2016 (9) TMI 1085 - HC - VAT and Sales Tax

Imposition of penalty @ 30% equivalent to the value of the goods under section 22-A(7) of the Rajasthan Sales Tax Act, 1954 - declaration in form ST-18-A - Sun Flower Oil carried from Shahbad to Jaipur - Held that - section 22-A(7) of the Rajasthan Sales Tax Act Act, 1954 mandates that declaration form is required to be carried on by the vehicle in addition to the other documents. The decision in the case Assistant Commercial Taxes Officer Versus. Indian Oil Corporation Ltd 2015 (11) TMI 1078 - RAJASTHAN HIGH COURT is relied upon. No question of law found to be involved - a finding of fact based on documents on record - imposition of penalty upheld - petition dismissed - decided against appellant.

Summary

Issues Involved:
1. Imposition of Penalty under Section 22-A(7) of the Rajasthan Sales Tax Act.
2. Validity of Show Cause Notice.
3. Applicability of Natural Justice Principles.
4. Requirement of Mens Rea for Penalty Imposition.
5. Relevance of Supporting Documents.

Detailed Analysis:

1. Imposition of Penalty under Section 22-A(7) of the Rajasthan Sales Tax Act:
The primary issue in this case was whether the penalty imposed under Section 22-A(7) of the Rajasthan Sales Tax Act was justified. The vehicle in question was intercepted without the declaration form ST-18-A, which is mandatory under the Act. The Assessing Officer (AO) imposed a penalty of 30% equivalent to the value of the goods. The Tax Board upheld this penalty, referencing the judgment in *Guljag Industries Vs. Commercial Taxes Officer* which emphasized the strict civil liability for non-compliance with statutory obligations.

2. Validity of Show Cause Notice:
The assessee contended that no proper show cause notice was issued to them, as the notice was addressed to the driver and not the assessee. However, the court found that the representative of the assessee had appeared, provided a security bond, and filed a reply to the show cause notice, indicating awareness of the proceedings. Thus, the service on the driver was deemed proper in the context of the case.

3. Applicability of Natural Justice Principles:
The assessee argued that the penalty was imposed in violation of the principles of natural justice as no show cause notice was served on them. The court, however, noted that the assessee had actively participated in the proceedings by filing a security bond and a detailed reply. Therefore, the principles of natural justice were not violated.

4. Requirement of Mens Rea for Penalty Imposition:
The court referred to the Supreme Court’s judgment in *Guljag Industries Vs. Commercial Taxes Officer*, which clarified that mens rea is not an essential element for imposing a penalty under Section 78(5) of the RST Act, which is pari-materia to Section 22-A(7) of the RST Act, 1954. The penalty is a civil liability for non-compliance with statutory obligations, and the intention behind the contravention is irrelevant.

5. Relevance of Supporting Documents:
The assessee contended that all necessary supporting documents were present with the vehicle, and the absence of the declaration form ST-18-A should not result in a penalty. The court, however, held that the mandatory requirement of carrying the declaration form ST-18-A cannot be substituted by other documents. The presence of other supporting documents does not mitigate the statutory obligation to carry the specific declaration form.

Conclusion:
The court dismissed the petition, upholding the penalty imposed by the AO and sustained by the Tax Board. The court found no illegality, infirmity, or perversity in the impugned order and emphasized that the controversy was no longer res-integra, being covered by the judgment in *Guljag Industries Vs. Commercial Taxes Officer*. The petition was devoid of merits and thus dismissed.