1997 (9) TMI 562 - AT - VAT and Sales Tax

Issues Involved:
1. Non-production of declaration form ST-18A.
2. Discrepancy in the value of goods between the bilty and the consignment note.
3. Imposition of penalty under section 22A(7) of the Rajasthan Sales Tax Act, 1954.
4. Interpretation of section 22A(3) and rule 62A(3) of the Rajasthan Sales Tax Rules, 1955.
5. Consideration of mens rea (intent to evade tax) in penalty proceedings.

Detailed Analysis:

1. Non-production of Declaration Form ST-18A:
The respondent-firm did not produce the declaration form ST-18A as required under section 22A(3) of the Rajasthan Sales Tax Act, 1954, and rule 62A(3) of the Rajasthan Sales Tax Rules, 1955, at the time of importing goods into the State. The firm applied for the form on February 7, 1992, and obtained it on February 18, 1992, after the inspection on February 5, 1992. The Tribunal concluded that the liability for penalty was incurred the moment the goods were imported without the declaration form, and subsequent production of the form did not absolve the respondent-firm from the liability.

2. Discrepancy in the Value of Goods:
During the inspection, a discrepancy was found between the value of goods mentioned in bilty No. 126300 (Rs. 1,98,275) and the consignment note No. 009 (Rs. 1,80,250). The respondent-firm explained that the discrepancy was due to the transporter's estimate, and one case was a free sample. The Tribunal noted that no inquiry was made from the transporter regarding the basis of the valuation.

3. Imposition of Penalty under Section 22A(7):
The ACTO imposed a penalty of Rs. 59,483 on the respondent-firm under section 22A(7) for non-production of the declaration form and the discrepancy in the value of goods. The Deputy Commissioner (Appeals) and the Tax Board set aside the penalty, stating that there was no finding of mala fide intention to evade tax and the declaration form was produced before the penalty order was passed. The Tribunal, however, held that the breach of provisions was complete when the goods were not accompanied by the declaration form, and subsequent production did not absolve the firm from penalty.

4. Interpretation of Section 22A(3) and Rule 62A(3):
Section 22A(3) mandates that the owner or person in charge of the vehicle must carry and produce the required documents, including the declaration form ST-18A, on demand. Rule 62A(3) specifies that the declaration form must be furnished at the check-post. The Tribunal emphasized that the duty to carry and produce the documents is mandatory, and failure to do so incurs liability for penalty. The Tribunal rejected the argument that subsequent production of the declaration form constituted compliance.

5. Consideration of Mens Rea in Penalty Proceedings:
The Tribunal clarified that mens rea (intent to evade tax) is not a necessary element at the time of the commission of the offence (non-production of documents). However, it becomes relevant during the imposition of penalty to determine the quantum. The Tribunal held that the explanation given by the respondent-firm for the delay in obtaining the declaration form was unsatisfactory and did not absolve them from penalty.

Separate Judgments:
- Judicial Member (J.P. Bansal): Allowed the revision petition, set aside the orders of the Deputy Commissioner (Appeals) and the Tax Board, and restored the penalty order of the ACTO.
- Chairman (Milap Chandra Jain): Dissented, stating that penalty could not be imposed as the declaration form was produced within 15 days as required by the then rule 63(3), and there was no finding of false declaration or documents.
- Technical Member (R.K. Nair): Concurred with the Chairman, emphasizing that the imposition of penalty is discretionary and mens rea is a relevant consideration. Dismissed the revision petition.

Conclusion:
The majority decision dismissed the revision petition, upholding the orders of the Deputy Commissioner (Appeals) and the Tax Board, and emphasized that the imposition of penalty under section 22A(7) is discretionary and must consider the totality of circumstances, including the absence of intent to evade tax.

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