2000 (1) TMI 945 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of the penalty imposed for carrying an unfilled declaration form S.T. 18A.
2. Interpretation of Section 78(5) of the Rajasthan Sales Tax Act, 1994 in comparison to Section 22A(7) of the repealed Act.
3. Consideration of mens rea (intention) in the imposition of penalties under the Act.

Detailed Analysis:

1. Legality of the penalty imposed for carrying an unfilled declaration form S.T. 18A:

The petitioner challenged the order dated January 7, 1999, by the Rajasthan Tax Board, which set aside the penalty imposed by the assessing officer and affirmed by the Deputy Commissioner (Appeals). The penalty was levied for carrying an unfilled declaration form S.T. 18A along with goods in transit, which was deemed a breach of Section 78 of the Rajasthan Sales Tax Act, 1994.

2. Interpretation of Section 78(5) of the Rajasthan Sales Tax Act, 1994 in comparison to Section 22A(7) of the repealed Act:

The court compared Section 78(5) and (6) of the 1994 Act with Section 22A(7) of the repealed 1954 Act. The new Act includes additional provisions for levying penalties against the owner of goods if they apply to be impleaded in the proceedings. However, the requirement of giving an opportunity of hearing and holding an enquiry before levying a penalty remains consistent in both Acts.

3. Consideration of mens rea in the imposition of penalties under the Act:

The court referenced the Mahaveer Conductors case, which established that the levy of penalty is not automatic upon finding goods unaccompanied by requisite documents. The opportunity to show that no penalty is leviable must be provided. In the present case, the goods were accompanied by all relevant documents except for the incomplete form S.T. 18A.

The court noted that Rule 53 of the Rajasthan Sales Tax Rules, 1995, requires the consignee to furnish a declaration in form S.T. 18A, filled in ink, and carried with the goods. However, the consignee often sends the form to the consignor before knowing all details about the goods. The court found that the consignee cannot be held responsible for carrying a blank form if they have done all they could.

The court concluded that carrying an unfilled form S.T. 18A did not constitute a breach of Section 78(5) of the Act. The substantive part of the declaration was provided, and other details were available from accompanying documents. The court viewed this as a technical breach rather than an intentional evasion of tax, aligning with the Hindustan Steel Ltd. v. State of Orissa case, which emphasized that penalties should not be imposed for technical or venial breaches of procedural provisions.

Conclusion:

The revision petition by the Revenue was dismissed, affirming the Rajasthan Tax Board's decision to set aside the penalty imposed on the assessee-respondent. The court held that the assessee did not breach Section 78(5) of the Rajasthan Sales Tax Act, 1994, by carrying an unfilled form S.T. 18A, as the substantive declaration was provided and the breach was deemed technical. The petition was dismissed with no order as to costs.