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TMI Blog2009 (6) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee filed exhibit P3, the first revision petition before the second respondent who dismissed the same by exhibit P4 order confirming exhibit P2. Again challenging exhibit P4 order, the petitioner preferred exhibit P5, the second revision petition, before the third respondent which was also dismissed as per exhibit P6 order confirming exhibits P2 and P4 orders. Therefore the petitioner-assessee approached this court preferring the above writ petition. The main ground raised in this writ petition and during the course of hearing is that none of the authorities came into a conclusion that the petitioner-assessee has got mens rea to evade from paying tax in spite of the fact that such a contention raised before all the statutory authorities. According to the petitioner, dried chilies were sold for converting the same into oily resins for export and he was under the presumption that chilies when converted into oily resins still remained as chilies and he is entitled for the exemption. It is the further case that, based upon such presumption, the authorities were also prayed for exemption. It is also argued that the only case pointed out by the authorities in order to invoke secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis for the return submitted by the assessee. According to the learned Government Pleader, the above fact itself is sufficient to hold that the assessee has deliberately maintained the said register without incorporating the real transaction and based upon such sales register, he preferred the return. Therefore, according to the learned Government Pleader, the orders issued by the first respondent imposing penalty against the assessee is perfectly legal and valid and consequently, exhibits P4 and P6 orders are also legally valid and not liable to be interfered with. I have carefully considered the contentions raised by the learned counsel for the petitioner as well as the learned Government Pleader and also perused the materials on record. On a perusal of exhibit P2, it can be seen that, after considering exhibit P1 objection, the first respondent himself had decided to drop the proceedings with respect to invoices Nos. 6, 21 and 87. In exhibit P2, the first respondent has specifically found after verification of the records that the bills/invoices raised have no continuity. They were not seen issued from a serial set kept. According to the first respondent, certain invoices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , according to the counsel, though the legal question was raised, the same was not considered by any of the statutory authorities. I have gone through the decision cited by the learned counsel. On a reading of section 45A of the Act, it can be seen that penalty can be imposed by the officers and authorities on his satisfaction of any of the grounds enumerated therein. The apex court, in a recent decision reported in Assistant Commercial Taxes Officer v. Bajaj Electricals Ltd. [2008] 18 VST 436; [2009] 17 KTR 120 has held in para 8 (at page 442 of VST): "8. For the sake of convenience we reproduce the important paragraphs from the judgment of this court in the case of Guljag Industries [2007] 9 VST 1 (SC); [2007] 7 SCC 269 as in our view the judgment in Guljag Industries v. Commercial Taxes Officer [2007] 9 VST 1 (SC); [2007] 7 SCC 269 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 statute that it intends to alter the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form to be submitted duly filled in and duly completed. In the present case, the goods in movement were not supported by duly filled in form No. 18A/18C. Therefore, there was contravention of section 78(2) of the RST Act, 1994. 25 See para 22 in 9 VST.. There is dichotomy between contravention of section 78(2) of the said Act which invites strict civil liability on the assessee and the evasion of tax. When a statement of import/export is not filed before the A.O., it results in evasion of tax. However, when the goods in movement are carried without declaration form No. 18A/18C then strict liability comes in, in the form of section 78(5) of the said Act. Breach of section 78(2) imposes strict liability under section 78(5) because as stated above goods in movement cannot be carried without form No. 18A/18C. We are not concerned with non-filing of statements before the A.O. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods. He knows the descriptions of the goods which he is supposed to buy. There is no reason for leaving that column blank. Therefore, there are no special circumstances in any case for waiver of penalty for contravention of section 78(2). The assessees were fully aware that the goods in movement had to be supported by form ST 18A/18C. Therefore, they made the goods travelled with the forms. However, the said forms are left blank in all material respects. Therefore, A.O. was right in drawing inference of mens rea against the assessees. It has been repeatedly argued before us that apart from the declaration forms the assessees possessed documentary evidence like invoice, books of account, etc., to support the movement of goods and, therefore, it was open to the assessees to show to the competent authority that there was no intention to evade the tax. We find no merit in this 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 form though signed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if false or forged documents/declaration was submitted then penalty under section 78(5) was leviable. After analysing the said section, this court held that in the case of submission of false or forged documents/ declaration, the authority was entitled to presume the motive to mislead the authorities. However, in such cases that presumption was rebuttable by the assessee on producing the requisite documents referred to in section 78(2)(a). That, once the ingredient of section 78(5) stood established after giving a hearing, there was no discretion with the officer to reduce the amount of penalty or to waive the penalty. If by mistake some of the documents were not readily available at the time of checking, principles of natural justice might require opportunity being given to produce the same. It was further held that under section 78(5) the Legislature has fixed the rate of penalty and, therefore, 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 [2001] 124 STC 611 (SC); [2002] 1 SCC 279; JT 2001 (8) SC 328 has no application to the present case. We are not concerned in the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted the return on the basis of the endorsement he made in the sales register which did not reflect the actual transaction, viz., the sales. It is also a fact that the return submitted by the assessee was also not on the basis of the transaction that contained in the personal account maintained by him. The above facts and materials are sufficient to hold that the assessee had mens rea to evade tax. The third respondent in exhibit P6 order, has found as follows: "It was therefore, evident from these circumstances that there was clear failure on the part of the petitioner to maintain true and complete account of his business transactions which resulted in evasion of tax due to Government. The findings of the authorities below are based on materials and are not perverse as characterised by the petitioner. The orders of the authorities below show that they have fully gone into the question of suppression and of not keeping true and proper account. There is mens rea embedded in this case which attracted levy of penalty under section 45A of the KGST Act and hence the authorities below were justified in proceedings under section 45A of the KGST Act." Therefore according to the thir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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