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TMI Blog2018 (8) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... r to invoke Section 10(a) of the Act, the very important ingredient is whether there is mens rea or involvement of mind to defraud the Government. Mens rea or guilty mind, it is sine quo non before invoking Section 10(a) of the Act. When an Authority invokes Section 10(a) of the Act, Authority should clearly establish or elicit defraud to the Government by misusing Form-C for the purpose of resale. When it is permissible under Part-M of Schedule-II of Entry No.1 of KST Act, which specifically includes the machineries of the nature which respondent has bought from outside, it is permissible for the purpose of his use - it cannot be held that he has misused Form-C for the purpose of defrauding the Government. The petitioner has utterly fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ish the substantial question of law involved in the matter and it is submitted that the substantial question of law taken by the appellant for interference is as to whether the Karnataka Appellate Tribunal erred in law while coming to a conclusion that there was no mens rea on the part of the respondent herein. It is the case of the petitioner that mens rea is established by conduct of the respondent himself in purchasing the machineries in contravention of provision relating to Form-C of Central Sales Tax Act. Under these circumstances, the question of reestablishing the mens rea, does not arise. The facts leading to the case are that the respondent herein had purchased four trucks from a dealer in Madhya Pradesh. For producing Form- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its to dismiss this petition and it is his submission that the impugned order levying the tax under Section 10(a) of the Act and also the confirmation order passed by the First Appellate Authority is contrary to Section 10(a) of the Act and also in contravention of the Judgments of the High Court and also the Judgments of the Hon ble Supreme Court wherein it is held that before imposing penalty under Section 10(a) of the Act, it is the duty on the part of the State to establish whether there was mens rea or intention to misuse Form-C or not. Unless the same is established, it is not permissible to invoke Section 10 of the Act. On this ground, the learned counsel submits to dismiss this petition. He also referred to Part-M of Second Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent has committed fraud. In respect of the submission and the stand taken by the petitioner, the First Appellate Authority, though had confirmed the order, it had not given thought in respect of the requirements and the ingredients as required under Section 10(a) of the CST Act. The main ingredient under Section 10(a) of the Act is that unless it makes out that the respondent or purchaser has used Form-C for the purpose of the availing concession of tax in contravention of provisions, it is not permissible to levy penalty. In this regard, the Appellate Tribunal has referred the judgments of the Hon ble Supreme Court in the case of Commissioner of Sales Tax, U.P. Vs. Sanjiv Fabrics with Hari oil general mills v. Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 willful disregard thereof. From reading of the judgments referred to above, it is quite clear that in order to invoke Section 10(a) of the Act, the very important ingredient is whether there is mens rea or involvement of mind to defraud the Government. Mens rea or guilty mind, it is sine quo non before invoking Section 10(a) of the Act. When an Authority invokes Section 10(a) of the Act, Authority should clearly establish or elicit defraud to the Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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