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TMI Blog2014 (5) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... xpression "falsely represents" clearly shows that the element of mens rea is the necessary component of the offence - In the absence of mens rea, resort to penal provision would not be proper unless it is established that the conduct of the dealer was contumacious or that there was deliberate violation of the statutory provision or wilful disregard thereof - If the registered dealer honestly believes that any particular goods are embraced by the Certificate of Registration and on that belief makes a representation, he cannot be held guilty of the offence under Section 10(b) of the Act and no penalty can be imposed under Section 10-A of the Act - The question whether the assessee acted under the honest belief is a question of fact - Thus, "m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee is on revision as against the order of the Sales Tax Appellate Tribunal dated 29.04.2009 passed in T.A.No.117 of 2008 relating to the assessment year 2002-2003 raising the following questions of law: 1. Whether the Hon'ble Tribunal erroneously decided the question of law before it when it proceeded on the basis that the mere absence of a reference to a commodity in the Form-B registration certificate will by itself show a false representation within the meaning of Section 10(b) of the CST Act, 1956? 2. Whether the expression machine found in the Form B registration certificate of the petitioner satisfied the expression any class of goods found in Section 10(b) of the CST Act? 3. Whether the omission of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being in the first year of preparation in 2002-03, they had no qualified person to advise them on this. In the circumstances, they prayed for dropping of the levy of penalty. After considering the objections, the Assessing Officer, however, rejected the claim of the applicant holding that the assessee had falsely represented that the goods purchased were covered by the Certificate of Registration entitled to concession of levy by use of Form C . 3. Aggrieved by this, the assessee went on appeal. The Appellate Assistant Commissioner, who once again confirmed the view of the Assessing Officer, pointed out that if the claim of the assessee that generators and air conditioner fall under the category of machines was correct, then, they would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal, held that the diesel generator set could not be held to be a machinery. Thus going by the facts available, the Sales Tax Appellate Tribunal, confirmed the view of the Authorities below. 6. Aggrieved by this, the present revision has been preferred by the assessee. 7. Learned counsel for the assessee submitted that since the generator set purchased by the assessee is also a machinery, under the bona fide impression that the certificate of registration included such diesel generator set, the assessee purchased the same as against C form declaration. Thus there was no mensrea or false representation to be imputed on the conduct of the assessee. Consequently, the order of the Sales Tax Appellate Tribunal, has to be set aside. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he question whether the assessee acted under the honest belief is a question of fact. Therefore, in our view, mens rea is an essential ingredient for the levy of penalty under Section 10(b) of the Central Sales Tax Act, 1956. Thus applying the said decision, in the unreported decision in T.C. No.2151 of 2008 [cited supra], this Court pointed out that in dealing with the question of levy of penalty, particularly as regards Section 10(b) of the Central Sales Tax Act,1956 is concerned, one has to necessarily keep in mind the nature of the business of the assessee. 10. Thus holding, this Court pointed out that the registration certificate of the assessee therein included yarn cloth, knitting sewing textile machines, dyeing winch, boile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould justify the purchase of diesel generator sets as forming part of the machinery to be used in the manufacture. Admittedly, the purchase of the generator set was only a standby to supply electricity whenever there was power failure. The assessee pointed out, in its reply that they were in the first year of business and they had commenced operations in India for the first time in the year 2002 and they had no previous knowledge of tax laws in India and there were none in their pay rolls to advise them on tax matters and they placed reliance on purchase department in-charge, who was an engineering graduate, hence, their bona fides could not be doubted. 13. Taking note of the same, this Court feels that as against the penalty levied at 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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