2007 (4) TMI 637 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the laundry machine is classified as "electrical goods" under the notification dated October 31, 1986.
2. Whether the penalty imposed under section 22A(7) of the Rajasthan Sales Tax Act, 1954 was justified.

Issue-wise Detailed Analysis:

1. Classification of Laundry Machine as "Electrical Goods":

The core issue was whether the laundry machine falls under the category of "electrical goods" as per the notification dated October 31, 1986. The Tribunal concluded that the laundry machine was not "electrical goods" within the meaning of the circular. The notification listed various items, including "all kinds of electrical goods," but did not specifically mention laundry machines.

The Tribunal observed, "Admittedly, laundry machine was being transported in the truck. It was not an electrical goods within the meaning of the above quoted circular. Form No. ST-18 was not thus required to be carried on with the vehicle in this case."

The petitioner argued that since the laundry machine operates on electric energy, it should be classified as "electrical goods." The petitioner cited judgments from the Madras High Court, including William Jacks and Co. Ltd. v. State of Madras [1955] 6 STC 301 and State of Tamil Nadu v. Best and Co. (P.) Ltd. [1984] 57 STC 174, to support the claim that goods requiring electric energy for operation are "electrical goods."

Conversely, the respondent's counsel argued that the laundry machine, although using electric energy, should not be classified as "electrical goods" as understood by commercial men. The respondent cited various judgments, including K.B. Dani v. State of Karnataka [1979] 44 STC 276 and Hind Rectifiers Ltd. v. State of Maharashtra [1981] 47 STC 303, to emphasize that the intrinsic nature and purpose of the goods should determine their classification.

The court noted, "As to whether the laundry machine is covered by the expression 'electrical goods' in the notification dated October 31, 1986 what is important to be seen is: is it intrinsically that such machines are treated as 'electrical goods' by the commercial men, though electrical energy is used for its operation. We do not think so."

2. Justification of Penalty under Section 22A(7):

Assuming the laundry machine was "electrical goods," the issue shifted to whether the penalty imposed was justified. Section 22A of the Rajasthan Sales Tax Act, 1954, mandates carrying specific documents during the transportation of goods. The relevant subsections (3) and (7)(a) outline the requirement for a goods vehicle record and the imposition of penalties for non-compliance.

The court acknowledged that the respondent did not present the required form ST-18 at the time of inspection but did so within 15 days. The Tribunal found that the respondent was not a registered dealer and brought the laundry machine for personal use, which was corroborated by the issuance of form ST-18 by the Commercial Taxes Officer.

The court stated, "The only lapse on the part of the respondent was that at the time when the goods were transported, form ST-18 was not presented before the concerned check-post. The Deputy Commissioner (Appeals) considered this aspect in his order thus: The reasons given by the Deputy Commissioner (Appeals) are good enough for setting aside the order of penalty passed by the Assistant Commercial Taxes Officer."

The court further noted that the bill and other documents were available with the driver at the time of inspection, and the required form ST-18 was produced within fifteen days. The court concluded, "It is true that for imposition of penalty under section 22A(7) mens rea or guilty mind is not necessary but never-the-less the facts do not justify the imposition of penalty in the present case."

Conclusion:

The court upheld the Tribunal's decision, which restored the order of the Deputy Commissioner (Appeals) setting aside the penalty. The judgment concluded, "We are, thus, satisfied with the order passed by the Tribunal restoring the order of the Deputy Commissioner (Appeals) dated March 28, 1995. The order of the Tribunal does not call for any interference in this writ petition."

Disposition:

The writ petition was dismissed with no order as to costs.

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