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TMI Blog2007 (11) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... not produce the transit declaration and/or any other required document at the said exit check-post for the purpose of endorsement. The vehicle with the disputed goods entered Orissa through Jamsala check-post after getting Orissa way-bill and other required documents endorsed by the check-post authorities at the Jamsala check-post. As the Chichira check-post did not have any record that the disputed goods were taken out of West Bengal, the Assistant Commissioner, Commercial Taxes, Kharagpur Range, issued a notice in form-44A on February 25, 2003 asking the petitioner to appear and show cause why penalty should not be imposed on it for contravention of the provisions of sub-section (4) of section 70 and section 68 of the West Bengal Sales Tax Act, 1994. In response to the said notice the petitioner's authorised representative appeared before the Assistant Commissioner, produced documents, viz., endorsed way-bill at the Jamsala check-post in Orissa, certificate dated March 29, 2007 issued by the Superintendent, Central Excise, Customs and Service Tax, Balasore II Range, certifying that the disputed goods were received in the factory of Birla Tyres at Balasore and entered in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is point and relied upon a decision of the Supreme Court in R.S. Joshi, Sales Tax Officer, Gujarat v. Ajit Mills Limited reported in [1977] 40 STC 497. Section 68 of the 1994 Act is the parent section which spells out the purpose or object of imposing restrictions on movement of goods. Various restrictions have been imposed on movement of goods to ensure that there is no evasion of tax (emphasis Here italicised. supplied). All the procedural requirements prescribed under authority of section 68 are designed to serve the main purpose, i.e., safeguard against possible evasion of or attempt to evade tax. Various powers as conferred under sections 69-72 of the 1994 Act have been so conferred for the purpose of achieving the object contained in section 68, i.e., to ensure that there is no evasion of tax . Power of seizure is derived from section 70. Goods can be seized under section 70 if those goods are transported in contravention of the provisions of section 68 or section 63. Section 72, sub-section (6) has conferred power to impose penalty in case of transportation of goods through West Bengal upon satisfaction that the provisions of section 73 have been contravened. As alrea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erala [1989] 177 ITR 455 (SC); AIR 1989 SC 1671, Director of Enforcement v. M.C.T.M. Corporation Pvt. Ltd. AIR 1996 SC 1100). It appears to be settled that if the penalty is in the nature of a civil liability for non-compliance with a statutory requirement or non-performance of a statutory obligation, mens rea or ill-motive need not always be present. In a recent decision in Guljag Industries v. Commercial Taxes Officer reported in [2007] 9 VST 1, the Supreme Court has reiterated that in case of failure to comply with mandatory statutory obligation there is no question of proving intention or mens rea. In the said case imposition of penalty under the provisions of the Rajasthan Sales Tax Act was upheld as the defaulting dealers could not prove any kind of special circumstance justifying production of blank declarations. The Supreme Court was of the view that the declarations were kept blank so that they could use it for any consignment as and when required. Even in Guljag Industries [2007] 9 VST 1, the Supreme Court considered the possible effect of the infringement. A three-judge Bench of the Supreme Court in Hindustan Steel Ltd. v. State of Orissa reported in [1970] 25 STC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t page 544 of 291 ITR) . . . Imposition of penalty is not automatic. Levy of penalty is not only discretionary in nature but such discretion is required to be exercised on the part of the assessing officer keeping the relevant factors in mind . . . The approach of the assessing officer in this behalf must be fair and objective. It appears to us that in this kind of proceeding for imposition of penalty presence of mens rea may not be necessary but that does not mean that mere infringement however technical or unintentional it may be will automatically lead to penalty. If such was the intention of the Legislature, there would not have been any provision for separate post-seizure penalty proceeding requiring to give opportunity of hearing and to pass a reasoned order. In this kind of adjudicatory process to determine civil liability reasons, if any, for the infringement and possible consequence of the violation or infringement are to be carefully examined. Once infringement is established onus shifts on the defaulter to explain and prove bona fide reasons for the infringement and that the infringement did not create any opportunity or possibility of evading tax. If penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be held responsible for the infringement after it cleared the goods and handed over the goods to the transporter for carriage. Tribunal negatived the said contention and held that the applicant therein could not escape his liability and responsibility as it made the declaration under rule 211A(1). Similar question was raised before another Bench of the Tribunal in Gee Pee International and same view was expressed. The Tribunal in the said case upheld imposition of penalty even though it accepted that the endorsed declarations were lost in transit and the goods were actually delivered at Mumbai. The aforementioned Bench did not lay down any law therein and the case was decided on the facts of the said case. In the present case materials on record prove beyond any iota of doubt that imported rubber-chemicals crossed West Bengal and entered Orissa on the very date of commencement of journey. Even a disinterested statutory authority like Superintendent of Central Excise, Customs and Service Tax has certified receipt of the disputed consignment in the factory at Balasore on August 31, 2002. If the petitioner could not have proved that the disputed consignment went out of West Bengal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner is a relevant consideration for interference by this Tribunal. Even when this Tribunal desires to interfere it may impose conditions to secure better conduct of the petitioner in future. There is no doubt that the petitioner and its principal, Birla Tyres, were responsible for the penalty proceeding. The sales tax authorities rightly initiated the proceeding when it was found that transit declaration was not produced at the declared exit check-post and no intimation about exit of the disputed consignment was sent to them. The petitioner or Birla Tyres did not even take care to retain or preserve the unused transit declaration and could not produce the said declaration at the time of hearing of the penalty proceeding. The petitioner's conduct is also blameworthy although it did not result in any possibility of loss of revenue or actual loss of revenue. For the reasons aforesaid we exercise our discretion and set aside the impugned order of penalty subject to the condition that the petitioner will pay a sum of Rs. 30,000 to the Commissioner of Commercial Taxes as a measure of deterrence. The petitioner will deposit said sum of Rs. 30,000 by December 31, 2007 in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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