Transit declaration exemption for manufacturing-related electricity generation defeats penalty for non-furnishing of form ST-18A.
Where goods are purchased for use in generating electricity for manufacture of goods for sale, the proviso to Rule 62A(3) of the Rajasthan Sales Tax Rules, 1955 dispenses with furnishing declaration form ST-18A. Electric motors transported for that purpose were covered by the exemption, and production of the bill and bilty at inspection supported compliance. As the statutory dispensation applied, non-furnishing of the form did not justify penalty, and the absence of mens rea did not alter that result. The penalty was therefore not sustainable.
Issues: (i) Whether declaration form ST-18A was required for electric motors purchased and transported for use in generating electricity for manufacture of cotton thread. (ii) Whether penalty could be sustained in the absence of mens rea when the statutory exemption under the rules applied.
Issue (i): Whether declaration form ST-18A was required for electric motors purchased and transported for use in generating electricity for manufacture of cotton thread.
Analysis: The proviso to Rule 62A(3) of the Rajasthan Sales Tax Rules, 1955 dispenses with furnishing of form ST-18A where the goods are intended for use by a registered dealer in the manufacture or processing of goods for sale, or in the generation or distribution of electricity or any other form of power. The goods in question were electric motors purchased for generating electricity for manufacture of thread, and the bill and bilty were produced at the time of inspection.
Conclusion: The form ST-18A was not required, and the cancellation of penalty was justified.
Issue (ii): Whether penalty could be sustained in the absence of mens rea when the statutory exemption under the rules applied.
Analysis: Since the goods fell within the exemption created by the proviso to Rule 62A(3), the case turned on the statutory dispensation itself and not on any alleged intention to evade tax. In that situation, the question of mens rea did not affect the legality of the orders setting aside the penalty.
Conclusion: The plea based on mens rea did not assist the Revenue, and the orders in favour of the assessee were upheld.
Final Conclusion: The revision court affirmed that the transportation of goods for use in manufacturing-related electricity generation was covered by the rule-based exemption, so the penalty could not be sustained.
Ratio Decidendi: Where goods are purchased for use in manufacturing-related electricity generation and are covered by the exemption in the proviso to the applicable transit-declaration rule, non-furnishing of the declaration form does not justify penalty.
TaxTMI 
AI Drafter ✕
TaxTMI 
