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2019 (11) TMI 1605 - HC - VAT and Sales TaxDetention of goods - Requirement of Form No.49 - Supari and Elaichi - whether these items comes under Kirana goods for which Form No.49 is essential or not - HELD THAT - A similar controversy arose in the case of CADBURY INDIA LTD. MALANPUR DISTT. BHIND AND ORS. VERSUS STATE OF M.P. AND ORS. 2007 (4) TMI 767 - MADHYA PRADESH HIGH COURT wherein this Court has dealt with non-production of documents i.e. Form No.75 - In light of the aforesaid judgment on account of non-production of Form No.49 at the relevant point of time penalty has been imposed upon the appellant. Mere non-production of document i.e. Form No.49 in the peculiar facts and circumstances of the case does not establish any intention of the part of the Company to evade the tax. The lapse found established is a technical lapse unaccompanied by any malafide or dishonest intention and therefore can be classified as a bonafide mistake. Hence the action of the Department in imposing penalty deserves to be quashed - The Explanation to Section 57(8) of the M. P. VAT Act 2002 makes it very clear that in those circumstances where there is no attempt to evade tax in respect of goods it shall be deemed that there is no violation of provision of sub-section (2) has taken place. The appellate Board has not at all considered the aforesaid explanation while affirming the penalty order and therefore the question of law is answered in favour of the assessee. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Requirement of Form No.49 for the transportation of goods. 2. Validity of the penalty imposed under Section 57(8) of the Madhya Pradesh VAT Act, 2002. 3. Consideration of explanation to Section 57(8) regarding the possibility of tax evasion. 4. Evaluation of the appellant's intent and mens rea in the context of tax evasion. Issue-wise Detailed Analysis: 1. Requirement of Form No.49 for the transportation of goods: The appellant, a registered company under the Companies Act, 1956, and a dealer under the Madhya Pradesh VAT Act, 2002, dispatched Scented Elaichi and Scented Supari from Delhi to Indore. The truck was detained at the Madhya Pradesh border for not having Form No.49. The appellant argued that the transported goods were not listed in the notification requiring Form No.49. The court examined whether Form No.49 was necessary for these goods. 2. Validity of the penalty imposed under Section 57(8) of the Madhya Pradesh VAT Act, 2002: The appellant challenged the penalty imposed by the Assessing Officer under Section 57(8) of the Act, arguing that the officer did not consider the explanation provided under Section 57(8). The appellant had furnished all necessary documents except Form No.49 and had paid VAT at 13%, higher than the 5% applicable for Kirana goods. The court noted that the appellant had provided all required documents and there was no evidence of tax evasion. 3. Consideration of explanation to Section 57(8) regarding the possibility of tax evasion: The appellant contended that the appellate Board ignored the explanation to Section 57(8), which states that if there is no possibility of sale within Madhya Pradesh or no attempt to evade tax, it shall be deemed that no violation occurred. The court agreed, citing that the appellant had provided sufficient evidence showing no intent to evade tax, and the goods were transported with proper documentation. 4. Evaluation of the appellant's intent and mens rea in the context of tax evasion: The court referenced previous judgments, including M/s. Hariom Floor & Oil Mill Vs. State of M.P. and Others, which emphasized the necessity of proving mens rea for imposing penalties under Section 57(8). The court found that the authorities failed to establish any dishonest intention or malafide conduct by the appellant. The non-production of Form No.49 was deemed a technical lapse without any fraudulent intent. Conclusion: The court concluded that the penalty imposed was unjustified as there was no intent to evade tax. The appellate Board erred in ignoring the explanation to Section 57(8). The impugned orders were set aside, and the authorities were directed to refund the penalty amount within 90 days. The appeal was allowed, emphasizing the importance of considering explanations and intent in tax-related penalties.
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