TaxTMI 
TaxTMI 
2008 (11) TMI 374
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....ice was issued. In reply to the show-cause notice the representative of the respondent (importer) submitted that the duty of filling in the declaration form ST-18A was the responsibility of the transporter and the consignor and on account of mistake on the part of the transporter the said form was not duly filled in. The A.O. came to the conclusion that goods were imported without the declaration form ST-18A which amounted to violation of section 78(2)(a) of the Rajasthan Sales Tax Act, 1994 (for short, "the 1994 Act") read with rule 53 of the Rajasthan Sales Tax Rules, 1995 (for short, "the 1995 Rules"). Hence, on the price of the goods of Rs. 2,85,000, penalty at the rate of 30 per cent to the tune of s. 85,500 came to be imposed. 3. Aggrieved by the decision of the A.O. imposing penalty, the respondent carried the matter in appeal to the Deputy Commissioner (Appeals). Before the appellate authority it was contended on behalf of the respondent that the declaration form relating to the goods was sent to the consignor but through oversight it was left behind and therefore there was no intention to evade the tax and that the decision of the A.O. to impose penalty for not carrying....
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....id declaration form was sent by the consignor to the transporter but on account of bona fide mistake of the transporter the same was left out, it could not be said that there was any intention to evade tax. Accordingly, the High Court confirmed the decision of the Rajasthan Tax Board. Hence, this civil appeal by the Department. 6. As a matter of preface, we may state that we have come across a number of matters where the Department has sought to impose penalty under sec- tion 78(2) read with section 78(5) of the said 1994 Act. It appears that in a large number of cases evasion has taken place on account of the importer's (consignee's) failure to fill in declaration form ST-18A. Moreover, in all these cases we found that when scrutiny takes place the declaration form(s) is sought to be produced after incorporating the details required to be given in that form. In all these cases, the declaration forms are duly signed but important columns are left blank. Those columns are filled in either when scrutiny begins or at the stage of investigation/enquiry. It is important to note that these declaration forms are similar to returns under the Income-tax Act. We are not on the ver....
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....oard held that the burden was on the Department to establish guilty mind (mens rea) on the part of the consignee. Accordingly, the appeal was allowed. Thereafter a revision petition was filed by the Department. By the impugned judgment, the High Court held that mens rea was not a sine qua non for levying penalty in the case of contravention of section 22A(3) of the 1954 Act [section 78(2) of the 1994 Act]. Even on the facts, the High Court held that not filling the form was a deliberate act which indicated, in any event, an intention of the consignee to evade the tax. Therefore, in that matter, the consignee filed its appeal by special leave in this court. After examining the scheme of section 22A(3) of the 1954 Act, rule 62A of the Rajasthan Sales Tax Rules, 1955 as well as the provisions of section 78(2) and section 78(5) of the 1994 Act read with rules 53 and 54 of the Rajasthan Sales Tax Rules, 1995, this court held, inter alia, that mens rea was not necessary for liability of penalty under section 78(5) of the 1994 Act. It was held that transport of goods in movement with the prescribed declaration form duly signed but without giving material particulars would automatically at....
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....in by the consignor. The nature of the transaction as to whether it is by consignment or by depot transfer or by inter-State sale has to be indicated by the consignee. Similarly, the consignee has to indicate the description of the goods. In the present case the consignee (assessee) has left the requisite columns blank. Part B has to be filled in by the consignor. Part B requires the consignor to give the estimated value of goods. He has also to give invoice number and the date. It is important to note that the declaration form is collected by the consignee from his A.O. in the State of Rajasthan. The consignee gives an undertaking to get Part B filled by the consignor. Similarly, the consignee gives a declaration that facts stated in Part A are true to his knowledge. In the present case, the entire form was left blank though it had been signed by the consignee. Therefore, the declaration given by the consignee is meaningless. There are no facts given in Part A. There is no identity of the goods transported. There is no description of the goods in movement. As stated above, the original has to be placed before the A.O. by the officer at the check-post. If the form which ultimately ....
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....ecause it is left blank then in that event section 78(5) provides for imposition of monetary penalty for non-compliance. 27. Default or failure to comply with section 78(2) is the failure/default of statutory civil obligation and proceedings under section 78(5) are neither criminal nor quasi-criminal in nature. The penalty is for statutory offence. Therefore, there is no question of proving of intention or of mens rea as the same is excluded from the category of essential element for imposing penalty. Penalty under section 78(5) is attracted as soon as there is contravention of statutory obligations. Intention of parties committing such violation is wholly irrelevant. 28. Moreover, in the present case, we find that goods in movement carried with form No. 18A/18C. The modus operandi adopted by the assessees itself indicates mens rea. This is not the case where goods in movement are carried without the declaration forms. In the present matter, as stated above, goods in movement were carried with the declaration forms. These forms were duly signed. However, material particulars were not filled in. The explanation given by the assessees in most of the cases is that th....
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.... to the assessees to contend that in certain cases of inter-State transactions they were not liable in any event for being taxed under the RST Act 1994 and, therefore, penalty for contravention of section 78(2) cannot be imposed. As stated hereinabove, declaration has to be given in form 18A/18C even in respect of goods in movement under inter-State sales. It is for contravention of section 78(2) that penalty is attracted under section 8(5). Whether the goods are put in movement under local sales, imports, exports or inter-State transactions, they are goods in movement and therefore, they have to be supported by the requisite declaration. It is not open to the assessee to contravene and say that the goods were exempt. Without disclosing the nature of transaction it cannot be said that the transaction was exempt. In the present case, we are only concerned with the goods in movement not being supported by the requisite declaration. 32 See para 25 in 9 VST. In the present case, the assessees have relied upon the judgment of this court in the case of State of Rajasthan v. D.P. Metals [2002] 1 SCC 279 [2001] 124 STC 611 (SC).. In that case the facts were as follows. The assesse....
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.... to the facts of the present case. As stated, we are concerned with the blank declaration form 18A/18C which has travelled with the goods in movement, though signed, was left deliberately blank. The declaration form 18A/18C is like a return under the Income-tax Act, 1961. The assessing officer completes the assessment on the basis of form 18A/18C. If that form is left blank in all material respects then it is impossible for the A.O. to arrive at the taxable turnover of the assessee. Therefore, in our view, the judgment of this court in D.P. Metals [2002] 1 SCC 279 [2001] 124 STC 611 (SC)., has no application to the present case." 9. Reading the judgment in the case of Guljag Industries [2007] 7 SCC 269, two points are very clear. That judgment rules out mens rea as an essential ingredient of the offence under section 78(2) for which penalty is imposed under section 78(5). At the same time, the said judgment, vide para 28 See para 22 in 9 VST., holds that even if mens rea constituted an essential ingredient of an offence still the modus operandi adopted by the consignee of not giving particulars in form ST-18A per se indicated mens rea (intention to evade taxes). In the said judg....
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....(a) Provisions contained in the 1954 Act: Section 22A. Establishment of check-post or barrier and inspection of goods while in transit. (3) The owner or person in charge of a vehicle, boat or animal shall carry with him a goods vehicle record, a tripsheet or a log book, as the case may be, and such other document, as may be prescribed in respect of the goods carried in or on the vehicle, boat or animal, as the case may be, and produce the same before any officer-in-charge of check-post or barrier or any other officer as may be empowered by Government in that behalf. The owner or person in charge of a vehicle, boat or animal entering the State limits or leaving the State limits shall also give a declaration containing such particulars as may be prescribed of the goods carried in or on the vehicle, boat or animal, as the case may be, before the officer-in-charge of the check-post or barrier or the officer empowered as aforesaid and give one copy of the declaration to such officer, and keep one copy with him. (7)(a) The officer-in-charge of the check-post or barrier or any other officer not below the rank of an Assistant Commercial Taxes Officer, empowered i....
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....t proviso. (b) Such officer may release any of the goods seized under sub- section (5) or sub-section (6) on payment of the penalty under clause (a) on furnishing such security in such form as may be prescribed for the payment thereof, as he may consider necessary. (c) such officer may, for sufficient reasons release any of the goods seized as aforesaid even before proceeding under clause (a) or during the course of proceedings under that clause, on furnishing of security of an amount equal to the estimated value of the goods to be released if he considers it necessary so to release the goods." (emphasis supplied) Provisions contained in the 1955 Rules: "Rule 62A. Documents prescribed under section 22A(3).- (1) The owner or person-in-charge of a vehicle, boat or animal shall carry with him a bill of sale or dispatch memo, and declarations as provided under the Act and Rules: Provided that no such bill of sale, despatch memo or declarations shall be necessary to be carried or furnished at check-post, in respect of personal effects otherwise than the goods referred to in sub-rule (2) of any person or exempted goods as def....
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....obtain form ST-18 under clause (a) shall be rejected if the Commercial Taxes Officer is satisfied that such form is not required for bona fide use under the said clause. (3) A registered dealer,- (a) who imports any goods as notified by the State Government for sale, use in the manufacture or processing of goods for sale or in mining or generation or distribution of electricity or any other form of power or packing of goods for sale, or (b) who receives any goods consigned to him from outside the State for sale, Shall make and furnish or cause to be furnished declaration in form ST-18A. The counterfoil of the declaration shall be retained by such dealer and its portion marked original and duplicate shall be produced before the officer-in-charge of the check-post who shall retain such original portion and return such duplicate portion duly sealed in token of having verified it to the person producing it. Such duplicate portion of the declaration shall then be furnished by the dealer along with his quarterly statement in form ST-6 to the assessing authority: Provided that form ST-18A need not be furnished if the goods are goods of the clas....
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....sub-rule (1) above, on account of loss of such declaration(s), due to fire, flood or riots beyond his conduct and it is not possible to obtain the duplicate declaration forms, he may, by an order in writing, exempt such dealer from furnishing such declaration(s), subject to the conditions that the application is made within 45 days of such event supported by the evidence of loss of such declaration form: Provided that an application under the preceding proviso may be made up to December 31, 1989 in relation to riots occurring in Makarana Circle in March 1989. (1a) A dealer who claims concession from payment of tax on the sale of raw material to any notified industry under section 5CC or to any manufacturer under any notification issued under section 4(2) shall in respect of such sale obtain a declaration from the purchasing manufacturer in form 17A and shall, file such declaration before or at the time of assessment unless earlier required by the assessing authority and also submit a separate list of such sales in form ST-16: Provided that no declaration shall cover more than one transaction except where the total amount covered by one declaration does no....
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....ate shall be surrendered to the assessing authority. (5) No registered dealer to whom a declaration form is issued by the assessing authority shall either directly or through any other person transfer the same to any other person. (6) The State Government may, by notification, declare that forms of a particular series, design or colour shall be deemed as obsolete and invalid for use with effect from such date as may be specified in the notification. (7) A dealer who claims to have made such sales as are envisaged in sub-rule (1) or (1a) or (1b) to another dealer shall in respect of such claim, produce before the assessing authority the portion marked 'original' of the declaration received by him from the purchasing dealer. The assessing authority may in his discretion, or in case of loss of the original foil of the declaration may direct the selling dealer to produce for inspection or record the portion of the declaration marked 'duplicate'. (8) No purchasing dealer shall give, nor shall a selling dealer accept any declaration except in a form obtained by the purchasing dealer, on application from the assessing authority and not d....
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.... is, at the time of making the application, found to have failed to comply with an order demanding security from him under sub-section (7) of section 6, the assessing authority may reject the application; (c) If the applicant for declaration forms has at the time of making the application defaulted in payment of any outstanding demand or in paying tax according to sub-section (2A) of section 7 or in furnishing any return or returns together with the receipted challan or challans showing payment of the tax due from him according to such return or returns for the furnishing of which prescribed date or the extended date or dates, if any, have already expired, the assessing authority shall withhold the issue of declaration forms to him until such time as he:- (i) deposits the outstanding demand; (ia) pays tax according to sub-section (2A) of section 7 of the Act; (ii) furnishes such return or returns, together with such receipted challan or challans; and (iii) furnishes any other return or returns together with the receipted challan or challans showing payment of the tax due according to such return or returns for the furnishing of which the....
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.... carrier or of goods in movement shall,- (a) carry with him a goods vehicle record including 'challans' and 'bilties', bills of sale or despatch memos and prescribed declaration forms; (b) stop the vehicle or carrier at every check-post set up under sub-section (1); (c) produce all the documents including prescribed declaration forms relating to the goods before the in-charge of the check-post; (d) give all the information in his possession relating to the goods; and (e) allow the inspection of the goods by the in-charge of the check-post or any other person authorised by such in-charge. Explanation I.-For the purposes of this Chapter,- (i) 'vehicle or carrier' shall include any means of transportation including an animal to carry goods from one point to another point; (ii) 'goods' shall include animals also; and (iii) 'goods in movement' shall means,- (a) the goods which are in the possession or control of a trans- porting agency or person or other such bailee; (b) the goods which are being carried in a vehicle or carrier belonging to the owner....
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....tside the State, as may be notified by the State Government, of the value of Rs. 10,000 or more for use, consumption or disposal otherwise than by way of sale, shall furnish or cause to be furnished a declaration in form ST-18A, completely filled in all respect in ink. The counterfoil of the declaration shall be retained by such dealer and its portions marked 'original' and 'duplicate' shall be carried with the goods in movement and in case the goods are transported through railways, such portion shall be accompanied with the goods during their movement from railway premises to the place of business. (b) Any dealer or person other than a registered dealer,- (i) who imports any taxable goods as may be notified by the State Government; or (ii) who receives any goods as may be notified by the State Government, consigned to him from outside the State, or (iii) who intends to bring, import or otherwise receives any goods from outside the State, as may be notified by the State Government, of the value of Rs. 10,000 or more for use, consumption or disposal within the State; shall furnish or cause to be furnished a declaration in form ST-....
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.... with the duplicate portions of forms ST-18A to his assessing authority every quarter within thirty days from the close of the quarter. Explanation:-Quarter means the period of three months ending on 30th June, 30th September, 31st December or 31st March. (3)(a) Any dealer, or the person other than registered dealer as mentioned in clause (b) of sub-rule (1), shall obtain the form ST- 18AA on payment of fee of Rs. 10 per form, from the assessing authority having jurisdiction over the area where his principal place of business is situated or in case there is no such place, where he ordinarily resides. (b) The form ST-18AA, issued under clause (a) shall be valid for twenty-one days from the date of issue of the declaration form. If the form cannot be made use of within the said period of twenty-one days, the form shall be returned to the issuing authority within thirty days, from the date of issue of declaration form. (c) Such dealer or person shall submit a statement of import of goods along with the duplicate portion of form ST-18AA, and in case original portion of form ST-18AA has not been retained by any officer mentioned in sub-rule (1), it sh....
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....y quarter within thirty days from the close of the quarter. Explanation.-Quarter means the period of three months ending on 30th June, 30th September, 31st December and 31st March. (3) Where a dealer fails to furnish the statement as mentioned in sub-rule (2) above, the assessing authority after affording a reasonable opportunity of being heard, may impose penalty under section 68 of the Act. (4) The provisions of sub-rules (5), (6), (7), (8), (9), (10), (11), (12), (13), (14), (15), (16), (17), (18), (19) and (20) of rule 23 shall, in so far as may be, mutatis mutandis apply to declaration forms ST-18C. (5) Where form ST-18C is out of print or in short supply or otherwise not available in a zone, the Commissioner may issue such instructions as he deems proper in view of the circumstances of the case. After the existing form ST-5B and before form ST-6, the following form ST 5C shall be inserted." (c) Statement of Objects and Reasons for enacting Act No. 7 of 2002: "A. Amendment in the Rajasthan Sales Tax Act, 1994. A dealer applying for provisional and voluntary registration is required to make payment o....
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...., whichever is higher. The section is proposed to be amended suitably to encourage rightful appeals to be filed. Section 87 provides for power of revision to Commissioner in case an order passed by the subordinate authorities is erroneous as well as prejudicial to the interest of the Revenue. Both these conditions have to be satisfied for exercising these powers. Even in case of patently erroneous order passed by such authorities cannot be questioned except at the appellate forum, which may result in substantial delay in getting the grievances redressed. Therefore, by amending sub-section (1) of section 87 of the Act, it is proposed that the powers of revisions can be exercised on fulfilment of either of the above two conditions. As per present provisions of sub-section (2) of section 93 the Commissioner can ask for submission of specific information from dealers but not from other persons. For effective enforcement of the provisions of the Act, it is proposed to include words 'any person' in the aforesaid sub-section." (emphasis supplied) (d) Provisions of section 78(5) after its amendment by Act No. 7 of 2002: "Section 78. Esta....
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....section 78(2)(a) a penalty equal to 30 per cent of the value of such goods. If one reads sub-section (5) of section 78 in its entirety with rule 53 of the 1995 Rules, it is clear that penalty was liable to be imposed for importation of any taxable goods for sale without furnishing a declaration in form ST- 18A completely filled in all respects. The duty to fill and furnish the said form is imposed on the purchasing dealer. Therefore, section 78(5) as it stood prior to March 22, 2002 imposed penalty if possession or movement of goods took place, inter alia, in breach of section 78(2)(a) on "the person in charge", which included the owner. In this connection it may be noted that sub-section (5) comes after sub-section (4)(c) which talks about release of the goods to "the owner of the goods" on his giving adequate security. It is the owner (importer) who has to fill in the form ST-18A. It is the owner who is entitled to seek release under section 78(4) on giving security. It is the owner who is entitled to a hearing under section 78(5) and, therefore, the expression "person in charge of the goods" under section 78(5) would include the owner. Moreover, under section 78(2) the words use....