2013 (3) TMI 631 - HC - VAT and Sales Tax

Whether, in nonfurnishing of declaration form ST-18A by the assessee with the goods in question which were notified goods did not prove mens rea on part of the assessee ?

Summary

Issues:
1. Penalty imposition for non-furnishing of declaration form ST-18A.
2. Compliance with provisions of the Rajasthan Sales Tax Act and Rules.
3. Validity of penalty imposition based on the amendment of section 78(5).
4. Presumption of guilty intention for not producing declaration form ST-18A.
5. Non-production of requisite documents and its implication on mens rea.
6. Justification of accepting the appeal by the Deputy Commissioner (Appeals).
7. Justification of rejecting the appeal by the Tax Board.

Issue 1: Penalty imposition for non-furnishing of declaration form ST-18A
The case involved a penalty imposed by the Assistant Commercial Taxes Officer (ACTO) on the owner of goods for not producing declaration form ST-18A during a stock transfer. The Deputy Commissioner (Appeals) and the Tax Board, Ajmer, subsequently deleted the penalty. The High Court noted that prior to March 20, 2000, there was no legal requirement to carry form ST-18A for stock transfers. As the goods were transmitted before this date, the penalty imposition was deemed unjustified, and the decisions of the lower authorities were upheld.

Issue 2: Compliance with provisions of the Rajasthan Sales Tax Act and Rules
The petitioner-Department argued that the absence of form ST-18A warranted the penalty due to its mandatory nature for stock transfers. However, the respondent contended that the transaction predated the legal requirement for carrying the form. The High Court examined the legal provisions and notifications, concluding that the absence of form ST-18A before March 20, 2000, did not justify the penalty under section 78(5) of the Act. The Court emphasized that all other relevant documents were in order, supporting the respondent's position.

Issue 3: Validity of penalty imposition based on the amendment of section 78(5)
The High Court addressed whether the amendment to section 78(5) in 2002 impacted the penalty imposition in this case. It was established that since the transaction occurred before the legal obligation to carry form ST-18A, the amendment did not retroactively apply. Therefore, the penalty deletion by the Deputy Commissioner (Appeals) and the Tax Board was deemed appropriate and in line with the legal framework at the time of the incident.

Issue 4: Presumption of guilty intention for not producing declaration form ST-18A
The petitioner argued that the absence of form ST-18A indicated a guilty intention on the part of the respondent. However, the High Court clarified that in the absence of a legal requirement to carry the form before March 20, 2000, no presumption of guilt could be drawn solely based on its non-production. The Court referenced a similar case to support this interpretation, emphasizing the importance of legal compliance and the specific circumstances of the case.

Issue 5: Non-production of requisite documents and its implication on mens rea
The High Court considered whether the non-production of necessary documents implied mens rea, or guilty intention, on the part of the assessee. Citing relevant legal precedents, the Court determined that in this case, where the transaction predated the obligation to carry form ST-18A, the non-production of the form did not automatically signify mens rea. The Court emphasized the need to assess compliance based on the legal requirements applicable at the time of the incident.

Issue 6: Justification of accepting the appeal by the Deputy Commissioner (Appeals)
The High Court reviewed the decision of the Deputy Commissioner (Appeals) to accept the appeal filed by the respondent. Given the absence of a legal obligation to carry form ST-18A at the time of the transaction, the Court found that the Deputy Commissioner's decision to delete the penalty was justified. The Court upheld the lower authority's decision based on the legal provisions and notifications in force during the relevant period.

Issue 7: Justification of rejecting the appeal by the Tax Board
The High Court examined the Tax Board's decision to reject the appeal filed by the petitioner-Department. Considering the legal framework and the absence of a requirement to carry form ST-18A before March 20, 2000, the Court found that the Tax Board's decision to confirm the Deputy Commissioner's order was appropriate. The Court concluded that the Tax Board did not err in upholding the deletion of the penalty imposed by the ACTO, given the circumstances of the case and the applicable legal provisions.

In conclusion, the High Court dismissed the revision petition, affirming the decisions of the Deputy Commissioner (Appeals) and the Tax Board, Ajmer. The Court ruled in favor of the respondent-assessee, emphasizing the importance of legal compliance and the specific timeline of the transaction in determining the justification for penalty imposition under the Rajasthan Sales Tax Act.