TaxTMI 
TaxTMI 
2014 (6) TMI 1095
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....me is transported to the site of the purchaser in special vehicles for delivery at site, which transportation is separately billed. The requirement of special vehicle is there, insofar as the ready mix concrete, if transported, as produced from the factory, would set and harden into a solid state, by the time it reaches the site. Hence, the transport has to be effected through a vehicle which has a 'transit mixer' and the RMC is continuously kept in a state of agitation within the said mixer, till delivery at the site, where the concreting is to be carried out. 2. The writ petitions impugn penalty orders, passed by the Intelligence Officer, Commercial Taxes, Ernakulam for the assessment years 2003-2004 and 2004-2005. The allegati....
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....nsideration, before this Court at this juncture. 5. One has to look at the penalty imposed on the proposal. What is clear is that the assessee had disclosed other income in its annual return, as also termed as expenditure the cost of supply as also the cost of production; in the Profit and Loss account. The Intelligence Officer conducted an enquiry with respect to the actual nature of the said expenditure and income. Evidently, books of accounts were called for from the assessee. It is from the books of accounts that the Intelligence Officer found the various heads, under which the aforementioned "other income", and other operating expenses were allegedly "misclassified". Hence, the allegation was that, certain amounts shown in the books....
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....d had in fact, evaded tax. The learned Government Pleader, places reliance on two decisions of the Hon'ble Supreme Court; 2006(5) SCC 361, Chairman, SEBI v. Shriram Mutual Fund and another, and Bharjatiya Steel Industries v. Commissioner, Sales Tax, Uttar Pradesh [2008(11) SCC 617] to contend that penalty is attracted as soon as there is contravention of statutory obligation. Hence the intention of the parties (mens rea); committing the violation becomes wholly irrelevant, argues the learned Government Pleader. To sustain the levy made on the freight charges, deeming it to be part of "sale price" the learned Government Pleader banks on (2010(9) SCC 423) India Meters Ltd. v State of Tamil Nadu. 8. India Meters(Supra) definitely found ....
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....tablishment of the violation. The decision, reiterated the principle that, mens rea is not an essential element for imposing penalty for breach of civil obligation or liabilities. When the violation of a statutory obligation is conclusively established for which penalty is levied, then the imposition of penalty, was held to be a sine qua non of the finding of violation. 11. Bharjatiya Steel Industries (supra) dealt with the penalty under the U.P Trade Tax Act, wherein a manufacturer, availed concessional rate, under a provision granting such benefit only on instances of purchase being effected for the purpose of manufacture. The manufacturer who purchased the scrap-iron, on an as-is-where-is, basis; sold the unusable variety to other dea....
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....ification is not possible, a maximum penalty of Rs.10,000/- alone is prescribed. Hence, there should necessarily be an evasion or at least an attempt to evade, which takes in a contumacious conduct of the dealer. Mens rea definitely is a sine qua non to such finding. Further more, there is no absolute mandate as to the quantum and the authority under Section 45 A has a discretion in mulcting a penalty, for which only the maximum is prescribed. This definitely is to be exercised with reference to the gravity of the offence; which has a direct bearing to the intention of the assessee. The discretion to award penalty up to a maximum provides for mitigation with reference to the facts, as to the real intent of the dealer. 13. 1980(1) SCC 71 ....
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.... even if the assessee raises a bona fide contention that a particular item is not liable to be taxable turnover, he would have to show it as forming part of the taxable turnover in his return and pay tax upon it on pain of being held liable for penalty in case his contention is ultimately found by the Court to be not acceptable. That surely could never have been intended by the Legislature." 14. In this context, apposite is the decision in Sree Krishna Electricals v. State of Tamil Nadu and another (2009)11 SCC 687; paragraph 7 of which is extracted below: "So far as the question of penalty is concerned the items which were not included in the turnover were found incorporated in the appellant's accounts books. Where certain ....