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ITC Agrotech Limited, through its Manager Ramlal Verma Versus Assistant Commercial Taxes Officer, Anti Evasion 1, Circle 2, Jaipur

2016 (9) TMI 1085 - RAJASTHAN HIGH COURT

Imposition of penalty @ 30% equivalent to the value of the goods under section 22-A(7) of the Rajasthan Sales Tax Act, 1954 - declaration in form ST-18-A - Sun Flower Oil carried from Shahbad to Jaipur - Held that: - section 22-A(7) of the Rajasthan Sales Tax Act Act, 1954 mandates that declaration form is required to be carried on by the vehicle in addition to the other documents. The decision in the case Assistant Commercial Taxes Officer Versus. Indian Oil Corporation Ltd [2015 (11) TMI 1078 .....

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the order dt.03/07/2012 passed by the Rajasthan Tax Board, Ajmer, dismissing the appeal of the assessee. 2. Brief facts noticed for disposal of this petition are that on 20/07/1995 a vehicle bearing No.MKO-9507 was intercepted by the Anti Evasion Wing of the Revenue where the driver/incharge produced GR No.2112 dt.18/07/1995; Challan No.408 dt.18/07/1995 and Bill Proforma dt.17/07/1005 which was not clear and cuttings were there on it. The vehicle, inter-alia, contained 136.80 Qt. Of Sun Flower .....

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ods were released. However, on the date fixed i.e. 05/08/1995 neither the assessee appeared nor any reply was filed on behalf of the assessee and accordingly the Assessing Officer (for short, 'AO') passed an order finding that the goods were imported within the State without declaration form ST-18-A and in view of provisions of Sec. 22-A(7) of the RST Act, imposed penalty @ 30% equivalent to the value of the goods. 3. The matter was assailed before the Deputy Commissioner (Appeals) (for .....

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he DC(A) deleted the penalty. 4. The Revenue assailed the matter before the Tax Board who vide order impugned reversed the finding of the DC(A) taking into consideration the judgment rendered in the case of Guljag Industries Vs. Commercial Taxes Officer: (2007) 7 SCC 269 and also held that show cause notice has been issued to the driver/incharge but representative of the assessee not only appeared but also gave a guarantee bond on behalf of the assessee. Thus, no further notice was necessary to .....

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ry material and the supporting material was not found to be defective or otherwise, then merely because declaration form ST-18-A was not found is not a ground to impose the penalty. 6. Counsel further contended that there was no show cause notice issued to the assessee and he drew attention of this Court towards Annexure-4 of the petition, which is show cause notice dt.20/07/1995 for hearing on 05/08/1997 and submits that this show cause notice does not mention name of the assessee and is addres .....

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an: (1972) 28 STC 699 and Rule 49 of RST Rules, 1995 and thus contended that the penalty being in violation of the principles of natural justice deserves to be quashed & set aside. 7. Per-contra, ld. counsel for the Revenue contended that a security bond was filed by one Guruprasad, Power of Attorney Holder of M/s. ITC Agrotech Limited (assessee herein) dt.25/07/1995 alongwith two sureties namely; (1) Shri C.L. Saboo Director of M/s. Premier Peanut Limited, 100, Industrial Area, Jhotwara, Ja .....

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rescribed under the Act. She contended that on the one hand the assessee took advantage of release of the goods and for no reason thereafter did not appear knowing fully well that the goods have been released and took this plea of non-service of notice which is contrary to the material on record. 8. Counsel further contended that the argument of the counsel for the assessee fall flat when security bond has been submitted and a reply has also been filed. She further contended that admittedly the .....

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06), decided on 27/09/2013, the penalty was rightly imposed by the AO and upheld by the Tax Board which is not required to be interfered with. 9. I have considered the arguments of counsel for the parties and have gone through the order impugned as well as other orders and the record produced by counsel for the Revenue and find the contention of counsel for the revenue to be correct that a security bond was filed by the assessee in Form No. ST-18-B dated 25/07/1995 by one Guruprasad, the power o .....

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was intercepted on 20/07/1995, the security bond within five days was filed on record and therefore, to say that no show cause notice was served on the assessee, in view of the facts and circumstances, looses significance. In letter dt. 01/08/1995, counsel for the assessee though agrees to the show cause notice dt. 20/07/1995 having been issued to Shri Sadhu Singh S/o Labh Singh and states before the Officer that the show cause notice to the driver is not proper but nevertheless goes on supporti .....

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ent being driver/incharge can be deemed and said to be proper. 10. Now, taking the facts into consideration, admittedly, on the vehicle having been intercepted, no declaration form ST-18-A was produced nor any declaration form was produced later on before the AO while as per Sec. 22-A(7) of the RST Act,1954 carrying declaration form is mandatory. It would be appropriate to quote Sec. 22-A(7) of the RST Act, 1954 which read ad- infra:- "22-A Establishment of check-post or barrier and inspect .....

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bed under sub-section (3) or for submission of false declaration or documents a penalty not exceeding 30% of the value of such goods, as may be determined by such officer. Provided that where the goods are being carried without proper documents as required by sub-section (3) or with any false declaration or statements and the owner or the incharge or the driver of the vehicle, boat, or animal carrying such goods is found in collusion for such carrying of goods, the vehicle, boat or animal shall .....

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und guilty second time of the offence mentioned in the preceding proviso and the vehicle, boat or animal carrying the goods may be kept seized and detained for a period not exceeding 30 days after the date of the payment of the penalty or furnishing of the security. (b)Such officer may release any of the goods seized under sub-section (5) or sub-section (6) on payment of the penalty under clause (a) or on furnishing such security in such form as may be prescribed for the payment thereof, as he m .....

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and ST-18-C and analyzed the form. The Apex Court also took into consideration Rule 53 and observed in Para 25 to 29 of the said judgment ad-infra:- "25. There is dichotomy between contravention of Section 78(2) of the said Act which invites strict civil liability on the assessee and the evasion of tax. When a statement of import/export is not filed before the A.O. it results in evasion of tax, however, when the goods in movement are carried without the declaration Form No. 18A/18C then str .....

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ter of quantum of penalty fixed at 30 per cent of the estimated value is to provide to the State a remedy for the loss of revenue. The object behind enactment of Section 78(5) is to emphasise loss of revenue and to provide a remedy for such loss. It is not the object of the said Section to punish the offender for having committed an economic offence and to deter him from committing such offences. The penalty imposed under the said Section 78(5) is a civil liability. Willful consignment is not an .....

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l 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. 28. Moreover, in the present case, we find that goods in movement carried with Form No. 18A/18C. The modus operandi adopted .....

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he language problem. There is no merit in these defences. They are excuses. The declaration forms were unfilled so that they could be used again and again. The forms were collected by the consignee from the said Department. The consignee undertakes to see that the value of the goods is supplied by the consignor. It is not open to the consignee to keep the column in respect of the description of goods as blank. Even the column dealing with nature of transaction is left blank. The consignee is the .....

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in drawing inference of mens rea against the assessees. 29. It has been repeatedly argued before us that apart from the declaration forms the assessees possessed documentary evidence like invoice, books of accounts etc. to support the movement of goods and, therefore, it was open to the assessees to show to the competent authority that there was no intention to evade the tax. We find no merit in this argument. Firstly, we are concerned with contravention of Section 78(2) which requires the good .....

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ss the taxable goods. Moreover, in the absence of value/price it is not possible for the A.O. to arrive at the taxable turnover as defined under Section 2(42) of the said Act. therefore, we have emphasized the words "material particulars" in the present case. It is not open to the assessees to contend that in certain cases of interstate 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 .....

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xempt. 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." 13. In my view, the judgment answers the self same controversy. Even the Apex Court has held that mens rea is not essential in such a situation. 14. The Larger Bench of this Court in its order dt.26/02/2015 rendered in the case of Assistant Commercial Taxes Officer Vs. M .....

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nt 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- clause(a) of clause(4) of Section 78 of the RST Act, 1994, which provides that where any goods in movement, other than exemp .....

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uspicion 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 {33} DB SALES TAX REVISION- 92/1999 & OTHER CONNECTED MATTERS 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 enters or leaves the nearest check-post of the State. It is only when a person .....

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r 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 Hon'ble Supreme Court in Guljag Industries Vs. Commercial Taxes Officer(supra), in which it has been clearly held in para 30, after quoting the provisions of Section 78, that; "In the present case also the statute provides for a hearing. However, that hearing is only to find out whether the assessee has contravened Section .....

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terms of Section 78(5) of the RST Act, 1994. {34} DB SALES TAX REVISION- 92/1999 & OTHER CONNECTED MATTERS (ii) The mens rea is not required to be proved as necessary ingredient for imposition of penalty under sub-section (5) of Section 78, on proving violation of sub-section(2) of Section 78 of the RST Act, 1994. (iii) The amendment to Rule 55 of the RST Rules, 1995, in pursuance to the decision of the Hon'ble Supreme Court in State of Rajasthan And Another Vs. M/s. D.P. Metals(supra), .....

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urt in the case of M/s Bishambhar Dayal Shankar Lal Vs. Assistant Commercial Taxes Officer, Alwar (SB Sales Tax Revision No.99/2006), decided on 27/09/2013 came to the same conclusion. That apart, this Court in the case of M/s Agrotech Foods Limited V/s The Assistant Commercial Taxes Officer, Flying (SB Sales Tax Revision Petition No.189/2012), in the identical facts and circumstances, has dismissed the petition of the assessee on 15/09/2016 and thus, the order passed by the Tax Board in the pre .....

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erence to the assessment proceedings. The CTO, Special Circle, Jaipur, who was going ahead with the assessment proceedings, noticed that the Return was also filed late and asked the accountant as well as counsel for the assessee to adduce reasons for late submission of Return and they could not offer satisfactory explanation for the delay and therefore, a penalty of ₹ 1,000/- was imposed u/Sec. 16(1)(c) of the RST Act. It is in view of these facts that this Court held that notice in case t .....

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