1968 (12) TMI 81 - HC - VAT and Sales Tax

Summary

Issues:
- State Government's revision petitions against Sales Tax Appellate Tribunal's order of remand
- Interpretation of clauses (b) and (d) of section 10 of the Central Sales Tax Act
- Mens rea as an ingredient of the offence under section 10(d)
- Duty of Commercial Tax Officer to record findings on reasonable excuse for failure to use goods
- Authority to amend orders made by the Tribunal

Analysis:

The judgment of the Mysore High Court involved revision petitions by the State Government challenging the Sales Tax Appellate Tribunal's order of remand in two appeals arising from a proceeding under section 10-A of the Central Sales Tax Act. The Commercial Tax Officer had found the respondent, a saree manufacturer, guilty of offences under clauses (b) and (d) of section 10 of the Act, imposing a penalty for each offence. The Deputy Commissioner set aside the penalty for the offence under section 10(b) but confirmed it for the offence under section 10(d.

The Sales Tax Appellate Tribunal remanded the matter to the Deputy Commissioner only concerning the offence under section 10(d), disagreeing with the Deputy Commissioner's view on mens rea as an ingredient of the offence. The Tribunal held that the Commercial Tax Officer should have recorded a finding on the existence of mens rea for the offence under section 10(d, leading to the remand for proper disposal. However, the High Court clarified that mens rea is not an element of the offence under section 10(d), which pertains to the failure to use purchased goods for specified purposes without reasonable excuse.

The Court emphasized that the Commercial Tax Officer failed to record findings on whether there was a reasonable excuse for the respondent's failure to use the goods as required by law. The Deputy Commissioner's assumption that the Commercial Tax Officer had made such findings was incorrect. Referring to a previous judgment, the Court reiterated that it is the Commercial Tax Officer's duty to establish the absence of a reasonable excuse for non-compliance, which was not done in this case.

Given the Commercial Tax Officer's failure to fulfill this obligation, the Court set aside the penalties imposed for both offences under section 10(d). The Court also overturned the Deputy Commissioner's decision to confirm the penalty for the offence under section 10(d). However, the penalty set aside by the Deputy Commissioner for the offence under section 10(b) remained undisturbed. Consequently, the penalties imposed by the Commercial Tax Officer for both offences were annulled, and no costs were awarded.

In conclusion, the Court exercised its authority to amend the Tribunal's order, emphasizing the importance of the Commercial Tax Officer's role in establishing the absence of a reasonable excuse for non-compliance with the Act's provisions.