2018 (10) TMI 1246

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....ty as well as the Tribunal having recorded a finding that there was no intention to evade payment of tax; hence there is technical breach of provisions of section 28-A no payment can be imposed since there is no intention to evade tax in importing the goods into State ? (3) Whether on non production of Form-31 the applicant cannot be penalized in view of la laid down by this Hon'ble Court in the case of Hyderabad Industries Vs. CTT reported in 1996 UPTC 776 a s followed in Pepsico India Limited reported in 2003 UPTC 856. (4) Whether even if delivery is taken without getting Form-31 endorsed, penalty under section 15A(1)(o) of the Act cannot be levied on mere technicalities unless case of attempt to evade payment of tax is made out, as held by this Hon'ble Court in the case of M/s Modi Industries Limited and followed in M/s Wimco Ltd Bareilly and M/s Prag Ice and Oil Mills Limited 2004 NTN (Vol-25) 897 and the Tribunal was not justified in completely overlooking the said decision. The facts of the case, in brief, are that Telecom equipments were being transported by the revisionist-dealer which was registered under the Act 1948 from Jaipur to Lucknow vide vehicl....

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.... released on furnishing a surety of Rs. 900000.00 plus Rs. 154400.00 and bankguarantee of Rs. 2108800.00. The mobile squad sent the report dated 19.6.2007 for imposition of penalty to the office of the Deputy Commissioner-I, Trade Tax, Lucknow, whereupon a notice under section 15A(1)(o) of the Act 1948 was issued on prima facie satisfaction regarding violation of section 28-A of the Act 1948. In response thereto, the reply was submitted in the penalty proceedings by the revisionistdealer stating the same things i.e. all the requisite documents including the declaration-form duly filled were available with the goods and the driver, but were not produced by him inadvertently, which was merely a technical lapse, therefore, no penalty should be levied. Full cooperation was extended at the time of inspection by the mobile squad and all the relevant documents were produced before it. All the columns in the declaration-form had been duly filled. The documents had the requisite seal and signature of the Trade Tax Department of the State of Rajasthan including the bill, bilty etc. All the requisite documents for import of the goods had been provided, but the driver on account of the t....

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.... thereafter held that non-production of the declaration-form at the requisite centre entailed violation of section 28-A and that entry-tax was not deposited on the imported goods, therefore, in this situation the malintent to evade tax was implicit, therefore, even in view of the decisions cited imposition of penalty was justified. Thus, while the Deputy Commissioner recorded the finding that there was no malintent or mens rea involved, the Joint Commissioner on the appeal of the revisionist-dealer held otherwise. Thereafter the revisionist-dealer filed a second appeal before the U.P. Trade Tax Tribunal at Lucknow. The Tribunal affirmed the judgment of the Joint Commissioner for the same reason. The Tribunal did not accept the contention of the appellant-revisionist and held as under: The Tribunal also held that even though the contention of the appellant-revisionist that Entry Tax had no relation or connection with trade tax, yet it observed that the evasion of the two taxes was related to each other as if Entry Tax is evaded, then the trade tax gets naturally evaded. It also held that whether the goods which were being imported were for sale or not, would be determined a....

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....ommissioner of Sales Tax & ors. He also pointed out that the decision of the Division Bench in the case of Oriental Carbon Ltd. had been upheld by the Supreme Court, that too, after conversion of the Special Leave Petition filed by the Revenue into a Civil Appeal which was dismissed, therefore, now, the said judgment of the Supreme Court constitutes a binding precedent on the issue and was an affirmation of the decision by the Division Bench of this Court. Sri Rohit Nandan Shukla, learned counsel appearing for the State on the other hand relied upon a Single Judge Bench decision of this Court rendered in the case of Fag Precision (supra) to contend that this Court after considering various decisions of the Supreme Court had held that mens rea or malintent to evade tax was not a necessary requirement for imposition of penalty under section 15-A read with section 28-A of the Act 1948. He defended the impugned judgments based on the reasons mentioned therein. Section 15-A(1)(o) of the Act 1948 reads as under: "15-A. Penalties in certain cases.- (1) If the Assessing Authority is satisfied that any dealer or other person - (a) ......... (b) ......... ....

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....or any other person-in-charge of any vehicle carrying any such goods shall carry with him the copies of such declaration duly verified by the consignor in the prescribed manner together with such other documents as may be prescribed, and shall deliver one copy of such declaration,- (i) where such goods are brought by a road on which a check-post or barrier is established under Section 28, to the officer-in-charge of such check-post or barrier before crossing the check-post or barrier, and (ii) where such goods are brought by a road on which no such check-post or barrier is established, to the officer-in-charge of the nearest check-post or barrier established under the said section before transporting such goods further within the State; and the other copy of the declaration and the remaining documents alongwith the goods to the importer or his agent, (b) the officer-in-charge o the check-post or barrier shal grant a receipt for the copy of declaration delivered to him and it shall not be necessary for the driver or the person-in-charge of the vehicle to deliver any copy of the declaration at any other check-post or barrier that he may cross, if he shows s....

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....ing sub-section, and shall, if so required, give him name and address and the names and addresses of the owner of the vehicle and of the consignor and the consignee of the goods. (6) Where the officer making the search or inspection under this section finds any person transporting or attempting or abetting to transport any goods to which this section applies without being covered by the proper and genuine documents referred to in the preceding subsections and if, for reasons to be recorded, he is satisfied, after giving such person an opportunity of being heard, that such goods were being so transported in an attempt to evade assessment or payment of tax due or likely to be due under this Act, he may order detention of such goods. (7) The provisions of sub-sections (2), (6) and (8) of Section 13- A shall mutatis mutandis apply to such detention, as they apply to seizure under that section. (8) Nothing contained in this section shall be construed to impose any obligation on any railway administration or railway servant or the post office or any officer of the post office, or to empower any search, detention or seizure of any goods while on a railway as def....

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...., there was contravention of the provisions of section 28-A while importing or transporting the goods. The penalty referred under section 15-A is to be imposed after such inquiry, if any, as the Assessing Authority deems necessary. The question as to whether mens rea or malintent to evade tax is necessary for imposition of penalty under the aforesaid provisions, came up for consideration before a Division Bench of this Court in the case of M/s Oriental Carbon Ltd. (supra), wherein it was held that mere breach of provision of section 28-A would not be sufficient for imposition of penalty under section 15-A(1)(o) of the Act 1948, meaning thereby malintent i.e. the intent to evade tax was necessary for imposition of such penalty and the submission of the learned counsel for the revenue to the contrary was repelled. Against the said judgment the Revenue filed a special leave petition which was converted into Civil Appeal No.1548 of 1985 and the same was dismissed. Thus, the decision of the Division Bench of this Court stood affirmed by the Hon'ble Supreme Court. These decisions were not taken note of by the Single Judge Bench which decided the case of Fag Precision Ltd. (supra). As ....

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....f the above, especially the judgment of the Division Bench in M/s Oriental Carbon Ltd. (supra) which has been affirmed by the Supreme Court in appeal malintent or the intention to evade tax under the Act 1948 is essential for attracting a penalty under the aforesaid provisions. Furthermore, even otherwise, in the present case the record reveals that the Assessing Authority recorded a categorical finding that there was no malintent on the part of the revisionist to evade tax yet it imposed penalty on the ground that there was violation of section 28-A. The First Appellate Authority held that there was an intention to evade Entry Tax (not a tax under the Act 1948 under which the proceedings were being held). This conclusion was arrived at by the first Appellate Authority merely because the declaration form -31 which admittedly was duly filled and complete, could not be produced by the driver of the vehicle at the check-posts. The Tribunal affirmed the decision of the First Appellate Authority for the reasons already mentioned hereinabove, but while doing so it recorded contradictory findings as noticed earlier. Furthermore, this Court is of the view that the evasion of tax intende....

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....o evade Entry Tax the revisionist would be liable under the Entry Tax Act and not under the Act 1948. As this was the only reason given by the First Appellate Authority and the Tribunal, therefore, their judgments are not sustainable on this count. As regards the order of the Assessing Authority the same is not sustainable for the reason he arrived at the conclusion that there was no intent to evade tax yet imposed penalty merely on a technical contravention of section 28-A although he had recorded a specific finding that Form-31A was duly filled up and complete and the consignment was also accompanied by all other relevant documents. This Court is also of the view that once the Tribunal and other authorities have held that the consignment was accompanied by the requisite documents and Form-31A duly filled and complete then there was no question of misuse of the said form nor could there be any intent to evade tax under the Act 1948 as such reasoning given by the Tribunal in this regard is not sustainable on this count especially in view of plethora of decisions cited hereinabove where, in similar situations, similar conclusions have been arrived at. It is based on conjecture....

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