TMI Blog2011 (9) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... Kunwar Saksena for the petitioner C.S.C. for the respondent JUDGMENT This trade tax revision, filed by the assessee, is directed against an order of the Trade Tax Tribunal, Ghaziabad, dated December 20, 2003 passed in Second Appeal No. 48 of 1998, assessment year 1996-97. Under the order impugned the Tribunal has proceeded to hold that since there had been an attempt to avoid tax while transporting the goods without valid documents, the assessee was liable for penalty under Section 15A(l)(o) of the U. P. Trade Tax Act, 1948. However, in the facts of the case, the Tribunal has reduced the penalty to the tune of ₹ 15,000 only. Challenging the order so passed, counsel for the assessee Sri Kunwar Saxena placed reliance upon the judgment of the High Court of Judicature at Allahabad in the cases of Jain Sudh Vanaspati Ltd. v. State of U. P. [1983] 53 STC 54 (All); [1983] UPTC 198, Oriental Carbon Limited v. Commissioner, Sales Tax [1985] UPTC'613 and the judgment of the Supreme Court in Civil Appeal No. 1548 of 1987, decided on December 5, 1996, Commissioner of Sales Tax v. Oriental Carbon Limited reported in [1997] 10 NTN 105 (SC). It is contended that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal between the parties. He refers to the judgment of the High Court in the case of Jamco Shoe Factory v. Commissioner of Sales Tax [1995] 97 STC 617 (All); [1995] UPTC 295, Prakash Enterprises v. Commissioner, Sales Tax [2000] UPTC 1098, Omex Electronics v. Commissioner, Sales Tax [2001] UPTC 530, Setu Textiles v. Commissioner, Trade Tax [2009] UPTC 1123, Interarch Building Product Ltd. v. Commissioner of Trade Tax [2011] 40 VST 133 (All); [2010] UPTC 503 and Sarvashri Ramesh Chand Santosh Kumar v. Commissioner of Trade Tax [2011] 41 VST 33 (All); [2010] UPTC 1113. He also contended that section 54(1) of the VAT Act is pari materia to section 15A(1)(o) of the Trade Tax Act. Therefore, places reliance upon the judgment of the Division Bench of this court in the case of Rama Pulses v. State of U. P. [2009] 41 NTN 189 and the judgment of the honourable Single Judge in the case of Multitex Filtration Engineering Ltd. v. Commissioner, Commercial Tax [2009] 39 NTN 263 and upon the judgment of the honourable Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa [1970] 26 STC 302 (SC); [1972] 83 ITR 26 (SC); [1969] 2 SCC 627 and Bharjatiya Steel Industries v. Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carrying any goods referred to in the preceding sub-section shall stop the vehicle at every such check-post or barrier, when so required by an officer authorised under sub-section (2) of section 13, as the case may be, and allow him to search the vehicle and inspect the goods and all documents referred to in the preceding sub-section and shall, if so required, give him name and address and the names and addresses of the owner of the vehicle and of the consignor and the consignee of the goods. (6) Where the officer making the search or inspection under this section finds any person transporting or attempting or abetting to transport any goods to which this section applies without being covered by proper and genuine documents referred to in the preceding sub-section and for reasons to be recorded he is satisfied after giving such person an opportunity of being heard that such goods were being so transported in an attempt to evade assessment or payment of tax due or likely to be due under this Act, he may order detention of such goods. In the opinion of the court from a simple reading of section 15A(l)(o) it is apparently clear that penalty is attracted on violation of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n UPTC; paragraph 29 in VST reads as follows (page 528 in 13 VST): 28. It is, therefore, difficult to accede to the contention of Mr. Banerjee that under no circumstances absence of mens rea would not be a plea for levy of penalty. An assessing authority has been conferred with a discretionary jurisdiction to levy penalty. By necessary implication, the authority may not levy penalty. If it has the discretion not to levy penalty, existence of mens rea becomes a relevant factor... From the aforesaid paragraph 28 in UPTC; paragraph 29 in VST, it would be apparently seen that the Supreme Court has clarified that where there is a discretion to levy the penalty, absence of mens rea is a relevant consideration for the purposes of quantification of the penalty to be levied. The said judgment is complete answer to the contentions, which have been raised on behalf of the assessee. What follows therefrom is that mens rea is not a condition sine qua non for levy of penalty, it is only a relevant factor to be considered at the time of exercise of discretion at the time of quantification. This court may also refer to the judgment of the Supreme Court in the case of Guljag Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... izure of goods only. It would not control the applicability of section 15A(1)(o) for levy of the penalty for statutory violations. Therefore, mere use of words intention to evade tax, which have been so provided in the matter of seizure of goods under section 28(6) will not control or will not be applicable for the purposes of levy of penalty for violation of provisions of section 28A(2) or section 28A(5) of the U. P. Trade Tax Act. So far as the issue of discretion in the matter of imposition of penalty is concerned, this court may record that the Supreme Court in the aforesaid cases has explained that where discretion is conferred upon the authority concerned to levy penalty or not, the issue of mens rea becomes a relevant factor. In given set of fact it is open to the authority concerned to come to a conclusion that zero penalty be levied, as there has been no evasion of tax. This exercise of discretion cannot lead to a conclusion that the authority does not have the jurisdiction to levy the penalty, if there is no mens rea, i. e., only for statutory violations. The jurisdiction to levy the penalty and quantification of the penalty in the given facts of the case are entirely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other judgments relied upon by the counsel for the petitioner are concerned, suffice is to record that the Division Bench judgment in the case of Jain Sudh Vanaspati Ltd. [1983] 53 STC 54 (All); [1983] UPTC 198, had been delivered prior to the amendment in section 28A and therefore the Tribunal has rightly; in the facts of the case, recorded that with the change in the language in section 28A, the judgment in the case of Jain Sudh Vanaspati Ltd. [1983] 53 STC 54 (All); [1983] UPTC 198 ceases to have any binding effect. This court may further record that in the case of Jain Sudh Vanaspati Ltd. [1983] 53 STC 54 (All); [1983] UPTC 198, paragraph 23, which has been referred to by the counsel for the petitioner, the Division Bench has held that for the seizure of the goods it is a condition precedent to make out a case that there was an attempt to evade the tax. This has to be examined with reference to the power of detention of goods and levy of penalty thereafter. The issue as to whether the penalty could be levied on technical violation of section 28A(2) and 28A(5) had not been examined. The other judgment of the honourable single Judge, which has been followed by the Divis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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