TMI Blog2003 (10) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... reconsideration, therefore, I have given an opportunity to them to address the Court on the question whether any reconsideration is considered necessary for the purposes of judging whether mens rea has to be established before any penalty can be levied for the alleged violations. 3. Learned counsel for businessmen have submitted that the Hon'ble Supreme Court in the case of Hindustan Steel Ltd. v. The State of Orissa (2), has held that the process of imposing penalty is akin to a proceeding which is quasi-criminal in character and penalty will not be imposed unless the party obliged, acts deliberately in defiance of law and was guilty of conduct contumacious or dishonest or acted in disregard of its obligation, It has further been held that the penalty will also not be imposed merely because it is lawful to do so, When there is a technical or venial breach of the provisions of the Act or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed in the Statute or such entity has believed and such belief is genuine and honest belief, no case for penalty was made out. In the case of Hindustan Steel Ltd. (supra), the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Supreme Court has observed as under :- 31. 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 intent, It is not possible to agree with the counsel for the respondents that breach referred to in Section 78(5) can be regarded as technical or venial. Once the ingredients of Section 78(5) are established, after giving a hearing and complying with the principles of natural justice, there is no discretion not to levy or levy lesser amount of penalty. If by mistake some of the documents are not readily available at the time of checking, principles of natural justice may require some opportunity being given to produce the same. This provision cannot be read as to imply that the penalty of 30 per cent is the maximum and lesser pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engagement it would not come within the definition of forfeiture. This word 'forfeiture' must bear the same meaning of a penalty for breach of a prohibitory direction. The fact that there is arithmetical identity, assuming it to be so, between the figures of the illegal collections made by the dealers and the amounts forfeited to the State cannot create a conceptual confusion that what is provided is not punishment but a transference of funds. If this view be correct, and we hold so, the legislature, by inflicting the forfeiture, does not go outside the crease when it hits out against the dealer and deprives him, by the penalty of the law, of the amount illegally gathered from the customers. The Criminal Procedure Code, Customs and Excise Laws and several other penal statutes in India have used diction which accepts forfeiture as a kind of penalty. When discussing the rulings of this Court we will explore whether this true nature of 'forfeiture' is contradicted by anything we can find in Section 37 (1), 46 or 63. Even here we may reject the notion that a penalty or a punishment cannot be cast in the form of an absolute or non-fault liability but must be precede ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mens rea is an ingredient which is looked upon with concern by the courts. But in cases of strict liability statutes, fault has to be judged as has been defined in the statute and if in the language of the statute, the default has been made to be levied with penalty, then searching for means rea would be giving a meaning which is not there in the scheme of things. In a Queen's Bench decision in the matter of Sherras v. De. Rutzen (7), it has been emphasised that the doctrine of mens rea is an essential ingredient in every offence except in three kinds of cases, (1) cases under criminal in any real sense but which is in the public interest are prohibited under a penalty e.g. Revenue Acts, (2) public nuisance and (3) cases criminal in form but which are really only a summary mode of enforcing a civil right. 10. Thus, it can be seen that in revenue laws, public nuisance and civil rights, mens rea has not been seen to be of greater significance in English Law and there are exception to the rules of mens rea being present. Taxation statute being an Act in the nature of Revenue Act, British Courts too have held that mens rea is not an ingredient which requires to be present whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, only because of the incident of the consignor being a person from non-Hindi speaking State. In both these States, Hindi speaking personnel are available. Not only this, a large number of the Marwari businessmen have migrated to these places. The people belonging to State of Rajasthan has a sizeable presence in the business circles of both the States. Thus, any difficulty could have been resolved by reference to Hindi speaking persons around. As has been held in the matter of State of Raj. v. D.P. Metals that incomplete documentation shows the intention of the assessee to evade the tax. Such can be seen in this respect in the cases in hand. 15. Thus, there being interpretation of the statutes available in favour of Mutha Premraj (supra), along with the decisions of the various courts referred to herein above, it does not appear to be a case where this Court would feel persuaded to observe that there is a case for reconsideration of the law laid down in Mutha Premraj (supra). Thus, it is held that the law laid down in Mutha Premraj (supra), covers these cases and the liability anulled by the Tax Board has been wrongly done. 16. The judgment of the Tax Board is, therefore, li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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