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1987 (10) TMI 382

assessment year 1973-74 by the assessee, carrying on the business of Rice Mill, against the Tribunal's order dated 7.8 1986 upholding the penalty of ₹ 12,000/- as against the total penalty of ₹ 17,000/- imposed by the Sales Tax Officer under Section 10 (a) read with Section 10 (b) of Central Sales Tax Act, 1956, (briefly 'the Act, 1956'). 2. The assessee was registered under the Central Sales Tax Act, 1936. A registration certificate was issued to the assessee under Section 7 (2) of the aforesaid Act enabling the assessee to import 'mill stores' for use in the manufacturing process of rice. The assessee imported Automatic Parboil Paddy Drier, Paddy Dehusker and Welding Machine worth ₹ 1,60,000/-, ₹ .....

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penalty for the offence envisaged by Section 10 (b) of the Act, 1956, mens rea is necessary. In Commissioner of Sales Tax, Madhya Pradesh, Indore v. Bombay Garage, (1984) 57 STC 67, the Madhya Pradesh High Court took the view that the expression 'falsely represents' clearly shows that the element of mens rea is necessary component of the offence. If the registered dealer honestly believes that any particular goods are embraced by certificate of registration and in that belief makes a representation he cannot be held guilty of the offence under Section 10 (b) of the Act, 1956 and no penalty can be imposed pnder Section 10-A of the Act. In State of Tamil Nadu v. Gemini Studios, (1975) 36 S.T-C. 357? the Madras High Court took precisel .....

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the afore-mentioned authorities, with which I fully agree, it must be held that there was no false representation on the part of the assessee and, therefore, no penalty is exigible under Section 10-a, read with Section 10 (b) of the Act, 1956. 8. The assessee right from the beginning explained before the authorities that it remained under a bona fide belief that either machinery imported thereby was covered by the term 'mill stores', which it was authorised to import under the certificate of registration. 9. Relying on Commissioner of Sales Tax v. Aftab Husain Imdad Husain, (1970) 25 S.T.C. 471), in which it was held that the expression 'mill stores''consisted of items such as small tools and spare parts of machinery, wh .....

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: Whether or not for levying penalty for the offence, contemplated by Section 10 (b), mean rea is necessary. There is no reason to doubt or disturb the factual finding recorded by the A C.(J). Moreover, the facts and circumstances of the case clearly support the factual finding, as recorded by the A.C. (J). The Tribunal observes that when the assessee discovered the fact that the machinery imported thereby was not covered by the term mill stores', it soon got the certificate of registration amended, in that the amended certificate of registration enabled the assessee to import all kinds of machinery. It goes to show that there was no mens rea on the part of the assessee. When the assessee can get the certificate of registration amended .....

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