2015 (5) TMI 1050 - HC - VAT and Sales Tax

Imposition of penalty - section 22A(7) of the Rajasthan Sales Tax Act 1994 - branch/stock transfer - mobil oil of the respondent-assessee was being carried in vehicle - declaration form ST-18A was not available with the vehicle - requirement of mens rea - Held that - in so far as the issue of mens rea is concerned when the Larger Bench of this court has already opined that mens rea is not essential therefore the issue with regard to mens rea is decided in favour of the Revenue but in the instant case the penalty is not leviable as admittedly the vehicle was intercepted on July 13 1995 and on or before March 30 2000 in the light of the notification referred to above there was no requirement of carryingdeclaration form ST-18A and once there was no requirement or necessity of carrying the declaration form ST-18A in a case of branch/stock transfer then penalty under section 22A(7) is not required to be levied. Admittedly it is a case of branch/stock transfer and therefore on this alternative plea and in the light of the judgment in assessees own case reported in 2015 (11) TMI 1078 - RAJASTHAN HIGH COURT and the judgment rendered by this court in the case of Assistant Commercial Taxes Officer v. Kamlesh Kumar Rajesh Kumar 2013 (3) TMI 631 - RAJASTHAN HIGH COURT the instant revision petition deserves to be dismissed though for different reasons. - Decided against the revenue

Summary

Issues:
1. Interpretation of penalty under section 22A(7) of the Rajasthan Sales Tax Act, 1994.
2. Relevance of mens rea in determining liability for penalty under section 78(5) of the RST Act, 1994.
3. Application of the amendment to rule 55 of the RST Rules, 1995 in penalty imposition.
4. Requirement of carrying declaration form ST-18A in cases of branch/stock transfer.

Analysis:

1. The judgment dealt with a sales tax revision petition challenging a penalty imposed on the respondent-assessee under section 22A(7) of the Rajasthan Sales Tax Act, 1994. The Larger Bench of the court was constituted to resolve conflicting opinions on various questions related to penalty imposition.

2. The Larger Bench, through its order, clarified that mens rea is not relevant for determining the liability for penalty under section 78(5) of the RST Act, 1994. It was also established that mens rea is not a necessary ingredient for imposing a penalty under sub-section (5) of section 78, even upon proving a violation of sub-section (2) of the same section.

3. The amendment to rule 55 of the RST Rules, 1995, following a Supreme Court decision, empowered the authority to inquire into violations without the need to establish mens rea for imposing penalties. The court emphasized that the authority's role is to investigate violations, not to adjudicate on the presence of mens rea for penalty imposition.

4. In the case at hand, the court considered the facts where a penalty was imposed for not carrying declaration form ST-18A during a branch/stock transfer. The court noted that as per a notification, there was no requirement to carry the declaration form before a specific date. Relying on previous judgments and interpretations, the court concluded that since no declaration form was necessary in this scenario, the penalty under section 22A(7) was not applicable, leading to the dismissal of the revision petition in favor of the assessee.

In conclusion, the judgment clarified the interpretation of penalty provisions under the Rajasthan Sales Tax Act, emphasizing the relevance of mens rea, application of rule amendments, and specific requirements for carrying certain forms in determining penalty liability.