TMI Blog2005 (9) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances. In fact, the said issue as to whether for a blank form No. ST 18A found with the transit of goods, penalty under section 78(5) of the Act can be imposed or not is an issue concluded by earlier pronouncements of this Court which have been upheld up to apex Court of the country yet such cases keep on coming to the dockets of this Court and they are at the instance of Revenue in larger number. As a matter of fact, whether the penalty in a particular case is imposable or not is a matter within the discretion of the authority concerned and therefore, once the final factfinding body namely, the Tax Board, on the basis of the facts and evidence available before it quashed and set aside such penalty, it would be a matter of discretion and the said exercise of discretion would not even give rise to a question of law but since the Revenue files such revision petitions in this Court stretching the matter into the realm of mixed question of fact and law, such revision petitions are entertained and decided on merit. In fact, when the penalty is quashed and set aside by the final fact-finding body, it remains a finding of fact that in the facts and circumstances of the case ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er penalty under section 78(5) of the Act of 1994 should be imposed on the defaulter, who may be consignor or consignee of the goods or even the transporter, it would be relevant here to analyse the relevant rule 53 of the Rajasthan Sales Tax Rules, 1995 providing for such declaration in the form No. ST 18A which is supposed to accompany the other documents like bill and bilty with the transit of the goods in question. "Rule 53. Declaration form required to be carried with the goods in movement for imports within State. (1)(a) A registered dealer (i) who imports any taxable goods as may be notified by State Government for sale, except when the goods are the goods of the class or classes specified in the certificate of registration under the Central Sales Tax Act, 1956, of the registered dealer purchasing the goods and are purchased for mining or in generation or distribution of electricity or any other form of power; or (ii) who receives any goods as may be notified by the State Government consigned to him from outside the State; or (iii) who intends to bring import or otherwise receives any goods from outside the State, as may be notified by the State Government of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) of section 78, who shall retain the original portion of the declaration form and return the duplicate portion after signature and marking seal in token of having verified it, to the persons producing it, and such officer shall send the retained original portion of the declaration form to the assessing authority of the registered dealer or to the authority who issued the declaration form, in the case of dealer or other person other than registered dealer. (d) if the declaration form referred to in clause (a) or (b) in respect of the goods in movement has already been submitted to the in-charge of the entry check-post or to the officer empowered under section 78, any person transporting the goods shall, on inspection by an officer empowered under section 78 at any subsequent place, produce the countersigned and sealed copy of the aforesaid declaration along with other documents specified in clause (a) of sub-section (2) of section 78. Explanation. For the purpose of this rule, 'taxable goods' means all goods, except the goods the sale or purchase of which by dealers is generally exempt from tax without any condition or on the sole condition that an exemption certificate with or w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artmental authorities to check the same, to get the same filled up, if some particulars are not filled up and get it countersigned by the transporter's representatives available. But on the other hand, instead of getting such formality completed or even complete the same at their own end, to raise a bogey of tax evasion and then enrol the transporter or consignor or consignee in the labyrinth of legal process of initiation of penalty proceedings, passing of penalty orders, recoveries of the same at the peril of detention and damage to the goods or leaving the parties to face the litigative battles even in appellate jurisdiction and even up to this Court is nothing but display of sadistic pleasure of the departmental authorities on the spot which, the chances cannot be ruled out, could be subdued in a large number of such cases by greasing of the palms of such authorities. Firstly, if the form No. ST 18A is properly issued by the concerned departmental authorities to the consignee or purchaser of the goods who intends to import such goods within the State of Rajasthan and who in turn sends such blank form or partly filled up the form in part A of the said form to the consignor or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver so legally sustainable. The indirect loss of trade volume by such an atmosphere of Penalty Raj or Inspector Raj cannot be lost sight of and imposition of penalties on such technical or venial breaches if at all they can be said to be even that, cannot be allowed in a welfare State governed by the rule of law. This Court is also conscious of the prevalent tax evasion tactics by the traders and dealers and therefore, pious object with which section 78 has been enacted and upheld by the honourable Supreme Court of India, is also necessary to be kept in mind and the initiation of enquiry under section 78 of the Act by the departmental authority is also not required to be nipped in the bud in every case. If a prima facie case of false or forged documents is available before the authority concerned or even the basic documents like bill and bilty are not available with the goods, it would be only in the fitness of the things if such enquiries are initiated and after enquiry, if a case is made out, even the penalty proceedings may be required to be initiated and concluded upon such enquiry as is deemed fit in the facts and circumstances of the case even in such cases besides the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D.P. Metals [2001] 124 STC 611 in para 31 of the said judgment observed as under: "Such submission of false or forged documents or declaration at the check-post or even thereafter can safely be presumed to have been motivated by desire to mislead the authorities. Hiding the truth and tendering falsehood would per se show existence of mens rea, even if required. Similarly, where, despite opportunity having been granted under section 78(5) if the requisite documents referred to in sub-clause (2)(a) are not produced, even though the same should exist, would clearly prove the guilty intend." Thus, the honourable Supreme Court also clearly held that the existence of mens rea would be established if only false or forged document or declaration is produced at the time of checking or even after giving an opportunity by the authority concerned no such declaration is produced. Similarly, in a later division Bench judgment of this Court in Lalji Mulji Transport Company v. State of Rajasthan [2002] 127 STC 365; [2002] 3 Tax Update 21 (Raj), the court while upholding the constitutional validity of section 78(10) and other sub-sections of section 78 the court said, "Thus, the plain and simpl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verification of goods in transit so that ultimately, they are duly recorded and upon taxable event in the form of taxable sale taking place within the State of Rajasthan tax is collected on the same. Another question which looms large is whether the detention of such goods and vehicle is necessary while the enquiry into the verification of the documents and penalty proceedings are undertaken by the competent authorities. Though, provision has been made for release of goods seized for reasons to be recorded in writing in section 78(4) of the Act, coupled with the powers to release the goods under sub-section (7) of section 78 of the Act and sub-section (9) of section 78 for release of the vehicle and there is also a time-limit of seven days for such enquiry provided in section 78(4) of the Act, the ground realities appear to be otherwise. The powers of release of goods and vehicle upon security subject to further verification is hardly used by the authorities concerned and prolonged detention of goods and vehicle appears to be the order of the day resulting in serious financial and indirect loss even to the genuine cases of transit of goods along with proper documents and even in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 78 of the Act has been enacted. If only in peculiar and particular cases such detention becomes essential beyond 24 hours, recording of reasons by the higher authorities of the department not below the rank of Commercial Taxes Officer or Deputy Commissioner, showing application of mind by them should be made necessary so that the bona fide cases of transit do not suffer. The department should devise system and method by which day, date and time of checking, detention, release and verification, etc., is duly recorded with cross checks in place. Therefore, it is expected from the Commercial Taxes Department to urgently frame detailed and proper guidelines in this regard also. Another aspect of the matter which necessarily engages the attention of this Court is that petty matters or matters with small stakes like penalty quantum of Rs. 2,000 to Rs. 10,000 being brought before this Court at the instance of Revenue and a large chunk of revision petitions relating to penalty under section 78(5) of the Act before this Court are in that range. While the Income-tax Department has formulated guidelines in this regard and the cases involving small stakes by limit would not be agitated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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