Declaration form not required for captive-use manufacturing goods, so penalty under sales tax law was unsustainable.

Penalty under Section 78(5) of the Rajasthan Sales Tax Act, 1994 was not leviable where the goods were purchased for the dealer's own use in its factory and were covered by the registration certificate. Applying the settled principle that mens rea is not required for this penalty, the court focused on whether the statutory declaration form was in fact necessary. Under Rule 53 of the Rajasthan Sales Tax Rules, 1995, no declaration requirement arose on the admitted facts because the goods were specified in the registration certificate and used for manufacturing. The factual finding that the goods were for captive use was upheld.

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Issues: Whether penalty under Section 78(5) of the Rajasthan Sales Tax Act, 1994 was leviable when the goods were purchased for the assessee's own use in its factory and were covered by the registration certificate, so that carriage of declaration form was not required.

Analysis: The larger bench ruling had already settled that mens rea is not a necessary ingredient for penalty under Section 78(5) of the Rajasthan Sales Tax Act, 1994. Applying that principle, the relevant enquiry was whether the statutory declaration form was required on the admitted facts. The assessee was a cement manufacturer and the telephone cables were purchased for use in the factory and were recorded in the registration certificate. Under Rule 53 of the Rajasthan Sales Tax Rules, 1995, where the goods are specified in the registration certificate and are purchased for use in manufacturing, the declaration requirement does not arise. The concurrent factual finding of the appellate authorities that the goods were for own use was not shown to be incorrect.

Conclusion: Penalty under Section 78(5) was not leviable on the facts, and the deletion of penalty was ; the issue was decided against the Revenue and in favour of the assessee.

Final Conclusion: The revision failed because the statutory declaration requirement was inapplicable to the goods purchased for captive use in manufacture, so the penalty order could not be sustained.

Ratio Decidendi: Where goods are purchased for own use in manufacturing and are covered by the dealer's registration certificate, failure to carry the declaration form does not attract penalty under Section 78(5) of the Rajasthan Sales Tax Act, 1994, even though mens rea is not required for imposing such penalty.

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