9911796707
TMI Blog2007 (4) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... arch, 2006. According to the Company for the purpose of manufacturing chocolates at their industrial unit in Malanpur, Cocoa Bean is the raw material, head office of the Company is situated in Mumbai, purchase the raw material is done by the office at Mumbai. The purchased raw material is then sent to M/s Dr. Writers Food Products Private Limited, Phaltan, district Satara, Maharashtra for converting the said beans into Low Moisture Cocoa Mass (hereinafter referred to as LMC). The arrangement with M/s Dr. Writers Food Product Limited is that they will send the consignment of LMC to the Company at Bhind. A consignment of LMC was sent on 26th August, 2002 through M/s Sandeep Transport Company (petitioner No. 2). The driver of the transporter was handed over all the documents, namely; Excise advice-cum-invoice No. 287 dated 26th August, 2002 copy of MTRs., and Form No. 75 dated 28th August, 2002 bearing No. B:381x45. However, because of some mistake in the office at Mumbai and due to over sight, Form No. 75 was left in Mumbai but all other documents including Excise advice-cum-invoice and MTRs were sent along with the vehicle. Copies of these documents are filed as Annexure P/2 and Ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actory situated at Malanpur, therefore, the same could not be taxed. That apart, inviting my attention to the delivery challan, excise advice-cum-invoice, MTRs and other documents she points out that in all these documents the particulars of the material and other details are clearly mentioned. It was a case where because of oversight and carelessness, Form No. 75 did not accompany the consignment. The Form No. 75 was also produced and submitted within three days but the authorities have imposed the penalty which is unsustainable accordingly the learned counsel submitted that as there is no intention on the part of the Company to evade tax and there being no malice, a bona fide mistake technical in nature is not condoned and tax and penalty imposed without taking note of the totality of the facts and circumstances of the case. It is pointed out by her that under sub-section (7) of section 45-A, three eventualities are contemplated which may entitle imposition of penalty. In the present case, the conditions stipulated in clause (a) to sub-section (7) is found to be breached and this being a technical breach, the authorities should have condoned the delay and should not have been imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter. She has invited my attention to a Full Bench decision of this Court in the case of K.P. Govil vs. Jawaharlal Nehru Krishi Vishwa Vidyalaya, Jabalpur and another, 1987 JLJ 341 and certain other cases to point out that a part of cause of action is deemed to have been arisen in a place where the adverse consequence of the order is established. Having heard learned counsel for the parties, I propose to deal with the preliminary objection raised by the respondents at the very outset. While considering the question with regard to territorial jurisdiction of this Bench, a Full Bench in the case of K.P. Govil (supra) has taken note of the provisions of Article 226 of the Constitution, the import of the word, cause of action and it has been held that the cause of action would also arise in a place not only where the order is passed but also at a place where the consequence of the order has effect on the person concerned. In the present case, the material was being transported from Mumbai and it was coming to Malanpur. Orders have been passed by the authorities of the respondents addressing M/s Cadbury India Limited, Malanpur, district Bhind to pay the amount of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the goods were seized. That being so, the check post officer was well within his right in taking action. However, while taking action, the competent authority of the check post and the appellate authority, so also, the re-visional authorities proceeded on a assumption that the declaration under Form No. 75 was not produced and the intention to facilitate evasion of tax was presumed due to non-production of this statutory form in the check post. The presumption was drawn in the matter of evasion of tax without taking note of the circumstances that were existing in the present case. The authorities concerned failed to take notice of a important factor in as much as what was being transported was not a saleable item, as per Annexure P/2, invoice No. 283 which is a invoice pertaining to excise advice-cum-invoice, the goods were LMC, according to Company it was transfer of goods (raw material) from depot., to unit for manufacture of chocolates and not for sale. It was in fact transfer of raw material from one place to another. There is nothing on record to indicate that LMC which was being transported was a saleable product, and therefore, subjected to payment of tax. Neither the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the stature. (Emphasis Supplied) If the facts and circumstances of the present case are evaluated in the back drop of the aforesaid principle laid down by the Supreme Court in the matter of imposition of penalty, it would be seen that in the present case, penalty has been imposed mechanically without any dishonest intention or malice or mens rea having been established or proved. The bona fide reason given by the Company explaining the circumstances in the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case does not establish any intention on the part of the Company to evade tax. The lapse found established is a technical lapse unaccompanied by any mala fide or dishonest intention and therefore can be classified as a bone fide mistake, and accordingly, under such circumstances, imposition of penalty was not warranted. Considering the totality of the facts and circumstances of the case, I am of the considered view that in the matter of imposition of penalty on the Company, all the authorities who have passed the orders have not acted in accordance with law and exercise their discretion in a manner which cannot be approved. Accordingly, keeping in view the principles which govern the imposition of penalty as indicated hereinabove, this petition is allowed. The impugned orders passed by the assessing authority, Assistant Commissioner, Annexure P/5 dated 1st September, 2002, 29th July, 2003 (Annexure P/8), and the revisional authority, Additional Commissioner dated 25th August, 2004 as contained in Annexure P/9 are quashed. Authorities concerned are directed to refund the amount of penalty deposited by the Company. Petition stands allowed and disposed of without any ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
