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Issues: (i) Whether penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 could be deleted on the ground that mens rea was not proved; (ii) whether, for a contravention relating to the period prior to 22 March 2002, penalty could not be imposed on the owner of the goods under section 78(5).
Issue (i): Whether penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 could be deleted on the ground that mens rea was not proved.
Analysis: Penalty under section 78(5) is attracted when the requirement of section 78(2)(a) is breached. The declaration form ST-18A was neither produced at the time of interception of the vehicle nor furnished in response to the show-cause notice. In these circumstances, the statutory breach stood established. The earlier appellate view that penalty could not be sustained without proof of guilty mind was contrary to the settled legal position that mens rea is not an essential ingredient for contravention of section 78(2).
Conclusion: The deletion of penalty on the ground of absence of mens rea was unsustainable and was against the Revenue.
Issue (ii): Whether, for a contravention relating to the period prior to 22 March 2002, penalty could not be imposed on the owner of the goods under section 78(5).
Analysis: The appellate authorities treated the penalty as invalid because it had been imposed on the owner of the goods. That view was contrary to the settled construction of section 78(5), under which the expression "person in-charge of the goods" includes the owner of the goods. The period of the transaction did not exclude the owner from the ambit of the provision.
Conclusion: Penalty could validly be imposed on the owner of the goods, and the contrary finding was against the Revenue.
Final Conclusion: The revision succeeded, the appellate orders were set aside, and the assessing officer's penalty order was restored.
Ratio Decidendi: For breach of section 78(2) read with section 78(5) of the Rajasthan Sales Tax Act, 1994, mens rea is not a necessary condition for levy of penalty, and the expression "person in-charge of the goods" includes the owner of the goods.
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