2000 (11) TMI 1239 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of penalty proceedings for carrying incomplete Form ST 18A.
2. Validity of penalty imposition under Section 78(5) of the Rajasthan Sales Tax Act, 1994.
3. Mandatory requirement of Form ST 18A in transit.
4. Jurisdiction of Rajasthan Taxation Tribunal to entertain the application against the show cause notice.
5. Interpretation of Section 78 of the Rajasthan Sales Tax Act and Rule 53.

Detailed Analysis:

Issue 1: Legality of Penalty Proceedings for Carrying Incomplete Form ST 18A
The writ petition challenges the penalty imposed solely because Form ST 18A was incomplete. The Tribunal found that the incomplete form did not indicate an intention to evade tax. The goods were accompanied by all necessary documents, including a partially filled Form ST 18A. The Tribunal held that the proceedings under Section 78 for the imposition of penalty were not warranted as there was no intention to evade tax.

Issue 2: Validity of Penalty Imposition under Section 78(5) of the Rajasthan Sales Tax Act, 1994
The Tribunal concluded that the penalty under Section 78(5) was not justified. It emphasized that penalty imposition is not automatic and requires an intention to evade tax. The Tribunal noted that the incomplete Form ST 18A was due to the form being in Hindi, which the Tamil Nadu dealer could not understand. The Tribunal held that there was no mens rea or intention to evade tax, thus quashing the penalty proceedings.

Issue 3: Mandatory Requirement of Form ST 18A in Transit
The Tribunal acknowledged that carrying a duly filled Form ST 18A is a mandatory requirement under Section 78 and Rule 53. However, it also noted that the failure to fully complete the form did not automatically warrant a penalty if there was no intention to evade tax. The Tribunal observed that all other requisite documents were in order and there was no attempt to evade the furnishing of the declaration form.

Issue 4: Jurisdiction of Rajasthan Taxation Tribunal to Entertain the Application Against the Show Cause Notice
The Tribunal held that its extraordinary jurisdiction could be invoked even in the case of notices. It stated that substantial questions of law relating to the interpretation of Section 78 and Rule 53 justified the entertainment of the original application without exhausting alternative remedies. The Tribunal dismissed the preliminary objection that the respondent should have approached the competent authority under the Act.

Issue 5: Interpretation of Section 78 of the Rajasthan Sales Tax Act and Rule 53
The Tribunal interpreted Section 78 and Rule 53 to mean that while carrying a duly filled Form ST 18A is mandatory, the imposition of penalty requires an intention to evade tax. The Tribunal referred to previous judgments, including the case of Assistant Commercial Taxes Officer, Flying Squad, Raniwada Dist Jalore v. Voltas Limited, which held that carrying an unfilled Form ST 18A does not constitute a breach of Section 78(5) if there is no mens rea.

Conclusion:
The High Court upheld the Tribunal's decision, dismissing the writ petition. It agreed that the penalty proceedings were misconceived as there was no intention to evade tax. The High Court emphasized the quasi-criminal nature of penalty proceedings and the necessity of proving mens rea. The writ petition was dismissed, and the penalty proceedings were quashed. The State Government was advised to consider introducing bilingual forms to avoid similar issues in the future.