to him until such time as he:- (i) deposits the outstanding demand; (ia) pays tax according to sub-section (2A) of section 7 of the Act; (ii) furnishes such return or returns, together with such receipted challan or challans; and (iii) furnishes any other return or returns together with the receipted challan or challans showing payment of the tax due according to such return or returns for the furnishing of which the prescribed date or dates or the extended date or dates, if any, may have expired after the date of the application: Provided that in a case coming under this clause, the assessing authority may, instead of withholding the declaration forms, issue such forms in such number and subject to such conditions and restrictions and may be considered reasonable, to an applicant, if in the opinion of the assessing authority it is desirable in the interest of speedy collection of sales tax revenue to grant time to the applicant to pay up the arrears of tax in one lump sum or in instalments. (d) Where the assessing authority does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation including an animal to carry goods from one point to another point; (ii) 'goods' shall include animals also; and (iii) 'goods in movement' shall means,- (a) the goods which are in the possession or control of a trans- porting agency or person or other such bailee; (b) the goods which are being carried in a vehicle or carrier belonging to the owner of such goods; and (c) the goods which are being carried by a person. (4) Where any goods in movement, other than exempted goods, are without documents, or are not supported by documents as referred to in sub-section (2), or documents produced appear false or forged, the in-charge of the check-post or the officer empowered under sub-section (3), may,- (a) direct the driver or the person in charge of the vehicle or carrier or of the goods not to part with the goods in any manner including by re-transporting or re-booking, till a verification is done or an enquiry is made, which shall not take more than seven days; (b) seize the goods for reasons to be recorded in writing and shall give a receipt of the goods to the person from whose possession or control they are seized; (c) release the goods seized in clause (b) to the owne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m outside the State, as may be notified by the State Government, of the value of Rs. 10,000 or more for use, consumption or disposal within the State; shall furnish or cause to be furnished a declaration in form ST-18AA, completely filled in all respect in ink. The counterfoil of the declaration shall be retained by such dealer or person and its portions marked 'original' or 'duplicate' shall be carried with the goods in movement. (c) The driver or the other person in charge of a vehicle or carrier of goods in movement shall carry with him the documents specified in clause (a) of sub-section (2) of section 78 and declaration prescribed in clause (a) or (b) of this sub-rule, in respect of the goods in movement and shall produce the same, suo motu before the in-charge of the entry check-post at the time of entry within the State or before the officer empowered under section 78, at the time of inspection under sub-section (3) of section 78, who shall retain the original portions of the declaration form and return the duplicate portion after signature and making seal in token of having verified it, to the person producing it, and such officer shall send the retained original portion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm ST-18AA, and in case original portion of form ST-18AA has not been retained by any officer mentioned in sub-rule (1), it shall be furnished with duplicate portion of form ST-18AA, to the issuing authority abovementioned, within a period of thirty days, from the date of issue of declaration form to him. (4) Where a registered dealer or any other dealer or person other than registered dealer, fails to furnish statement as mentioned in sub- rule (2) or (3) above, as the case may be, the assessing authority or the authority who issued the declaration form, after affording a reasonable opportunity of being heard, may impose penalty under section 68 of the Act. (5) The provisions of sub-rules (5), (6), (7), (8), (9), (10), (11), (12), (13), (14), (15), (16), (17), (18), (19) and (20) of rule 23 shall in so far as may be mutatis mutandis apply to the declaration form ST-18A. (6) Where form ST-18A and ST-18AA is out of print or in short supply or otherwise not available in zone, the Commissioner may issue such instructions as he deems proper in view of the circum- stances of the case. (Emphasis supplied) Rule 54. Declaration required to be carried with the goods in movement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . With the use of computers and other modern techniques and other cost factors, the registration fee fixed about half a decade ago needs upward revision. With this objective sub-section (3) of section 17 has already been amended in March, 2001. In consonance with the said amendment, sub-section (1) of section 18 and sub-section (1) of section 19 providing for the fee for provisional registration and voluntary registration, respectively, are required to be amended to empower the State Government to prescribe such fee in accordance with the prevalent circumstances. Section 71 provides for the prosecution of any person in the contingencies specified in sub-section (1). As per clause (e) of sub- section (1), prosecution for deliberately disregarding the notice issued by the assessing authority for recovery of demand, prosecution can be launched. However, similar powers are not available for non-compliance of the notice issued by the Commissioner under section 93 of the Act to call for certain information. Therefore, clause (e) of sub-section (1) of section 71 is proposed to be amended. To protect the interest of the consumer, it is being proposed to make it mandatory to issue bill or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost or the officer empowered under sub-section (3), after having given the owner of the goods or a person authorized in writing by such owner or the person in-charge of the goods a reasonable opportunity of being heard and after having held such enquiry as he may deem fit, shall impose on him for possession or movement of goods, whether seized or not, in violation of the provisions of clause (a) of sub-section (2) or for submission of false or forged documents or declaration, a penalty equal to thirty per cent of the value of such goods." (emphasis supplied) As stated above, it is the case of the respondent herein that under section 78(2) and under section 78(5) penalty was leviable after due opportunity only on "the person in charge of the goods" under the 1994 Act and since this case arose out of cause of action when the truck was intercepted on March 30, 1999, the respondent who is the owner of the goods cannot be penalized under unamended section 78(5) of the 1994 Act. We do not find merit in this argument. Let us examine the scheme of section 78 of the said 1994 Act prior to March 22, 2002. Under section 78(2) the driver or the person in charge of a vehicle or carrier of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter sub-section (4) refers to "person in charge of the goods". The words "in movement" do not find place in section 78(5) and therefore the expression "person in charge of goods" under section 78(5) was wider than the expression "person in charge of goods in movement" under section 78(2)(a). Consequently, the expression "person in charge of the goods" under section 78(5) who is given an opportunity of being heard in the enquiry would include the "owner of the goods". Therefore, in our view, the judgment of this court in the case of Guljag Industries [2007] 7 SCC 269 would squarely apply to the facts of the present case. In fact, our view in the case of Guljag Industries [2007] 7 SCC 269(1) finds support from the amendment made in section 78(5) vide Act No. 7 of 2002 with effect from March 22, 2002 by which the expression "person in charge of the goods" under the old section 78(5) is substituted by the words "the owner of the goods or a person authorized in writing by such owner or person in charge of the goods". It is once again emphasized that Act No. 7 of 2002 is an exercise in substitution. Therefore, the Legislature seeks to clarify the expression "person in charge of the good ..... X X X X Extracts X X X X X X X X Extracts X X X X
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