1 S.B. Sales Tax Revision Petition No. 94/2007 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR JUDGMENT S.B. Sales Tax Revision Petition No. 94/2007 Assistant Commercial Taxes Officer, Ward-I, Sikar Vs. M/s. Sohan Lal Babu Lal, Sujangarh. Date of Judgment: 26.10.2010 Hon'ble Mr. Narendra Kumar Jain,J. Mr. A. Kaushik On behalf of Mr. R.B. Mathur, for the petitioner. None present for the Non-petitioner. BY THE COURT: Heard learned counsel for the petitioner. 2. Assistant Commercial Taxes Officer, Ward-I, Sikar has preferred this revision petition under Section 86 of the Rajasthan Sales Tax Act, 1994(hereinafter referred to as 'the Act of 1994') challenging impugned judgment dated 17.04.2002 passed by Rajasthan Tax Board, Ajmer, in Appeal No. 1339/2001/Sikar whereby learned Tax Board while dismissing the appeal of the petitioner upheld the judgment dated 09.05.2001 passed by Deputy Commissioner (Appeals), Commercial Taxes Department, Bikaner whereby assessment order dated 15.11.1997 passed under Section 78(5) of the Act of 1994 levying 2 S.B. Sales Tax Revision Petition No. 94/2007 penalty to the tune of Rs. 23,389/- was set aside. 3. Briefly stated the facts of the case are that on 15.11.1997, vehicle No. RJ-19-G 7644 was checked at Devipura Check Post. The goods were being imported from Jaynagar, Bihar. Vehicle driver produced Bill No. A-15 and ST 18-A No. 382367 wherein material entries were blank. Assessing officer was of the view that since material entries were blank in Form ST 18-A, therefore, there is a violation of Rule 23(15) (16) and Section 78(5), therefore, he issued a notice to vehicle driver for 22.11.1997. 4. In response to notice, the dealer K.P. Jangid, appeared before assessing authority and submitted a written reply wherein it was contended that goods belong to his firm. He is doing the business of Mart only and there was no intention of evasion of tax. Sender firm of the goods did not fill the main/material entries in the Form ST 18-A. He had sent the blank form duly signed, therefore, his case be decided on that day itself. 5. Assessing officer considered reply of the dealer and came to a conclusion that as per Rule 23(15) and (16), Form ST 18-A should have been filled in compulsorily. The dealer has not given his cogent explanation for the same, 3 S.B. Sales Tax Revision Petition No. 94/2007 therefore, it is clear that the said form was kept blank with an object to evade the tax. Consequently, assessing authority vide assessment order dated 15.11.1997 levied the penalty of Rs. 23,389/- @ 30% on total value of goods i.e. Rs. 77,962/- and issued a demand notice. 6. Being aggrieved with the same, the assessee preferred an appeal which was allowed by Deputy Commissioner(Appeals) vide judgment dated 09.05.2001 and order of assessment was set aside. Thereafter, the petitioner preferred an appeal before Rajasthan Tax Board, but the same was dismissed vide judgment 17.04.2002, which is under challenge in this revision petition. 7. Learned counsel for the petitioner argued that Deputy Commissioner(Appeals) as well as Rajasthan Tax Board both committed an illegality in setting aside the penalty imposed by assessing authority under Section 78(5) of the Act of 1994 on the ground that there was no mens-rea on the part of the assessee in not filling the Form ST 18-A completely. He further contended that both the authorities below committed an illegality in observing that it was a duty of the Revenue to prove and establish the mens-rea for evasion of tax on the part of the dealer and since the mens-rea has not been 4 S.B. Sales Tax Revision Petition No. 94/2007 established, therefore, penalty levied by assessing authority was not in accordance with law. Learned counsel for the petitioner further contended that approach of learned authorities below was absolutely illegal and both the impugned judgments are liable to be set aside by this Court. 8. No one is present on behalf of the assesse/non-petitioner despite service of notice. However, I myself examined the findings recorded by Assessing Authority, Deputy Commissioner(Appeals) and Rajasthan Tax Board in the light of submissions made by learned counsel for the petitioner. 9. Assessing Officer in its assessment order has specifically mentioned that assessee in its reply admitted that he sent a blank form duly signed, but the same was not filled in by sender firm property and material entries remained blank in the same, but there was no intention of assessee to evade the tax. The fact that Form ST 18-A was incomplete and material particulars were not filled in the Form ST 18-A has not been disputed by Deputy Commissioner(Appeals) as well as Rajasthan Tax Board. Both the authorities below have observed that since there was no mens-rea for evasion of tax on the part of the assessee, therefore, 5 S.B. Sales Tax Revision Petition No. 94/2007 penalty is liable to be set aside. Deputy Commissioner(Appeals) in its order has observed as under: “अपीलाथȸ ने हःता¢रशुदा घोषणा पऽ िभजवा Ǒदया था तथा जो सूचनाएं पǐरवहन ूारàभ होने से पूव[ भरȣ जानी चाǑहए थी वे नहȣं भरȣ गई जो एक मामूली भूल कहȣ जा सकती है ǑकÛतु इससे करावचंन के सÛदभ[ मɅ åयवहारȣ का दोषी मनोभाव िसƮ नहȣं होता है।" 10. Rajasthan Tax Board dismissed the appeal of the petitioner. Para 7 of the order passed by Rajasthan Tax Board reads as under: “7. I have carefully considered the merits of the case and the arguments advanced by both the learned counsel. I have no hesitation in accepting the case of the respondent that the penalty imposed without establishing any mens-rea on the part of the assessee was not in accordance with law, as has been held in a number of cases earlier not only by the Board but by other Hon'ble Apex Courts as well.” 11. The above quoted portions of judgments of Deputy Commissioner(Appeals) as well as Rajasthan Tax Board would reveal that both the authorities have set aside the assessment order passed by assessing authority mainly on the ground that penalty has been imposed without establishing any mens-rea on the part of the assessee. 12. Hon'ble Apex Court in Guljag Industries Vs. Commercial Taxes Officer, reported in (2007) 7 Supreme Court Cases 269 considered the 6 S.B. Sales Tax Revision Petition No. 94/2007 provisions of Section 78(5) of the Act of 1994 and observed that material particulars like quality, weight and description of the goods required to be filled in by the assessee (consignee) were left blank, therefore, on the face of it there was contravention of Section 78 (2) of the Act of 1994. Hon'ble Apex Court further observed that Section 78(5) is the section enacted to provide remedy for loss of revenue and it is not enacted to punish the offender for committing economic offence and, therefore, mens-rea is not an essenstial ingredient for contravention of Section 78(2) of the Act of 1994. The breach of Section 78(2) would attract levying of penalty under Section 78(5) in cases where the goods in movement have travelled with incomplete Form ST 18-A. Para 20 and 35 of the Judgment(supra) are reproduced as under: “20. The facts enumerated above in Civil Appeal No. 5197 of 2005 is the lead case in which one finds that the goods in movement were carried with blank declaration forms though signed by the consignee. The material particulars like quality, weight and description of the goods required to be filled in by the assessee (consignee) were left blank. Therefore, in this batch of civil appeals we are concerned with cases where the goods in movement wre carried with blank Form ST 18-A. In our view, on the face of it there was 7 S.B. Sales Tax Revision Petition No. 94/2007 contravention of Section 78(2) of the RST Act, 1994. 35. For the aforestated reasons, we hold that Section 78(5) of the RST Act, 1994 [Section 22-A(7) of the RST Act, 1954] is the section enacted to provide remedy for loss of revenue and it is not enacted to punish the offender for committing economic offence and, therefore, mens rea is not an essential ingredient for contravention of Section 78(2) of the RST Act, 1994. That, the breach of Section 78(2) would attract the levy of penalty under Section 78(5) in cases where the goods in movement have travelled with an incomplete Form ST 18-A/18-C. We accordingly uphold the judgment of the High Court of Rajasthan in Sales Tax Revision No. 1023 of 2002 dated 14.10.2003(which is annexed as p.1 of the appeal paper book in Civil Appeal No. 5197 of 2005 filed by Guljag Industries v. CTO).” 13. The above quoted portions of judgments of Deputy Commissioner(Appeals) as well as Rajasthan Tax Board would show that their finding is apparently contrary to the judgment of the Hon'ble Apex Court delivered in Guljag Industries case(supra). Hon'ble Apex court has specifically held that mens-rea is not required to be proved for levying penalty under Section 78(5) of the Act of 1994, if there is a breach of Section 78(2) of the Act of 1994. 14. In these circumstances, the present case is fully covered by the judgment of Hon'ble Apex 8 S.B. Sales Tax Revision Petition No. 94/2007 Court delivered in Guljag Industries case (supra). 15. Consequently, this revision petition is allowed. Impugned judgment dated 17.04.2002 passed by Rajasthan Tax Board, Ajmer and Judgment dated 09.05.2001 passed by Deputy Commissioner(Appeals), Commercial Taxes Department, Bikaner are set aside and assssment order dated 15.11.1997 passed by Assistant Commercial Taxes Officer, Ward-I, Sikar is upheld. 16. Parties are directed to bear their own costs. (Narendra Kumar Jain),J. Manoj, Item No.10.