1959 (9) TMI 34 - HC - VAT and Sales Tax

Summary

Issues:
Acquittal of the respondents in a case involving breach of sales tax rules and subsequent appeal by the Public Prosecutor.

Analysis:
The case involved an appeal by the Public Prosecutor against the acquittal of two respondents, partners of a cloth business firm, for breaching sales tax rules. The charge was based on the respondents' failure to enter specific cloth items in their day book as required by Andhra Pradesh General Sales Tax Rules. The defense claimed non-entry due to various reasons, such as weavers not showing up or goods not immediately needed. The relevant rules, including Rule 45(1) and Rule 64, mandated accurate accounts in authorized languages showing goods' value and purchase details. The breach of Rule 45(1) was punishable under Rule 64, requiring guilt for liability. The defense argued that entries need only be made before goods are sold, but the court held that accounts must be kept up-to-date without a time margin. The Magistrate's interpretation of compliance with the rules was deemed erroneous, emphasizing the necessity of accurate and timely entries.

The defense further contended that the respondents' actions lacked intent to evade tax, citing the necessity of proving mens rea in criminal cases. However, the court clarified that mens rea under the rules pertained to failing to ensure rule compliance, not necessarily evading tax intentionally. The court found the respondents guilty of breaching Rule 45(1) by delaying entry of goods' value in their accounts, leading to liability under Rule 64. The court acknowledged the technical nature of the offense due to no alleged malicious intent by the respondents. Consequently, the respondents were sentenced to pay a fine with a one-week imprisonment term in default, considering their previous practice and lack of objection raised earlier. The appeal by the Public Prosecutor was allowed, overturning the respondents' acquittal and establishing their guilt under the sales tax rules.