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TMI Blog2011 (9) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... bon Limited v. Commissioner, Sales Tax [1985] UPTC'613 and the judgment of the Supreme Court in Civil Appeal No. 1548 of 1987, decided on December 5, 1996, Commissioner of Sales Tax v. Oriental Carbon Limited reported in [1997] 10 NTN 105 (SC). It is contended that the penalty is leviable under section 15A(l)(o) for contravention of section 28A of the Act only if it is established that there has been an intention to evade tax, as would follow from the language of section 28A(6). He submits that the High Court in the aforesaid judgments has held that merely because the required form XXXI accompanying the transaction was found to be completely blank, it by itself cannot be a ground to levy penalty under section 15A(l)(o) in absence of a finding that same had been done with the intention to evade the tax. For the purpose he has also placed reliance upon the findings which have been recorded in the assessment order. Standing counsel in reply submits that from a simple reading of section 15A(l)(o) it is apparently clear that penalty is attracted on violation of the provision of section 28A. Therefore, if there is violation of the provisions of any of the sub-section of section 28A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner, Commercial Tax [2009] 39 NTN 263 and upon the judgment of the honourable Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa [1970] 26 STC 302 (SC); [1972] 83 ITR 26 (SC); [1969] 2 SCC 627 and Bharjatiya Steel Industries v. Commissioner, Sales Tax, U. P. [2008] 13 VST 514 (SC); [2008] UPTC 338 and lastly upon the judgment in the case of Commissioner of Sales Tax v. Sanjiv Fabrics [2010] 35 VST 1 (SC); [2010] UPTC 1293. I have heard learned counsel for the parties and have gone through the records of the writ petition. In order to appreciate the contentions raised on behalf of the parties it would be worthwhile to reproduce section 15A(l)(o) and the Note at the end of the various sub-clauses, which read as follows: "15A. Penalties in certain cases.- (1) If the assessing authority is satisfied that any dealer or other person,:- . . . (o) imports or transports, or attempts to import or transport, abets the import or transport of any goods in contravention of the provisions of section 28A; Note: It may, after such inquiry, if any, as it may deem necessary, direct that such dealer or person shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by proper and genuine documents referred to in the preceding sub-section and for reasons to be recorded he is satisfied after giving such person an opportunity of being heard that such goods were being so transported in an attempt to evade assessment or payment of tax due or likely to be due under this Act, he may order detention of such goods." In the opinion of the court from a simple reading of section 15A(l)(o) it is apparently clear that penalty is attracted on violation of any of the provisions of section 28A. Section 28A(1) permits the import of goods within the State, while section 28A(2)(a) provides that such import of goods must be accompanied by forms/declarations, as statutorily prescribed in such number as mentioned therein. Section 28A(2)(b) requires the deposit of documents at the check-post with the officer-in-charge, while section 2(5) mandates that the required documents accompanying the transaction should be available with the driver of the vehicle for being produced as and when it is intercepted by the competent officer, including the name of the consignor and the consignee of the goods. In the opinion of the court, if there is violation of the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration for the purposes of quantification of the penalty to be levied. The said judgment is complete answer to the contentions, which have been raised on behalf of the assessee. What follows therefrom is that mens rea is not a condition sine qua non for levy of penalty, it is only a relevant factor to be considered at the time of exercise of discretion at the time of quantification. This court may also refer to the judgment of the Supreme Court in the case of Guljag Industries v. Commercial Taxes Officer [2007] 9 VST 1 (SC); [2007] 293 ITR 584 (SC); [2007] 7 SCC 269. The apex court has dearly explained the impact of mens rea and the extent it is applicable in the matter of levy of penalty, which is only a civil obligation, remedial and coercive in nature, and is different from the penalty for a crime. For ready reference paragraph 8 in SCC; paragraph 9 in VST of the judgment is being quoted below (page 7 in 9 VST): "8. 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. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f mens rea becomes a relevant factor. In given set of fact it is open to the authority concerned to come to a conclusion that zero penalty be levied, as there has been no evasion of tax. This exercise of discretion cannot lead to a conclusion that the authority does not have the jurisdiction to levy the penalty, if there is no mens rea, i. e., only for statutory violations. The jurisdiction to levy the penalty and quantification of the penalty in the given facts of the case are entirely two different aspect of the matter. What is being asked by the counsel for the assessee is that the discretion to be exercised in the matter of quantification may be read as condition precedent for exercise of power to levy the penalty itself. This court cannot accept the proposition raised on behalf of the counsel for the petitioner. Penalty under the provisions of section 15A(l)(o) can be levied for violation of any of the clauses of section 28A. It is also worth mentioning that under various sub-clauses of section 15A(1) itself penalty has been provided for violation of statutory provisions where mens rea has no role to play, namely, section 15A(1), sub-clauses (a), (e), (k), (n) and (r). Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner, the Division Bench has held that for the seizure of the goods it is a condition precedent to make out a case that there was an attempt to evade the tax. This has to be examined with reference to the power of detention of goods and levy of penalty thereafter. The issue as to whether the penalty could be levied on technical violation of section 28A(2) and 28A(5) had not been examined. The other judgment of the honourable single Judge, which has been followed by the Division Bench in the case of Jain Sudh Vanaspati Ltd. [1983] 53 STC 54 (All); [1983] UPTC 198, for holding that no penalty under section 15A(l)(o) can be levied for violation of section 28A unless mens rea of avoiding the tax is established, in the opinion of the court did not take into consideration the scope of section 15A(1)(o) which provides for levy of penalty on violation of the statutory provisions only in addition to the penalty, which may be levied on seizure of goods under section 28A(6). In any view of the matter the legal position stands settled under the judgments of the Supreme Court in the case of Bharjatiya Steel Industries [2008] 13 VST 514 (SC); [2008] UPTC 338 and Guljag Industries [2007] ..... X X X X Extracts X X X X X X X X Extracts X X X X
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