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TMI Blog2024 (12) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... ere the penalty prescribed under a fiscal statute, is dependent on happening of particular act without anything else to be established, no necessity is to be established and the penalty is a natural consequence of the happening of that event, however, in the physical institute, if a penalty is prescribed dependent on factor as specified in the said statutes, the penalty can be imposed only on the happening of the said event and after observing the conditions as prescribed. In the present case, the interpretation of Section 10(d) has come up for consideration before the Supreme Court in the judgment in COMMISSIONER OF SALES TAX, UP. VERSUS SANJIV FABRICS AND HARI OIL GENERAL MILLS [ 2010 (9) TMI 461 - SUPREME COURT] , and the Supreme Court has after considering the statutory provisions has held that it is essential that the mens rea be established. Even otherwise on the plain reading of Section 10(d) the phrase reasonable cause has been duly discharged by the revisionist by producing the certificate of an Engineer, thus necessary ingredient for levy of penalty have neither been alleged established or proved in the present case, as such, for the reasons recorded above, the order of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce amount, penalty of Rs. 8241985/- was imposed against the revisionist for the Financial Year 2005-06. The said order was challenged before the tribunal, the tribunal noticed the entire facts including the fact with regard to the production of the certificate by the Engineer, however, the tribunal recorded that the only argument advanced before the tribunal was that in purchasing the cement and consuming the same, there was no mens rea at the instance of the revisionist and as such, no penalty could be imposed against them. However, the tribunal dismissed the appeals preferred by revisionist and upheld the penalty order. 4. While arguing the present revision, the submission of the counsel for the revisionist is that entitlement of reduced rates of tax on sales in the course of inter state trade is available by virtue of Section 8(1) read with Section 8(3)(b) of the CST Act. Section 8(3)(b) of the CST Act is quoted herein below: 8 (3) The goods referred to in {***} sub section (1)- (b) { .} are goods of the class specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any rules made by the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CST Act was interpreted by the Supreme Court and was held as under :- 22. In view of the above, we are of the considered opinion that the use of the expression falsely represents is indicative of the fact that the offence under Section 10(b) of the Act comes into existence only where a dealer acts deliberately in defiance of law or is guilty of contumacious or dishonest conduct. Therefore, in proceedings for levy of penalty under Section 10A of the Act, burden would be on the revenue to prove the existence of circumstances constituting the said offence. Furthermore, it is evident from the heading of Section 10A of the Act that for breach of any provision of the Act, constituting an offence under Section 10 of the Act, ordinary remedy is prosecution which may entail a sentence of imprisonment and the penalty under Section 10A of the Act is only in lieu of prosecution. In light of the language employed in the Section and the nature of penalty contemplated therein, we find it difficult to hold that all types of omissions or commissions in the use of Form `C' will be embraced in the expression false representation . In our opinion, therefore, a finding of mens rea is a conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Weaving Mills reported in 2009 (238) E.L.T. 3 (S.C.). This Court considering Section 11 AC of the Act held in para 19 at page 12 of the report as follows: 19. From the aforesaid discussion it is clear that penalty under Section 11AC, as the word suggests, is punishment for an act of deliberate deception by the assessee with the intent to evade duty by adopting any of the means mentioned in the section. 9. Similarly the Supreme Court had the occasioned to deal with the similar issue in the case of CIT Versus Reliance Petroproducts Pvt. Ltd, 2010 Vol-11, SCC Page 762. 10. In the light of the said submissions, the submission of the counsel for the revisionist is that order imposing the penalty as upheld by the tribunal is liable to be set aside in the absence of ingredient for levying the penalty under Section 10 (d) being absent. 11. The counsel for the respondent strongly opposes the revision by arguing that the scope of revision before this Court is very limited one and is confined to its jurisdictional error, perversity and procedural irregularities. He further argues that before the tribunal, the revisionist had only argued that the acts of the revisionist were not with a mala ..... X X X X Extracts X X X X X X X X Extracts X X X X
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