2002 (4) TMI 969 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the admission of the representative of the petitioner firm regarding the absence of Declaration Form ST. 18-A is sufficient to prove mens rea to avoid tax.
2. Whether the petitioner firm can be held liable for the negligence or irregularity committed by the transporter in not bringing the requisite Declaration Form ST. 18-A.

Detailed Analysis:

Issue 1: Mens Rea and Admission of Absence of Declaration Form ST. 18-A

The Court addressed the question of whether the admission by the representative of the petitioner firm about the absence of Declaration Form ST. 18-A is sufficient to establish mens rea for avoiding tax. The petitioner argued that the penalty, being penal in nature, cannot be imposed unless mens rea is established. The Court, however, noted that the penalty under Section 22-A(7) of the Rajasthan Sales Tax Act, 1954, is a civil obligation and does not necessarily require proof of mens rea. The Court referenced several judgments, including the Supreme Court's decision in Director of Enforcement v. MCTM Corporation Pvt. Ltd., which clarified that mens rea is not an essential ingredient for imposing penalties in civil matters. The Court also cited Gujarat Travancore Agency v. Commissioner of Income Tax, emphasizing that penalties in tax matters are remedial and coercive in nature, not requiring proof of guilty intention.

Issue 2: Liability for Transporter's Negligence

The second issue was whether the petitioner firm could be held liable for the transporter's failure to carry the required Declaration Form ST. 18-A. The Court ruled that the statutory obligation to ensure the goods are accompanied by the necessary documents lies with the owner or person in charge of the goods. The Court referenced Bengal Iron Merchant Association v. Commissioner, Commercial Tax, which held that the consignee is liable for penalties if the requisite declaration forms are not produced, regardless of the consignor's actions. The Court further noted that the petitioner firm admitted the absence of the Declaration Form ST. 18-A, and thus, the imposition of the penalty was justified.

Conclusion:

The Court concluded that mens rea is not a necessary element for imposing penalties under Section 22-A(7) of the Rajasthan Sales Tax Act, 1954. The petitioner firm's admission of not having the required Declaration Form ST. 18-A suffices for the imposition of the penalty. Additionally, the petitioner firm is liable for the transporter's failure to carry the requisite documents, as the statutory obligation rests with the owner or person in charge of the goods. The Court dismissed both revision petitions, upholding the penalties imposed by the Assessing Authority.