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TMI Blog2008 (11) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... .H. AND SUDERSHAN REDDY B. JJ. Puneet Jain, Sushil Kumar Jain, Ms. Archana Tiwari and Ms. Pratibha Jain, Advocates, for the respondent. Jatinder Kumar Bhatia, Advocate, for the appellant. -------------------------------------------------- The judgment of the court was delivered by S.H. KAPADIA J. This civil appeal filed by the Department is directed against the judgment and order dated August 1, 2007 passed by the Rajasthan High Court in S.B. Sales Tax Revision Petition No. 114 of 2005 setting aside the penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994. On March 30, 1999 a truck coming from Delhi was intercepted. The name of the consignor was M/s. Navyug Appliances (India), Mayapuri, Delhi. When the vehicle was stopped for checking at the check-post the driver was directed to produce bills, bilties, declaration form ST-18A for goods loaded in the vehicle. The statement of the driver was recorded. Show-cause notice was issued. In reply to the show-cause notice the representative of the respondent (importer) submitted that the duty of filling in the declaration form ST-18A was the responsibility of the transporter and the consignor and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid declaration form with the documents, a mistake had crept in. It was urged that there was no intention of evasion of tax. It was also argued that the cause of action in the present matter arose on March 30, 1999, i.e., prior to March 22, 2002 when section 78(5) stood substituted, hence penalty under the amended section 78(5) could not have been imposed against the owner of the goods. The Board came to the conclusion that the case arose prior to March 22, 2002 and consequently imposition of penalty against the owner was illegal. On that point alone the Board set aside the penalty and allowed the appeal filed by the assessee. The Board did not examine the merits of the case. Aggrieved by the decision of the Board, the Department preferred S.B. Sales Tax Revision Petition No. 114 of 2005 before the Rajasthan High Court which took the view that since the bill and bilty were found along with the goods at the time of checking and since the said declaration form was sent by the consignor to the transporter but on account of bona fide mistake of the transporter the same was left out, it could not be said that there was any intention to evade tax. Accordingly, the High Court confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the said goods form ST-18A was also found. That form was duly signed, however, it did not indicate the description of the goods transported. Therefore, the A.O. held that there was contravention of the provision of section 22A(3) of the Rajasthan Sales Tax Act, 1954 (for short, "the 1954 Act"). He accordingly issued show-cause notice to the appellant under section 22A(7) to show cause why penalty should not be imposed for violation of section 22A(3) of the 1954 Act. In that case also the consignee (importer) pleaded mistake in filling the declaration form. The consignee (importer) pleaded lack of knowledge of Hindi language. The A.O. rejected the explanation and imposed penalty under section 22A(7) of the 1954 Act. The consignee (importer) failed before the appellate authority. When the matter was pending in second appeal before the Rajasthan Tax Board, the said 1954 Act was replaced by the 1994 Act. The Tax Board held that the burden was on the Department to establish guilty mind (mens rea) on the part of the consignee. Accordingly, the appeal was allowed. Thereafter a revision petition was filed by the Department. By the impugned judgment, the High Court held that mens rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC). squarely applies to the present case: "9. Existence of mens rea is an essential ingredient of an offence. However, it is a rule of construction. If there is a conflict between the common law and the statute law, one has to construe a statute in conformity with the common law. However, if it is plain from the statue that it intends to alter the course of the common law, then that plain meaning should be accepted. Existence of mens rea is an essential ingredient in every offence; but that presumption is liable to be displaced either by the words of the statute creating the offence or by the subject-matter with which it deals. A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is different from the penalty for a crime. . . . 24(1). . . Form 18A, as quoted above, is in two parts. Part A has to be filled in by the consignee. Part B has to be filled in by the consignor. The nature of the transaction as to whether it is by consignment or by depot transfer or by inter-State sale has to be indicated by the consignee. Similarly, the consignee has to indicate the description of the goods. In the present case the consignee (ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We are concerned with the goods in movement being carried without supporting declaration forms. The object behind enactment of section 78(5) which gives no discretion to the competent authority in the matter of quantum of penalty fixed at 30 per cent of the estimated value is to provide to the State a remedy for the loss of revenue. The object behind enactment of section 78(5) is to emphasise loss of revenue and to provide a remedy for such loss. It is not the object of the said section to punish the offender for having committed an economic offence and to deter him from committing such offences. The penalty imposed under the said section 78(5) is a civil liability. Wilful consignment is not an essential ingredient for attracting the civil liability as in the case of prosecution. Section 78(2) is a mandatory provision. If the declaration form 18A/ 18C does not support the goods in movement because it is left blank then in that event section 78(5) provides for imposition of monetary penalty for non-compliance. Default or failure to comply with section 78(2) is the failure/default of statutory civil obligation and proceedings under section 78(5) are neither criminal nor quasi-cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is argument. Firstly, we are concerned with contravention of section 78(2) which requires goods in movement to travel with the declaration in form 18A/18C duly filled in. It is section 78(2)(a) which has been contravened in the present case by the assessees by carrying the goods with blank forms though signed by the consignee. In fact, the assessees resorted to the above modus operandi to hoodwink the competent officer at the check-post. As stated above, if the form is left incomplete and if the description of the goods is not given then it is impossible for the assessing officer to assess the taxable goods. Moreover, in the absence of value/price it is not possible for the A.O. to arrive at the taxable turnover as defined under section 2(42) of the said Act. Therefore, we have emphasized the words 'material particulars' in the present case. It is not open to the assessees to contend that in certain cases of inter-State transactions they were not liable in any event for being taxed under the RST Act 1994 and, therefore, penalty for contravention of section 78(2) cannot be imposed. As stated hereinabove, declaration has to be given in form 18A/18C even in respect of goods in movemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the quantum of penalty could not be waived or reduced. 33 See para 26 in 9 VST. In our view, the aforestated judgment in the case of D.P. Metals [2002] 1 SCC 279 [2001] 124 STC 611 (SC). has no application to the present case. We are not concerned in the present case with false or forged documents/ declaration. In the present case the goods in movement were carried with the blank declaration form 18A/18C which was duly signed by the assessee. Therefore, as stated above, we hold that the goods in movement were carried without declaration form 18A/18C. Therefore, section 78(2)(a) stood attracted. Moreover, in the present case, there were no special circumstances indicated by the assessee as to why the forms which were duly signed were not filled in. Therefore, in our view the above judgment in the case of D. P. Metals [2002] 1 SCC 279 has no application to the facts of the present case. As stated, we are concerned with the blank declaration form 18A/18C which has travelled with the goods in movement, though signed, was left deliberately blank. The declaration form 18A/18C is like a return under the Income-tax Act, 1961. The assessing officer completes the assessment on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it stood before March 22, 2008, inter alia, stated "the in-charge of the check-post or the officer empowered under sub-section (3), after having given the person in charge of the goods a reasonable opportunity of being heard and after having held such enquiry as he may deem fit, shall impose on him for possession or movement of goods a penalty at the stipulated rate". Therefore, according to the respondent herein, the subsequent amendment by Act No. 7 of 2002 had no application to this case. To answer the above contention, we need to quote the following provisions from the 1954 Act, the 1994 Act as it stood prior to March 22, 2008, the provisions of the 1994 Act after March 22, 2008, the Rules framed under the 1954 Act, the Rules framed under 1994 Act as also the Statement of Objects and Reasons for enacting Act No. 7 of 2002: "(a) Provisions contained in the 1954 Act: Section 22A. Establishment of check-post or barrier and inspection of goods while in transit. . . . (3) The owner or person in charge of a vehicle, boat or animal shall carry with him a goods vehicle record, a tripsheet or a log book, as the case may be, and such other document, as may be prescribed in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall be liable to a maximum penalty as mentioned in the preceding proviso and the vehicle, boat or animal carrying the goods may be kept, seized and detained for a period not exceeding 30 days after the date of the payment of the penalty or furnishing of the security: Provided also that where a transporter is found to be in collusion with a trader to avoid or evade tax during the course of movement of the goods through his vehicle, such vehicle may, after an opportunity of being heard has been afforded, be confiscated by the Commercial Taxes Officer of the area in whose jurisdiction the case was detected, with the prior approval in writing of the Deputy Commissioner (Administration) having jurisdiction and in case of confiscation of the vehicle, no penalty shall be imposed in the preceding first proviso. (b) Such officer may release any of the goods seized under sub- section (5) or sub-section (6) on payment of the penalty under clause (a) on furnishing such security in such form as may be prescribed for the payment thereof, as he may consider necessary. (c) such officer may, for sufficient reasons release any of the goods seized as aforesaid even before proceeding under clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him along with a declaration as prescribed in Part B of form ST-18AA duly verified and signed by the driver or any other person in charge of the vehicle, boat or animal or of the goods before the officer-in-charge of the entry check-post of the State, who shall retain the same. (b) Any person obtaining form ST-18 under clause (a) shall not in any manner transfer it to any other person for use under the said clause, or shall not authorize any other person for such use on his behalf. (c) If any form ST-18 obtained under clause (a) is lost, destroyed or stolen, the person concerned shall immediately report in writing in this behalf to the officer from whom such form was obtained. (d) The application to obtain form ST-18 under clause (a) shall be rejected if the Commercial Taxes Officer is satisfied that such form is not required for bona fide use under the said clause. (3) A registered dealer, (a) who imports any goods as notified by the State Government for sale, use in the manufacture or processing of goods for sale or in mining or generation or distribution of electricity or any other form of power or packing of goods for sale, or (b) who receives any goods consigned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such further time as the assessment authority may for sufficient cause, permit: Provided further that no declaration shall cover more than one transaction except where the total amount covered by one declaration does not exceed Rs. 2 lac for all the transaction in six months: Provided further that notwithstanding anything contained in sub-rule (1), if the Commissioner, on an application made by a dealer and after making such enquiry as he may consider necessary, is satisfied that the dealer is not in a position to furnish all or any of the declaration referred to in sub-rule (1) above, on account of loss of such declaration(s), due to fire, flood or riots beyond his conduct and it is not possible to obtain the duplicate declaration forms, he may, by an order in writing, exempt such dealer from furnishing such declaration(s), subject to the conditions that the application is made within 45 days of such event supported by the evidence of loss of such declaration form: Provided that an application under the preceding proviso may be made up to December 31, 1989 in relation to riots occurring in Makarana Circle in March 1989. (1a) A dealer who claims concession from payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n authorized by him in his behalf shall fill in all the required particulars in the form and shall also affix his usual signature in the space provided in the form for the purpose. Thereafter, the counterfoil of the form shall be retained by the purchasing dealer and the other two portions marked original and duplicate shall be made over by him to the selling dealer. (4) Any unused declaration form or forms remaining in stock with a registered dealer on the cancellation of his registration certificate shall be surrendered to the assessing authority. (5) No registered dealer to whom a declaration form is issued by the assessing authority shall either directly or through any other person transfer the same to any other person. (6) The State Government may, by notification, declare that forms of a particular series, design or colour shall be deemed as obsolete and invalid for use with effect from such date as may be specified in the notification. (7) A dealer who claims to have made such sales as are envisaged in sub-rule (1) or (1a) or (1b) to another dealer shall in respect of such claim, produce before the assessing authority the portion marked 'original' of the declaratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per use of such forms previously issued to him or that he actually requires such forms he may reject the application; (ii) the assessing authority is not satisfied that the applicant requires the forms in such numbers as he has applied for he may issue such forms in such lesser number as, in his opinion, could satisfy the reasonable requirements of the applicant; (b) If the applicant for declaration forms is, at the time of making the application, found to have failed to comply with an order demanding security from him under sub-section (7) of section 6, the assessing authority may reject the application; (c) If the applicant for declaration forms has at the time of making the application defaulted in payment of any outstanding demand or in paying tax according to sub-section (2A) of section 7 or in furnishing any return or returns together with the receipted challan or challans showing payment of the tax due from him according to such return or returns for the furnishing of which prescribed date or the extended date or dates, if any, have already expired, the assessing authority shall withhold the issue of declaration forms to him until such time as he: (i) deposits the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) shall be furnished separately, in respect of each form declared as lost, stolen or destroyed." (emphasis supplied) (b) Provisions contained in the 1994 Act: "Section 78. Establishment of check-post and inspection of goods while in movement. (2) The driver or the person in charge of a vehicle or carrier or of goods in movement shall, (a) carry with him a goods vehicle record including 'challans' and 'bilties', bills of sale or despatch memos and prescribed declaration forms; (b) stop the vehicle or carrier at every check-post set up under sub-section (1); (c) produce all the documents including prescribed declaration forms relating to the goods before the in-charge of the check-post; (d) give all the information in his possession relating to the goods; and (e) allow the inspection of the goods by the in-charge of the check-post or any other person authorised by such in-charge. Explanation I. For the purposes of this Chapter, (i) 'vehicle or carrier' shall include any means of transportation including an animal to carry goods from one point to another point; (ii) 'goods' shall include animals also; and (iii) 'goods in movement' shall means, (a) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to him from outside the State; or (iii) who intends to bring, import or otherwise receives any goods from outside the State, as may be notified by the State Government, of the value of Rs. 10,000 or more for use, consumption or disposal otherwise than by way of sale, shall furnish or cause to be furnished a declaration in form ST-18A, completely filled in all respect in ink. The counterfoil of the declaration shall be retained by such dealer and its portions marked 'original' and 'duplicate' shall be carried with the goods in movement and in case the goods are transported through railways, such portion shall be accompanied with the goods during their movement from railway premises to the place of business. (b) Any dealer or person other than a registered dealer, (i) who imports any taxable goods as may be notified by the State Government; or (ii) who receives any goods as may be notified by the State Government, consigned to him from outside the State, or (iii) who intends to bring, import or otherwise receives any goods from outside the State, as may be notified by the State Government, of the value of Rs. 10,000 or more for use, consumption or disposal within the Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso be furnished along with the duplicate portions of forms ST-18A to his assessing authority every quarter within thirty days from the close of the quarter. Explanation: Quarter means the period of three months ending on 30th June, 30th September, 31st December or 31st March. (3)(a) Any dealer, or the person other than registered dealer as mentioned in clause (b) of sub-rule (1), shall obtain the form ST- 18AA on payment of fee of Rs. 10 per form, from the assessing authority having jurisdiction over the area where his principal place of business is situated or in case there is no such place, where he ordinarily resides. (b) The form ST-18AA, issued under clause (a) shall be valid for twenty-one days from the date of issue of the declaration form. If the form cannot be made use of within the said period of twenty-one days, the form shall be returned to the issuing authority within thirty days, from the date of issue of declaration form. (c) Such dealer or person shall submit a statement of import of goods along with the duplicate portion of form ST-18AA, and in case original portion of form ST-18AA has not been retained by any officer mentioned in sub-rule (1), it shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uarter means the period of three months ending on 30th June, 30th September, 31st December and 31st March. (3) Where a dealer fails to furnish the statement as mentioned in sub-rule (2) above, the assessing authority after affording a reasonable opportunity of being heard, may impose penalty under section 68 of the Act. (4) The provisions of sub-rules (5), (6), (7), (8), (9), (10), (11), (12), (13), (14), (15), (16), (17), (18), (19) and (20) of rule 23 shall, in so far as may be, mutatis mutandis apply to declaration forms ST-18C. (5) Where form ST-18C is out of print or in short supply or otherwise not available in a zone, the Commissioner may issue such instructions as he deems proper in view of the circumstances of the case. (6) After the existing form ST-5B and before form ST-6, the following form ST 5C shall be inserted." (c) Statement of Objects and Reasons for enacting Act No. 7 of 2002: "A. Amendment in the Rajasthan Sales Tax Act, 1994. A dealer applying for provisional and voluntary registration is required to make payment of fee of Rs. 100. With the use of computers and other modern techniques and other cost factors, the registration fee fixed about half a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner in case an order passed by the subordinate authorities is erroneous as well as prejudicial to the interest of the Revenue. Both these conditions have to be satisfied for exercising these powers. Even in case of patently erroneous order passed by such authorities cannot be questioned except at the appellate forum, which may result in substantial delay in getting the grievances redressed. Therefore, by amending sub-section (1) of section 87 of the Act, it is proposed that the powers of revisions can be exercised on fulfilment of either of the above two conditions. As per present provisions of sub-section (2) of section 93 the Commissioner can ask for submission of specific information from dealers but not from other persons. For effective enforcement of the provisions of the Act, it is proposed to include words 'any person' in the aforesaid sub-section." (emphasis supplied) (d) Provisions of section 78(5) after its amendment by Act No. 7 of 2002: "Section 78. Establishment of check-post and inspection of goods while in movement. (5) The in-charge of the check-post or the officer empowered under sub-section (3), after having given the owner of the goods or a person aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mportation of any taxable goods for sale without furnishing a declaration in form ST- 18A completely filled in all respects. The duty to fill and furnish the said form is imposed on the purchasing dealer. Therefore, section 78(5) as it stood prior to March 22, 2002 imposed penalty if possession or movement of goods took place, inter alia, in breach of section 78(2)(a) on "the person in charge", which included the owner. In this connection it may be noted that sub-section (5) comes after sub-section (4)(c) which talks about release of the goods to "the owner of the goods" on his giving adequate security. It is the owner (importer) who has to fill in the form ST-18A. It is the owner who is entitled to seek release under section 78(4) on giving security. It is the owner who is entitled to a hearing under section 78(5) and, therefore, the expression "person in charge of the goods" under section 78(5) would include the owner. Moreover, under section 78(2) the words used are "person in charge of a vehicle or carrier of goods in movement" whereas the words in section 78(5) which comes after sub-section (4) refers to "person in charge of the goods". The words "in movement" do not find plac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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