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TMI Blog2019 (7) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions contained in Section 17A of the Act, we are of the considered opinion that mens rea on the part of the assessee is not an essential element to be proved for imposing penalty under that provision. The scheme of the Act in imposing penalty is very clear. The defaults and failures which attract penalty are nothing but violations or failures or defaults of statutory civil obligations provided under the Act. The proceedings for imposing penalty under the Act are neither criminal nor quasi-criminal - The penalty is leviable in cases of default or failure of obligations under the Act which are civil in nature. There is nothing in the provisions contained in Section 17A of the Act which indicates that guilty intention of the assessee is required to be established before imposing penalty. Thus there is no question of proof of guilty intention or mens rea by the assessee and it is not an essential element for imposing penalty under Section 17A of the Act. However, we take note of the fact that, for evasion of payment of luxury tax, penalty cannot be imposed under Section 17A of the Act. This is for the reason that the provision contained in Section 17(2)(b)of the Act takes care of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as dismissed. This revision petition is filed challenging the order of the Tribunal. 5. We have heard Sri.Julian Xavier, learned counsel for the petitioner and Sri.V.K.Shamsudheen, learned Senior Government Pleader. 6. Learned counsel for the petitioner has submitted that the assessee was not aware of the amendment made to the Act in the year 2008 bringing hospitals within the purview of the Act. He would submit that non-registration of the hospital under the Act and non-payment of the luxury tax by the petitioner was not intentional. Learned counsel would contend that mens rea on the part of the assessee is an essential element to impose penalty under the Act. 7. Per contra, learned Senior Government Pleader would contend that mere violation of the provisions of the Act would attract imposition of penalty on the assessee. He has contended that it is not necessary to establish mens rea to impose penalty under Section 17A of the Act. 8. Section 2(fb) of the Act states that 'luxury provided in a hospital' means accommodation for residence for use of amenities and services provided in a hospital the rate of charges of which, excluding charges of food, medicine and prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Act and every proprietor liable to get himself registered under the Act and every proprietor who is required to do so by the assessing authority, irrespective of the quantum of his total income, shall, on or before the tenth day of every month, submit to the assessing authority a return as prescribed, together with a receipt of a treasury chalan, crossed cheque or crossed demand draft in favour of the assessing authority for the amount of tax due. 10. Section 17A of the Act reads as follows: "17A. Imposition of penalties by assessing authority.- If an assessing authority is satisfied that any person,- (a) liable to pay tax under this Act,- (i) has failed to keep true and complete account or (ii) has failed to submit any return as required by the provisions of this Act or the rules made thereunder or has submitted an untrue or incorrect return; or (b) has failed to submit any return as required by the provisions of this Act or the rules made thereunder or has submitted an untrue or incorrect return; or (c) has prevented or obstructed inspection, entry, search or seizure by any officer, or (d) has acted in contravention of the provisions of this Act or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the petitioner has also relied upon the decision of this Court in Mathew M. Thomas v. Sales Tax Officer : 1990(1) KLT 18 to contend that mens rea is an essential ingredient to be proved for imposing penalty on an assessee. It is a case in which legality of 'fine' imposed under Section 17 of the Kerala Tax on Luxuries in Hotels and Lodging Houses Act, 1976 was considered. It was held that Section 17 of that Act dealt with offences and mens rea is an essential ingredient of those offences and assessing authority cannot impose any fine and only a court can impose fine. This decision has no application to penalties imposed by assessing authority under Section 17A of the Act. 17. Mens rea is not an essential ingredient of contravention of the provisions of a civil statute. Penalty is attracted as soon as contravention of the statutory obligations as contemplated by the statute is established. The intention of the parties committing such violation is immaterial. Breach of a civil obligation which attracts penalty under the provisions of a statute would immediately attract the levy of penalty irrespective of the fact whether the contravention was made by the defaulter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entence. There can be no dispute that having regard to the provisions of Section 276C, which speaks of wilful failure on the part of the defaulter and taking into consideration the nature of the penalty, which is punitive, no sentence can be imposed under that provision unless the element of mens rea is established. ...... In the case of a proceeding under Section 271(1)(a), however, it seems that the intention of the legislature is to emphasise the fact of loss of revenue and to provide a remedy for such loss, although no doubt an element of coercion is present in the penalty. In this connection the terms in which the penalty falls to be measured is significant. Unless there is something in the language of the statute indicating the need to establish the element of mens rea it is generally sufficient to prove that a default in complying with the statute has occurred. In our opinion, there is nothing in Section 271(1)(a) which requires that mens rea must be proved before penalty can be levied under that provisions". 21. On a close scrutiny of the provisions contained in Section 17A of the Act, we are of the considered opinion that mens rea on the part of the assessee is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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