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TMI Blog2009 (6) TMI 973X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture and supply of piping and valve skid along with loose piping and spare parts of 12 polybed 5 Polybed PSA Unit of Hydrogen generation plant under the MS/HSD quality improvement and residue up-gradation project of Gujarat Refinery, Vadodra (Gujarat), which is a unit of Indian Oil Corporation Limited. The Indian Oil Corporation Limited, New Delhi, which is a Government of India Undertaking, placed an order dated 14.12.2007 for its Refinery at Gujarat for the aforesaid project on UOP is associated. Since the Indian Oil Corporation Ltd. has placed the purchase order on UOP for its Refinery at Vadodra (Gujarat) i.e. Gujarat Refinery; hence UOP in turn has placed two purchase orders on the applicant for manufacture and supply of piping valve skid. For completing the aforesaid order for manufacture and supply of piping and valve skid, some automatic valves which were imported from outside the country by Gujarat Refinery were to be given to the applicant as free issue material for the manufacture of valve skid for the aforesaid unit of Gujarat Refinery. The cost of this material, namely, automatic valves etc. imported from outside the country by Gujarat Refinery was not included ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The applicant filed an application under Section 48(7) of the Act before the Joint Commissioner (SIB), Gautam Budh Nagar. The Joint Commissioner (SIB) vide order dated 29.4.2009 has upheld the seizure of the goods but has reduced the amount of security to ₹ 11,12,000/-. 4. Being aggrieved by the order, the applicant filed appeal before the Tribunal. The Tribunal by the impugned order dismissed the appeal. The Tribunal has confirmed the seizure of the goods on the ground that in Form 38, column No. 6 was not filled. The bill, challan number, etc. were not mentioned in the Form which shows intention to evade the tax as the said Form could be used again for the import of the same quantity, weight and value of the goods. The Tribunal has upheld the seizure of the goods and demand of security following the decision of this Court in the case of M/s KMGS Road Signs Pvt. Ltd., New Delhi vs. Commissioner of Commercial Taxes, U.P., Lucknow, reported in 2009 NTN (Vol. 39) 263. The decision of the Apex Court in the case of Guljag Industries vs. CTO, reported in 2007 NTN (Vol. 35) 61 (SC);(2007) 7 SCC-269 and the decision of the Apex Court in the case of Assistant Commercial Tax Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en filled, it amounts that the declaration Form was not properly filled and the goods were not being imported against the declaration Form. In the absence of properly filled Form, the Apex Court in the case of Guljag Industries vs. CTO (Supra) and in the case of Assistant Commercial Tax Officer vs. Bajaj Electricals Limited (Supra) has held that goods sought to be imported against the Form not properly filled amounts to import of goods without declaration Form. The Apex Court further held that in these circumstances, the presumption is that the import of goods are with intent to evade the tax and the goods are liable to be seized and liable for penal action. Relying upon the aforesaid decision the learned Single Judgment of this Court in the case of M/s KMGS Road Signs Pvt. Ltd., New Delhi vs. Commissioner Commercial Taxes, U.P., Lucknow (supra) held that in case if the columns are not filled are not filled properly, the goods are liable to be seized. 8. Learned Standing Counsel further submitted that the circular relied upon by the learned Counsel for the applicant is not applicable to the present case. He submitted that the circular says that in case if either of the column no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary by the officer-in-charge of the check-post or barrier or the officer authorized under sub-section (1) of Section 45 or sub-section (1) of Section 48, as the case may be, and allow him to search the vehicle and inspect the goods and all documents referred to in the preceding sub-section and shall, if so required, give his name and address and the names and addresses of the owner of the vehicle and of the consignor and the consignee of the goods. (4) Where the officer making the search of inspection under this section finds any person transporting or attempting or abetting to transport any goods to which this section, applies without being covered by the proper and genuine documents referred to in the preceding sub-sections and if, 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, (emphasis provided). (5) The provisions of sub-sections (3), (7), (8), (9) and (10) of Section 48 shall mutatis mutandis apply to goods detained under sub-section (6), as they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r certificate, as the case may be. (6) The trip sheet referred to in sub-rule (3) shall be in Form XL and shall contain details in respect of all goods referred to in clauses (a) and (b) of sub-rule (3) being carried by a vehicle or vessel. Separate trip sheets shall be submitted for goods meant for different destinations. (7) The Commissioner may from time to time issue instructions with regard to the procedure to be followed regarding import of goods from out of State and submission of declaration or certificate before Assessing Authority. 11. Section 54(14) of the Act which provides levy of penalty reads as follows: Section 54(14). Penalties in certain cases. (1) (2) (3) 14. Where the dealer or any other person, 40% of disclosed as the case may be: value of goods (i) imports or attempts to import or abets the import of any goods, in contravention of the provisions under Section 50 or Section 51 with a view to intention of evading payment of tax on sale of - (a) such goods; or (b) goods manufactured, processed or packed by using such goods; or (ii) transports, attempts to transport any taxable goods in contravention of any provisions of this Act; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vides that if the officer is not satisfied with the explanation, he shall order the seizure of the goods. Thus, in brief, the aforesaid provisions show that the person who intends to import the goods in connection with the business any goods other than goods named and described in Schedule-I should carry the declaration form should carry declaration form, cash memo, invoices or challan and shall produce the same to the officer concerned at the time of inspection. Such documents should be proper and genuine documents. The declaration form should be duly filled and signed by the purchaser and seller of the goods. In case of any discrepancy being found, the officer concerned shall issue a show cause notice and under Section 50(4) for the reason to be recorded after giving an opportunity of being heard, for the reason to be recorded after giving an opportunity of being heard, for the reason to be recorded that such goods were being so transported in an attempt to evade the assessment or payment of tax due are likely to be due under this Act, he may order detention of such goods. Section 54(14) of the Act provides for levy of penalty for the contravention of provisions of Section 50 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to bring, import or otherwise receive, into State from any place without the State, any goods other than the goods exempt under Clause (a) of Section 4 in such quantity or measure or of such value as exceeds, (a) (i) twenty kilograms in the case of foodgrains, cereals, pulses, soyabean, and all products thereof, and all raw materials including resin, rosin and oil seeds used for extracting oils of any kind; and (ii) rupees fifty, in the case of other goods; or (b) the quantity, measure or value notified by the State Government in that behalf, in connection with business, shall obtain the prescribed form of declaration on payment of the prescribed fee 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: Provided that where the importer intends to bring, import or otherwise receive such goods otherwise than in connection with business, he may, at his option, in the like manner obtain the prescribed form of certificate. Section 28-A (6) Where the officer making the search or inspection under this Section finds any person transporting or attempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies either to seize the said goods or to penalize the improper thereof on any such assumption. Its present basis is the attempt to evade tax. The power to detain the goods and levy penalty in respect thereof cannot be exercised merely for the reason that the said goods were not accompanied by the requisite documents or that the documents accompanying them were false. This power can be exercised only if the goods detained are not accompanied by the requisite documents or that the documents accompanying them are false and if there is material before the detaining authority to indicate that the goods are being imported in an attempt to evade assessment or payment of tax due or likely to be due under the Act. The instant case, therefore, in our opinion, clearly falls outside the ratio of the case of Check-post Officer vs. K.P. Abdulla Bros., 27 STC 1 as decided by the supreme Court. Para 27 . These provisions make it absolutely clear that the power to seize and detain the goods under sub-section (6) of Section 28-A cannot be exercised merely because the goods, when they reach the check-post, were not accompanied by the declaration form contemplated by Section 28-A(1). The real o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between contravention of Section 78(2) of the said Act which invites strict liability on the assessed 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 the 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 concerned with the goods in movement being carried without supporting declaration forms. The object behind enactment of Section 78(5) is to emphasis 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. Willful 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 mov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat apart from the declaration forms the assessees possessed documentary evidence like invoice, books of accounts 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 the 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 restored 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds shall be governed by the law discussed hereinabove by us. For the aforestated reasons, we hold that Section 78(5) of the RST Act, 1994 (Section 22A (7) of the RST Act, 1954) is the section enacted to provide remedy for loss of revenue and it is not enacted to punish the offender for committing economic offence and, therefore, mens rea is not an essential ingredient for contravention of Section 78(2) of the RST Act, 1994. That, the breach of Section 78(2) would attract the levy of penalty under Section 78(5) in cases where the goods in movement have traveled with an incomplete Form No. 18A/18C. We accordingly uphold the judgment of the High Court of Rajasthan in Sales Tax Revision No. 1023/2002 dated 14.10.03 (which is annexed as page No. 1 of the appeal paper book in Civil Appeal No. 5197 of 2005 filed by M/s Guljag Industries vs. Commercial Taxes Officer). 18. In the case of Assistant Commercial Tax Officer vs. Bajaj Electricals Limited (Supra), the Apex Court following its earlier decision in the case of Guljag Industries vs. CTO (Supra) held that in case while importing the goods declaration form was found to be unfilled, it is a serious lapse and penalty is leviable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall impose on him for possession or movement of goods, whether seized or not, in violation of the provisions of Clause (a) of sub-section (2) or for submission of false or forged documents or declaration, (a) penalty equal to thirty per cent of the value of such goods. In the said provision neither for the seizure of the goods nor for the levy of penalty an attempt to evade the tax or assessment or payment of tax due or likely to be due under this Act is a condition precedent. While under Section 50(4), for the purposes of seizure, the attempt to evade assessment or payment of tax is a condition precedent. The same requirement is also for the purposes of levy of penalty under Section 54(14) of the Act. In this view of the matter the decision of the Apex Court in the case of Guljag Industries vs. CTO and Assistant Commercial Tax Officer vs. Bajaj Electricals Limited are to be read and understood with reference to the provisions of Rajasthan Act. 21. At this stage, it would be appropriate to consider the decision of the Apex Court in the case of State of Rajasthan and Another vs. D.P. Metals, reported in 2002 (1) SCC 279 which also arose from the Rajasthan Sales Tax Act and has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision of Section 50 of the VAT Act, learned Single Judge has observed as follows: The decision given in the case of Jain Shudh Vanaspati Ltd., Ghaziabad and Others vs. State of U.P. and Others (Supra) should be understood in the light of the legal provision as it then stood. The legislatures have consciously amended law to plug the loophole of Section 28-A for the purposes of preventing the evasion of tax. Whatever may be the legal position earlier, law as stands today, is clear and on a plain reading of Section 50 of the VAT Act, it cannot be possibly said that absence of Form 38 is immaterial. 23. Having regard to the aforesaid decisions, referred hereinabove, I am of the view that the Division Bench decision in the case of Jain Shudh Vanaspati Ltd., Ghaziabad and Others vs. State of U.P. and Others (Supra) still holds the field and is relevant for the interpretation of Section 50 of the VAT Act. The language of Sections 28-A (6) and 50(4) is synonymous. There is absolutely no difference in the language. Therefore, the interpretation of Section 28-A read with Section 28-A(6) given by the Division Bench of this Court in the case of M/s Jain Shudh Vanaspati (Supra) is app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 6 of the declaration form was found unfilled, namely, bill, invoice and challan numbers were not mentioned. According to me, mentioning of challan, bill and invoice numbers in the declaration form is very material. By filling column No. 6 and mentioning invoice, bill or challan numbers the declaration form can be correlated with the goods covered by invoices or challan. Photostat copy of Form 38 has been produced before the Court during the course of hearing which is on record. Perusal of the said form reveals that all the columns have been filled except column No. 6. When the applicant was filling all the columns, there cannot be any plausible reason why he has left filling column No. 6. This act appears to be deliberate. Non-filling of column No. 6 i.e. non mentioning of challan number or invoice number may lead to an inference that in case of non-checking of goods, the said declaration form may be used for any other consignment of a similar quantity, quality, weight and value. In the declaration form, some of the columns may not have that much importance, namely, that in case if the invoice number or challan number is mentioned in column No. 6 and the column of weight, qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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