2023 (12) TMI 778 - HC - VAT and Sales Tax

Levy of penalty u/s 60(4) of Bihar Value Added Tax Act, 2005 - presence of mens rea or not - invoice number not tallied - human/clerical error - detention of a truck carrying goods at the integrated checkpost, Dhobi, Gaya - HELD THAT - In the present case, there was a mistake in the invoice number as indicated in the declaration form which was accompanying the transport. A reasonable ground of attempt to carry out multiple transport arise, since if there was no checking at the check-post then there could have been a further transport made under the same invoice, thus, enabling an inter-State sale of the goods transported by the subject invoice and SUVIDHA Form, which could go unnoticed by the Department. Section 60(4) enables a seizure of goods along with the carrier if the authority suspects the transport to be in contravention of the provisions of Section 60(2). Section 60(4) (b) makes Section 56 applicable mutatis mutandis. Penalty is imposable under Section 56(4) (b) if the person in charge of the goods fails to satisfy the officer regarding the proper accounting of goods. The ingredients of Section 60(4) (b) read with Section 56(4) (b) are available in the instant case. There are absolutely no reason to interfere with the penalty imposed - petition dismissed.

Summary

Issues Involved:
1. Validity of the penalty order under Section 60(4)(b) read with Section 56(4)(b) of the Bihar Value Added Tax Act, 2005.
2. Requirement of mens rea for the imposition of penalty.
3. Relevance of the Supreme Court decisions in Guljag Industries v. Commercial Taxes Officer and State of Rajasthan v. D.P. Metals.

Summary:

1. Validity of the penalty order under Section 60(4)(b) read with Section 56(4)(b) of the Bihar Value Added Tax Act, 2005:
The petitioner, engaged in the manufacture and sale of tyres, tubes, and flaps, challenged a penalty order issued after the detention of a truck carrying goods at an integrated check-post. The truck driver presented documents including an invoice and a SUVIDHA Outgoing Form, which had a clerical error in the invoice number. Despite the error, the detaining authority imposed the maximum penalty under Section 60(4) of the Act. The petitioner argued that the mistake was human error and did not indicate an intent to evade tax.

2. Requirement of mens rea for the imposition of penalty:
The petitioner contended that there was no mens rea as all details except the invoice number matched. The Government Advocate argued that the penalty for misdemeanor under the Act does not necessarily require mens rea. The Supreme Court's decision in Guljag Industries was cited, emphasizing that penalties under Section 78(2) of the Rajasthan Sales Tax Act do not require mens rea and are civil liabilities. The Court held that even if goods are exempt from taxation, the absence of proper documentation can attract penalties.

3. Relevance of the Supreme Court decisions in Guljag Industries v. Commercial Taxes Officer and State of Rajasthan v. D.P. Metals:
The Court referred to Guljag Industries, where it was held that penalties can be imposed without presumption of mens rea if goods are transported without proper documentation. The decision in D.P. Metals was distinguished, noting that it dealt with the absence of declaration forms rather than incomplete ones. The Court concluded that the facts of the present case aligned more with Guljag Industries, where the presence of an incomplete form indicated a potential attempt to evade tax.

Conclusion:
The Court found that the documents presented by the petitioner did not prove the genuineness of the transport. The subsequent generation of the correct invoice after detention suggested an attempt to rectify the mistake post facto. The Court upheld the penalty, stating that the ingredients of Section 60(4)(b) read with Section 56(4)(b) were met, and dismissed the writ petition.