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TMI Blog2018 (10) TMI 1246X X X X Extracts X X X X X X X X Extracts X X X X ..... or transporting the goods. - The penalty referred under section 15-A is to be imposed after such inquiry, if any, as the Assessing Authority deems necessary. The question as to whether mens rea or malintent to evade tax is necessary for imposition of penalty under the aforesaid provisions, came up for consideration before a Division Bench of this Court in the case of M/s Oriental Carbon Ltd. [2010 (12) TMI 1075 - ALLAHABAD HIGH COURT], wherein it was held that mere breach of provision of section 28-A would not be sufficient for imposition of penalty under section 15-A(1)(o) of the Act 1948, meaning thereby malintent i.e. the intent to evade tax was necessary for imposition of such penalty. There are a catena of decisions of this Court wherein it has been held that for imposition of penalty under section 15(1)(o) of the Act 1948 the intent to evade tax i.e. a malintent, is necessary. Even otherwise, in the present case the record reveals that the Assessing Authority recorded a categorical finding that there was no malintent on the part of the revisionist to evade tax yet it imposed penalty on the ground that there was violation of section 28-A. The First Appellate Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ghaziabad as affirmed by Hon ble Supreme Court in the case reported in 1997 NTN (Vol-10) page 105 in which it has been held that no penalty can be imposed if there is no intention to cause any loss to the revenue or to evade tax in importing into State hence no penalty clan be imposed ? (2) Whether the assessing authority as well as the Tribunal having recorded a finding that there was no intention to evade payment of tax; hence there is technical breach of provisions of section 28-A no payment can be imposed since there is no intention to evade tax in importing the goods into State ? (3) Whether on non production of Form-31 the applicant cannot be penalized in view of la laid down by this Hon ble Court in the case of Hyderabad Industries Vs. CTT reported in 1996 UPTC 776 a s followed in Pepsico India Limited reported in 2003 UPTC 856. (4) Whether even if delivery is taken without getting Form-31 endorsed, penalty under section 15A(1)(o) of the Act cannot be levied on mere technicalities unless case of attempt to evade payment of tax is made out, as held by this Hon ble Court in the case of M/s Modi Industries Limited and followed in M/s Wimco Ltd Bareilly and M/s P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s more than ₹ 10 lacs, therefore, considering the intent to evade Entry Tax the goods were seized/detained, hence security to the extent of ₹ 3163200.00 was demanded on the estimated value of the goods i.e. ₹ 26360000.00. The dealer submitted an application under section 13-A(6) of the Act 1948 whereupon the goods were released on furnishing a surety of ₹ 900000.00 plus ₹ 154400.00 and bankguarantee of ₹ 2108800.00. The mobile squad sent the report dated 19.6.2007 for imposition of penalty to the office of the Deputy Commissioner-I, Trade Tax, Lucknow, whereupon a notice under section 15A(1)(o) of the Act 1948 was issued on prima facie satisfaction regarding violation of section 28-A of the Act 1948. In response thereto, the reply was submitted in the penalty proceedings by the revisionistdealer stating the same things i.e. all the requisite documents including the declaration-form duly filled were available with the goods and the driver, but were not produced by him inadvertently, which was merely a technical lapse, therefore, no penalty should be levied. Full cooperation was extended at the time of inspection by the mobile squad and all th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observation that mens rea on the part of the dealer was established as non-production of the declaration-form at the check-post disclosed the intent to evade entry-tax. The appellate authority considered the decision cited by the dealer (revisionist herein) including the Division Bench judgment in the case of CTT vs. M/s Oriental Carbon Limited, 1985 UPTC 613, and thereafter held that non-production of the declaration-form at the requisite centre entailed violation of section 28-A and that entry-tax was not deposited on the imported goods, therefore, in this situation the malintent to evade tax was implicit, therefore, even in view of the decisions cited imposition of penalty was justified. Thus, while the Deputy Commissioner recorded the finding that there was no malintent or mens rea involved, the Joint Commissioner on the appeal of the revisionist-dealer held otherwise. Thereafter the revisionist-dealer filed a second appeal before the U.P. Trade Tax Tribunal at Lucknow. The Tribunal affirmed the judgment of the Joint Commissioner for the same reason. The Tribunal did not accept the contention of the appellant-revisionist and held as under: The Tribunal also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner of Sales Tax, U.P.; [1996] 9 NTN DX 343, M/s Gulmarg Chemicals Scientific Works, Aligarh v. Commissioner of Sales Tax, U.P.; [2003] 23 NTN DX 1061, M/s Polyplex Corporation Limited v. Commissioner of Trade Tax; [2012] NTC (Vol. 49)-196, Wishwa Mittar Bajaj Sons v. Commissioner, Trade Tax; and [2004] 25 NTN DX 897,1993 U.P.T.C. 657, M/s N.G. Trading Company, Meerut v. Commissioner of Sales Tax ors. He also pointed out that the decision of the Division Bench in the case of Oriental Carbon Ltd. had been upheld by the Supreme Court, that too, after conversion of the Special Leave Petition filed by the Revenue into a Civil Appeal which was dismissed, therefore, now, the said judgment of the Supreme Court constitutes a binding precedent on the issue and was an affirmation of the decision by the Division Bench of this Court. Sri Rohit Nandan Shukla, learned counsel appearing for the State on the other hand relied upon a Single Judge Bench decision of this Court rendered in the case of Fag Precision (supra) to contend that this Court after considering various decisions of the Supreme Court had held that mens rea or malintent to evade tax was not a necessary requireme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be consigned by road, - (a) the importer shall furnish to the consignor the declaration in the prescribed form in duplicate duly filled in and signed by him and the driver or any other person-in-charge of any vehicle carrying any such goods shall carry with him the copies of such declaration duly verified by the consignor in the prescribed manner together with such other documents as may be prescribed, and shall deliver one copy of such declaration,- (i) where such goods are brought by a road on which a check-post or barrier is established under Section 28, to the officer-in-charge of such check-post or barrier before crossing the check-post or barrier, and (ii) where such goods are brought by a road on which no such check-post or barrier is established, to the officer-in-charge of the nearest check-post or barrier established under the said section before transporting such goods further within the State; and the other copy of the declaration and the remaining documents alongwith the goods to the importer or his agent, (b) the officer-in-charge o the check-post or barrier shal grant a receipt for the copy of declaration delivered to him and it shall not be neces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 13, 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 him name and address and the names and addresses of the owner of the vehicle and of the consignor and the consignee of the goods. (6) Where the officer making the search or 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 subsections 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. (7) The provisions of sub-sections (2), (6) and (8) of Section 13- A shall mutatis mutandis apply to such detention, as they apply to seizure under that section. (8) Nothing contained in this section shall be construed to impose any obligation on any railway administration or railway servant or the post offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iolation of section 28-A, then the penalty is imposed under section 15-A, in this case under clause (1)(o) of section 15-A, as, there was contravention of the provisions of section 28-A while importing or transporting the goods. The penalty referred under section 15-A is to be imposed after such inquiry, if any, as the Assessing Authority deems necessary. The question as to whether mens rea or malintent to evade tax is necessary for imposition of penalty under the aforesaid provisions, came up for consideration before a Division Bench of this Court in the case of M/s Oriental Carbon Ltd. (supra) , wherein it was held that mere breach of provision of section 28-A would not be sufficient for imposition of penalty under section 15-A(1)(o) of the Act 1948, meaning thereby malintent i.e. the intent to evade tax was necessary for imposition of such penalty and the submission of the learned counsel for the revenue to the contrary was repelled. Against the said judgment the Revenue filed a special leave petition which was converted into Civil Appeal No.1548 of 1985 and the same was dismissed. Thus, the decision of the Division Bench of this Court stood affirmed by the Hon ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any intent to evade tax penalty was not imposable under section 15-A(1)(o) read with section 28-A of the Act 1948. In view of the above, especially the judgment of the Division Bench in M/s Oriental Carbon Ltd. (supra) which has been affirmed by the Supreme Court in appeal malintent or the intention to evade tax under the Act 1948 is essential for attracting a penalty under the aforesaid provisions. Furthermore, even otherwise, in the present case the record reveals that the Assessing Authority recorded a categorical finding that there was no malintent on the part of the revisionist to evade tax yet it imposed penalty on the ground that there was violation of section 28-A. The First Appellate Authority held that there was an intention to evade Entry Tax (not a tax under the Act 1948 under which the proceedings were being held). This conclusion was arrived at by the first Appellate Authority merely because the declaration form -31 which admittedly was duly filled and complete, could not be produced by the driver of the vehicle at the check-posts. The Tribunal affirmed the decision of the First Appellate Authority for the reasons already mentioned hereinabove, but while do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the ground of an alleged intention to evade Entry Tax which in fact was not imposable under the Act 1948. If there was any such intent to evade Entry Tax the revisionist would be liable under the Entry Tax Act and not under the Act 1948. As this was the only reason given by the First Appellate Authority and the Tribunal, therefore, their judgments are not sustainable on this count. As regards the order of the Assessing Authority the same is not sustainable for the reason he arrived at the conclusion that there was no intent to evade tax yet imposed penalty merely on a technical contravention of section 28-A although he had recorded a specific finding that Form-31A was duly filled up and complete and the consignment was also accompanied by all other relevant documents. This Court is also of the view that once the Tribunal and other authorities have held that the consignment was accompanied by the requisite documents and Form-31A duly filled and complete then there was no question of misuse of the said form nor could there be any intent to evade tax under the Act 1948 as such reasoning given by the Tribunal in this regard is not sustainable on this count especially in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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