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2016 (4) TMI 4 - RAJASTHAN HIGH COURT

2016 (4) TMI 4 - RAJASTHAN HIGH COURT - [2015] 85 VST 41 (Raj) - Imposition of penalty - Section 78(5) of the Rajasthan Sales Tax Act, 1994 - Mandatory declaration form ST-18A was blank and the goods were under stock transfer - Whether mens rea is required to be proved - Held that:- as per decision of Hon'ble Apex Court in the case of Guljag Industries v. Commercial Taxes Officer [2007 (8) TMI 344 - SUPREME Court] and Larger Bench of this court in the case of ACTO Versus Indian Oil Corporation L .....

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-carrying requisite document. It is apparent that the assessee was aware that the declaration form is required to be carried, which was duly signed by the authorized signatories of the respondent but for the reasons best known to it, all other particulars were admittedly left blank. The mandate of law and requirement is to be fulfilled. Thus the Hon'ble Apex Court has clearly held that declaration forms 18A/18C, which have been duly signed by the assessee but left blank, then section 78(2)(a) st .....

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years, is not required to be given. Therefore, penalty under Section 78(5) of the Rajasthan Sales Tax Act, 1994 has to be imposed. - Decided in favour of revenue - S. B. Sales Tax Revision Petition No. 25 of 2005 - Dated:- 10-7-2015 - J. K. RANKA, J. For the Petitioner : Ms. Tanvi Sahai on behalf of R. B. Mathur For the Respondent : T. C. Jain JUDGMENT Instant sales tax revision petition is directed against order of the Tax Board dated July 29, 2004 and relates to penalty which was imposed upon .....

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tate of Rajasthan (D. B. Civil Special Appeal No. 858 of 1994), reported in [2004] 19 Sales Tax Today 239, decided on November 29, 2004, as well as Lalji Mulji Transport Company v. State of Rajasthan [2002] 127 STC 365 (Raj); [2002] 3 RLR 255, as follows: "(i) Whether requirement of mens rea is relevant for the purpose of determining the liability for penalty in terms of section 78, sub-section (5) of the Rajasthan Sales Tax Act, 1994 ? (ii) Whether the mens rea is required to be proved as .....

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penalty in the absence of mens rea being proved ? (iv) Whether the mens rea is required to be proved as a necessary ingredient for imposing of penalty under sub-section (5) of section 78 on proved violation of sub-section (2) of section 78 of the Rajasthan Sales Tax Act, 1994 ?" 3. The Larger Bench of this court vide order dated February 26, 2015 passed in Sales Tax Revision Petition No. 92 of 1999 (Assistant Commercial Taxes Officer v. Indian Oil Corporation Ltd. [2015] 82 VST 200 (Raj) [ .....

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nt to rule 55 of the RST Rules, 1995, in pursuance to the decision of the honourable Supreme Court in State of Rajasthan v. D. P. Metals [2001] 124 STC 611 (SC), authorises the authority empowered, to make an enquiry of violation of section 78(2), and not to adjudicate as to whether the mens rea was present in violation of sub-section (2) of section 78, for imposing penalty under sub-section (5) of section 78 of the RST Act, 1994. (iv) The mens rea is not required to be proved as necessary ingre .....

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and the answers provided by the Larger Bench on such opinion and accordingly the instant revision petition is being decided. 5. Brief facts, which can be noticed on perusal of the impugned order, are that the assessee is a limited company manufacturing electrical items namely, washing machines, refrigerators and other items and its vehicle, bearing No. HR 38-A-7416 was intercepted by the Anti Evasion Wing of the Revenue-Department on September 10, 2000 at check-post Shahjahanpur. On enquiry fro .....

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form could not be filled in, on account of the mistake and it being a technical mistake, no penalty was to be levied. However, the assessing officer (for short, "the AO") was dissatisfied with the explanation so offered and imposed penalty by holding that the declaration form ST- 18A duly filled in was the prime necessity under the Act. 6. The respondent-assessee preferred appeal before the Deputy Commissioner (Appeals) (for short, "the DC (A)") before whom it was claimed th .....

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im that the goods were being transported in an appropriate manner. 8. Counsel for the petitioner-Revenue contended that it is a clear-cut case of violation of section 78(5) read with rule 53 and she contended that both the appellate authorities deleted the penalty solely on the basis that mens rea was not proved by the Revenue and contended that much water has flown thereafter and not only the apex court in the case of Guljag Industries v. Commercial Taxes officer [2007] 9 VST 1 (SC); [2007] 293 .....

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, then why the declaration form ST-18A was left blank has not been clarified by the assessee before all the three authorities and both the appellate authorities have solely gone on the basis of mens rea when in a case like this, mens rea is not essential. She further contended that there was requirement of carrying declaration form ST-18A in a case of stock transfer as well and the assessee being a limited company was certainly aware of the declaration form to be carried which, infact, was carri .....

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ling in the declaration form and it may be on account of inadvertent error or mistake committed on the part of the clerical staff. He further contended that when all the other requisite documents relating to goods under transport were available and entire information was contained in the other supporting documents, then merely because the declaration form ST-18A was not filled in, does not make any difference. He further contended that this court, after considering the judgment in the case of Gu .....

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Ltd. [2011] 30 Tax Update 251 (Raj), ACTO v. Hariom Company [2011]30 Tax Update 285 (Raj) and Assistant Commercial Tax Officer v. Indian Oil Corporation Ltd. [2014] 73 VST 425 (Raj), STR No. 82 of 2011, decided on May 16, 2013. He further contended that the Larger Bench of this court in the case of Assistant Commercial Taxes Officer v. Indian Oil Corporation Ltd. [2015] 82 VST 200 (Raj) [FB] has merely held that mens rea is not essential in such cases and prayed that the order of the two appella .....

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considered the arguments advanced by counsel for the parties. 11. At the outset, it may be observed that the honourable apex court in the case of Guljag Industries v. Commercial Taxes Officer [2007] 9 VST 1 (SC); [2007] 293 ITR 584 (SC); [2007] 7 SCC 269 and Larger Bench of this court in the case of Indian Oil Corporation Ltd. [2015] 82 VST 200 (Raj) [FB], has held that mens rea is not essential and therefore, the observation of the Tax Board in this regard is reversed. 12. It would be appropria .....

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mpose 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.) R. 53. Declaration form required to be carried with the goods in movement for import within State.-(1)(a) A registered dealer,- (i) who imports any taxable goods as may be notified by the State Government for sale, except when the goo .....

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fied by the State Government, of the value of ₹ 10,000 or more for use, consumption or disposal otherwise than by way of sale; shall furnish or cause to be furnished a declaration in form ST 18A (completely filled in all respect in ink). The counterfoil of the declaration shall be retained by such dealer and its portions marked 'original' and 'duplicate' shall be carried with the goods in movement. (b) Any dealer or person other than a registered dealer,- (i) who imports an .....

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spect in ink). The counterfoil of the declaration shall be retained by such dealer or person and its portions marked 'original' and 'duplicate' shall be carried with the goods in movement. (c) The driver or the other person incharge 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 pr .....

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ssessing 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 incharge 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, pr .....

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xes Officer [2007] 9 VST 1 (SC); [2007] 293 ITR 584 (SC); [2007] 7 SCC 269 as also the judgment of honourable Larger Bench of this court in the case of Assistant Commercial Taxes Officer v. Indian Oil Corporation Ltd. [2015] 82 VST 200 (Raj) [FB], in my view, if there is requirement of carrying declaration form and the form is left blank for any reason whatsoever, then it is a clear-cut case of noncarrying requisite document. It is apparent that the assessee was aware that the declaration form i .....

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ot;In our view, the aforestated judgment in the case of D. P. Metals [2001] 124 STC 611 (SC); [2002] 1 SCC 279 has no application to the present case. We are not concerned in the present case with false or forged documents/declaration. In the present case the goods in movement were carried with the blank declaration form 18A/18C which was duly signed by the assessee. Therefore, as stated above, we hold that the goods in movement were carried without the declaration form 18A/18C. Therefore, secti .....

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ly 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 [2001] 124 STC 611 (SC); [2002] 1 SCC 279 has no application to the present case." 14. Thus the honourable apex court has cl .....

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4 STC 611 (SC); [2002] 1 SCC 279, has opined in para Nos. 32 to 34 as under (pages 222 and 223 in 82 VST): "32. In the case of submission of false or forged document and declaration, sub-section (2) of section 78 or sub-section (5) of section 78 of the RST Act, 1994, what is alleged is the presentation of false or forged documents. It is with reference to submission of false or forged document or declaration. Once the documents are found to be false or forged after making an enquiry under r .....

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Metals [2001] 124 STC 611 (SC); [2002] 1 SCC 279, provides for an opportunity, to be given to produce the required document and/or declaration forms complete in all respects when the goods enters or leaves the nearest check-post of the State. Sub-rule (2) of rule 55 requires that verification or enquiry shall be completed within seven days from the date of issue of the direction, and for action, if any, warranted in the circumstances of the case, in pursuance to the direction given under sub-cla .....

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orting or rebooking, till a verification is done or an enquiry is made, which shall not take more than seven days. 34. The suspicion or doubt on the documents to be false or forged, per se, does not attract levy of penalty under sub-section (5) of section 78 of the RST Act, 1994. In such case, an opportunity is to be given under rule 55(1) of the RST Rules, 1995, to a person, to produce the required documents and/or declaration forms completed in all respects, when the goods enter or leaves the .....

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t penalty for submission of false or forged document or declaration, necessarily involves adjudication, for which mens rea is relevant, and is a necessary ingredient. Any doubts in this regard have been clarified by the honourable Supreme Court in Guljag Industries v. Commercial Taxes Officer [2007] 9 VST 1 (SC); [2007] 293 ITR 584 (SC); [2007] 7 SCC 269, in which it has been clearly held in para 30, after quoting the provisions of section 78, that (para 23, page 32 in 9 VST): '. . . In the .....

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er is squarely answered by the judgment of the honourable apex court in the case of Guljag Industries v. Commercial Taxes Officer [2007] 9 VST 1 (SC); [2007] 293 ITR 584 (SC); [2007] 7 SCC 269 and Larger Bench of this court in the case of Assistant Commercial Taxes Officer v. Indian Oil Corporation Ltd. [2015] 82 VST 200 (Raj) [FB]. 17. In this case, admittedly an opportunity was granted by the AO to the assessee of proving its case which included filling up of the declaration form, which the as .....

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ndered by this court in the case of CTO v. Jain Tube [2011] 30 Tax Update 125 (Raj) and other judgments relied upon by counsel for the assessee which have restored the matter back to the AO but in my view, in the light of the judgment rendered by the Larger Bench of this court in the case of Assistant Commercial Taxes Officer v. Indian Oil Corporation Ltd. [2015] 82 VST 200 (Raj) [FB], which is binding and for the reason in earlier paras, I am not persuaded with the arguments advanced by counsel .....

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