1997 (3) TMI 593 - AT - VAT and Sales Tax

Tribunal overturns tax decisions, reinstates penalty. Dissenting opinion questions mala fide intent.

The Tribunal accepted the revision petitions, setting aside the decisions of the Deputy Commissioner (Appeals) and the Tax Board, and reinstated the ... - Issues Involved:1. Compliance with statutory requirements for transporting notified goods.2. Validity of using a photostat copy of form S.T. 18A.3. Necessity of mala fide intention for imposing penalties.4. Seizure of goods as a condition precedent for penalty.5. Discretion in imposing and reducing penalties.Detailed Analysis:1. Compliance with Statutory Requirements for Transporting Notified Goods:The primary issue revolves around whether the respondent complied with the statutory requirements under sections 22A(3), 22A(7), and 22C of the Rajasthan Sales Tax Act, 1954, and rule 62A(3) of the Rajasthan Sales Tax Rules, 1955. The Tribunal held that the respondent failed to comply with these provisions by producing a photostat copy of form S.T. 18A instead of the original document. The Act mandates the production of the original document, and the use of a photostat copy was deemed insufficient and non-compliant with the statutory requirements.2. Validity of Using a Photostat Copy of Form S.T. 18A:The Tribunal concluded that the production of a photostat copy of form S.T. 18A was not a sufficient compliance with the Act and the Rules. The original document is required to be produced as it is specifically obtained from the department by the dealer for the purpose of importing or bringing goods into the State. Allowing the use of photostat copies could lead to misuse and manipulation, undermining the regulatory framework. The original document had already been used by the respondent on May 16, 1988, and thus, its photostat copy could not be reused for importing other goods.3. Necessity of Mala Fide Intention for Imposing Penalties:The Tribunal addressed whether mala fide intention is a necessary ingredient for imposing penalties under the Act. It was held that mala fide intention need not be a necessary ingredient for every offence under the statute. The Tribunal referenced a previous decision where it was established that penal consequences can be imposed on acts committed with or without a guilty mind, especially in economic offences. The Tribunal concluded that the respondent's failure to produce the original document indicated a breach of mandatory provisions, regardless of the intention.4. Seizure of Goods as a Condition Precedent for Penalty:The respondent argued that the seizure of goods is a condition precedent for imposing a penalty under section 22A(7) of the Act. The Tribunal found this contention to be baseless. It was noted that the goods were indeed seized on May 27, 1989, as evidenced by form S.T. 2, which bore the signatures of the driver and indicated the release of goods the following day. The Tribunal clarified that while the officer in charge has the authority to seize goods not covered by proper documents, it is not mandatory to do so in all circumstances.5. Discretion in Imposing and Reducing Penalties:The Tribunal examined whether the Deputy Commissioner (Appeals) and the Tax Board exercised their discretion properly in reducing the penalty from Rs. 51,000 to Rs. 15,000. The reduction was based on the finding that there was no mala fide intention on the part of the respondent. The Tribunal disagreed with this basis, asserting that mala fide intention need not be proven and can be inferred. Consequently, the Tribunal upheld the original penalty imposed by the assessing authority, concluding that the reduction in penalty was not justified.Separate Judgment:Milap Chandra Jain, J. (Chairman) dissented from the majority view. He emphasized that the Deputy Commissioner (Appeals) and the Tax Board consistently found no mala fide intention on the part of the respondent, which is a finding of fact. Citing previous judgments, he argued that the discretion exercised by the Deputy Commissioner (Appeals) in reducing the penalty should not be interfered with, as it did not involve a question of law. He concluded that the applications for revision should be dismissed.Conclusion:The Tribunal accepted the revision petitions, set aside the decisions of the Deputy Commissioner (Appeals) and the Tax Board, and restored the original order of the assessing authority imposing a penalty of Rs. 51,000. The dissenting opinion by Milap Chandra Jain, J. argued for dismissing the revision petitions based on the absence of mala fide intention and the discretionary power of the appellate authorities.