Rajasthan High Court - Jaipur
Mutha Premraj vs Asstt. Commercial Tax Officer And Ors. on 11 April, 2002
Equivalent citations: RLW2003(3)RAJ1428, 2002(5)WLN203
Author: B.S. Chauhan
Bench: B.S. Chauhan
JUDGMENT Chauhan, J.
1. The first revision petition has been filed under Sec. 86 of the Rajasthan Sales Tax Act, 1994 against the judgment and order of the Rajasthan Tax Board (for short, "the Board') dated 1.11.2000 (Annx.7), by which the Board has reversed the judgment and order of the Appellate Authority dated 18.11.96 (Annex.6) and upheld the order dated 23.9.95 (Annex.5) passed by the Assessing Authority, by which the penalty and been imposed under Section 22-A (7) of the Rajasthan Sales Tax Act, 1954 (for short, "The Act") for carrying the goods without the prescribed declaration Form ST 18-A as tequired under the Statute. The second revision petition (No. 937/2001) has been filed against the judgment and order dated 18.1.2001 (Annex.7) passed by the Board reversing the judgment and order of the Appellate Authority dated 24.8.96 (Annex.6) and upholding the order dated 20.9.94 (Annex.5) passed by the Assessing Authority imposing the penalty for carrying the goods with not correct particulars in the Bill.
2. Mr. Dinesh Mehta, learned counsel for the petitioner, has submitted that in both the cases, the facts are similar and only a pure question of law is involved and Revision Petition No. 343/2001 may be taken as a leading case for decision of both the cases.
3. The facts and circumstances giving rise to the said revision are that petitioner firm is a registered dealer under the Act, 1954 as well as under the Central Sales Tax Act and it carries the business in chemicals, such as Vax, Bronze, powder etc. On 3.8.95, vehicle No. RJ. 3T/3951 was intercepted near Jodhpur by the Sales Tax Authorities and on checking, it was found that M/s. Mayur Dyes Chemical Corporation, Rajkot (Gujarat) had sent goods for sale to the petitioner firm vide Bilty No. 27423 through M/s. Globe Transport Co. (P) Ltd. The said goods were not accompanied by declaration From ST. 18-A as required under the Act, 1994. The goods were seized and a show cause notice (annex.2) was served upon the petitioner firm to appear on 19.3.95 and show cause why penalty under Section 22-A(7) of the Act may not be imposed as the goods in question were not accompanied by Declaration From ST. 18-A. In response to the said show cause notice, a representative of petitioner firm appeared before the Authority and vide his statement dated 4.9.95 (Annex.3), admitted that the goods were not accompanied with the required Declaration From ST. 18-A. The Assessing Authority, after giving opportunity of hearing to petitioner firm, vide order dated 23.9.95 (Annex.5), imposed the penalty to the tune of 30% of the value of the goods amounting to Rs. 47,700/- under the provisions of Section 22-A (7) of the Act, 1954. Being aggrieved and dissatisfied, petitioner firm filed an appeal before the Deputy Commissioner (Appeals), Commercial Taxes, Jodhpur, which was allowed vide order dated 18.11.96 (Annex.6) on the ground that there was no guilty animus or intention to avoid tax on the part of the petitioner though, undoubtedly, the goods were not accompanied by the Declaration Form ST. 18-A. Being aggrieved and dissatisfied, the Revenue preferred an appeal before the Board, which has been allowed vide judgment and order dated 1.11.2000 (Annex.7) on the grounds that firstly mens rea was not attracted in the fact-situation of the case and secondly the plea taken by the petitioner-assessee that he had sent the required declaration Form ST. 18-A to the consignor firm in Gujarat and by confusion it could not be given to the transporter was false. Hence this revision.
4. There is no dispute to the settled legal proposition that the revisional power conferred under Section 86 of the Act upon this Court can be exercised only when the case involves a question of law, which means a case involving the construction of a Statute or document of title. A finding on a question of fact may also be open to attack as erroneous in law when there is no evidence to support it or it is perverse. Revisional power cannot be used as of Appellate Court and there is no scope of substituting the judgment of me Court below by its own judgment on appreciation of evidence. (Vide Shree Meenakshi Mills Ltd. v. Income tax Commissioner, AIR 1957 SC 49; Bhagirathi Agrawal & Bros. v. State of Orissa, 1974 (34) STC 84; and A.C.T.O. v. Ramesh Leather Store and Ors., 1982 (49) STC 79.
5. Mr. Mehtahas submitted that the case involves the following questions of law to be decided by this Court:-
"(1) Whether the admission on the part of the representative of petitioner firm to the extent of the fact that the goods were not accompanied with the Declaration From St. 18-A, would be sufficient to prove the existence of mens rea to avoid tax; and (2) Whether petitioner firm can be held liable for the negligence or irregularity committed by the transporter in not bringing the requisite Declaration From ST. 18-A?
6. Mr. Mehta has been fair enough in admitting that the goods were definitely not accompanied by the required Declaration Form ST. 18-A though it was accompanied with the Billy showing that the goods were "tax free" and he could not agitate the issue in revisional jurisdiction as to whether the finding of fact recorded by the learned Board that the plea taken by the petitioner- Assessee regarding sending the required declaration Form ST. 18-A in Gujarat and was not given to the transporter was false being a finding of fact. Thus, his submission remains limited only to the extent as to whether penalty can be imposed without recording the finding of fact that the petitioner intended to avoid tax as mens rea was suggested to be an essential ingredient for imposing the penalty. As there is no dispute that the goods were accompanied with a Bilty showing the same as "tax free" and declaration form ST. 18-A was not there, and petitioner was bound by the statement made by its representative, the Court is left only to decide: whether for imposing penalty under Section 22-A (7), mens rea was an essential ingredient and as to whether mens rea was established on the part of the assessee.
7. Mr. Mehta has submitted that the penalty, being penal in nature, cannot be imposed unless means rea is established and be imposed unless mens rea is established and by adducing sufficient evidence it is proved by the Revenue that there was an intent on the part of the assessee to evade tax and as the assessee had sent the required declaration Form ST 10-A to the consignor, such an intention could not be established.
8. On the contrary, Mr. Manoj bhandari, learned counsel for the Revenue, has submitted that as the learned Tribunal has recorded the finding of fact in respect of not sending the required Form St. 18-A to the consignor firm in Gujarat, there was not option left to the Assessing Authority except to impose the penalty and in such a case, means rea was not attracted for the reason that the Declaration Form ST. 18-A was a mandatory requirement under the Act and was to be produced before the Assessing Authority in original. As the Board has clearly recorded the finding that there was no evidence on record to show that the transport company had written the number on the Billy on the basis of the Declaration Form submitted to it by the consignor and no explanation could be furnished by the assessee as to why the number of the Form ST. 18-A was written after preparation of the bilty, by whom the same was written and why the same had been deleted and scraped. Even if the Form could not be given to the transporter to keep it with the vehicle, it could have been brought at to subsequent stage but no such attempt was made. Imposition of penalty was justified as petitioner was found guilty of committing breach of a mandatory provision contained under Section 22-A(3) of the Act, 1954.
9. I have considered the rival submissions made by the learned counsel for the parties and perused the record of the case.
10. The issue involved herein is no more res-integra and has been considered by the Court time and again.
11. In the Divisional Personnel Officer, Southern Railway and Anr. v. T.R. Challappan, AIR 1975 SC 2216, the Hon'ble Supreme Court considered the meaning of "penalty" in departmental proceedings against the employees. As the argument had been advanced that the expression "penalty" referred to in Rule 14 of the Railway Servants (Discipline and Appeal) Rules 1968, which provided for imposition of penalty of dismissal or removal in respect of a railway servant, stood confirmed by the Court holding as under:-
"The word 'penalty' imposed on a railway servant, in our opinion, does not refer to a sentence awarded by the Court to the accused on his conviction, but though not happily worded it merely indicates the nature of the penalty imposable by the disciplinary authority if the delinquent employee has been found guilty of conduct which has led to his conviction on a criminal charge ...... The words "where any penalty is imposed' in Rule 14 (i) should actually be read as 'where any penalty is imposable' because so far as the disciplinary authority is concerned it cannot impose a penalty on the basis of the conviction and sentence passed against the delinquent employee by a competent court. Furthermore, the rule empowering the disciplinary authority to consider circumstances of the case and make such orders as it deems fit clearly indicates that it is open to the disciplinary authority to impose any penalty as it likes. In this sense, therefore, the word 'penalty' used in Rule 14 (i) of the Rules of 1968 is relatable to the penalties to be imposed under the Rules rather than a penalty given by a criminal court."
12. In N.K. Jain and Ors. v. C.K. Shaw and Ors., AIR 1991 SC 1289, the Supreme Court considered the nature of expression "penalty" used in Section 14(2A) of the Provident Fund and Miscellaneous Provisions Act, 1952, wherein it considered the definition of the Word "penalty" in different dictionaries, as under:-
"In Butterworths "Words and Phrases, ....... the meaning of word 'penalty' is large enough to mean, is intended to mean and does mean, is intended to mean, and does mean, any punishment whether by imprisonment or otherwise.... Penalty in a broad sense may be defined as any suffering in person or property by way of forfeiture, deprivation or disability, imposed as a punishment by law or judicial authority in respect of... an act prohibited by statute. The Oxford Dictionary echoes the same wide conception by referring to 'a loss, disability or disadvantage of some kind.... fixed by law for some offence.' The meaning of the word 'penalty' as given in the Collins English Dictionary such as a term of imprisonment, some other form of punishment, such as a fine or forfeit for not fulfilling a contract, loss, suffering, or other unfortunate result of one's own action, error etc., Sport, games etc. a handicap awarded against a player or term for illegal play, such as a free shot at goal by the opposing team, loss of point, etc."
........A penalty may refer to both criminal and civil liability, being denied as penal retribution, punishment for crime of offence, the suffering in person, rights or property which is annexed by law of judicial decision to commission of a crime or public offence. The term 'penalty' embraces all consequences visited by law on heads of those who violate police regulations and extends to all penalties whether eligible by State in interest of community or by private persons in their won interest, even when statute is remedial as well as penal.
The word 'penalty' is not confined to punishment or crime; it has a broader meaning in law of contracts; it is used as contradistinguished from liquidated damages. It is also used to indicate the sum to be forfeited on breach of a bond, and in common parlance it expresses any disadvantage resulting from an act."
13. And held that in view of the definition it was not possible to hold that the said provisions were not applicable in case of exempted establishments for the reason that some more provisions, legal or penal, were also made applicable to exempted establishments with a view to make to penal provisions more stringent with a view to check the growth of arrears.
14. In Director of Enforcement v. MCTM Corporation Pvt. Ltd. and Ors., AIR 1996 SC 1100, the Hon'ble Supreme Court considered as issue as to whether ingredients of mens rea was necessary in case of a person who is found violating the provisions of the Foreign Exchange Regulations Act, 1947. The Court observed as under:-
"Mens rea' is a state of mind. Under the criminal law, mens rea is considered as the 'guilty intention' and unless it is found that the 'accused' had the guilty intention to commit the 'crime', he cannot be held 'guilty' of committing the crime. An 'offence' under Criminal Procedure Code and the General Clauses Act, 1897 is defined as 'any act or omission 'made punishable by any law for the time being in force.' The proceedings under Section 23(1) (a) FERA, 1947 are 'adjudicatory' in nature and character and are not 'criminal proceedings.' The officers of the Enforcement Directorate and other administrative authorities are expressly empowered by the Act to 'adjudicate' only. Indeed they have to act 'judicially' and follow the rules of natural justice to the extent applicable but, they are not 'Judges' of the 'Criminal Courts' trying an 'accused' for commission of a an offence, as understood in the general context. They perform quasi-judicial functions and do not act a 'Courts' but only as 'administrators' and 'adjudicators.' In the proceedings before them, they do not try 'an accused' for commission of 'any crime' (not merely an offence) but determine the liability of the conlravenor for the breach of his 'obligations' imposed under the Act. They imposed 'penalty' for the breach of the 'Civil obligations' laid down under the Act and not impose any 'sentence' for the commission of an offence. The expression 'penalty' is a word of wide significance. Sometime, it means recovery of an amount as a penal measure even in civil proceedings. An exaction which is not compensator in character is also termed as 'penalty'. When penalty is imposed by an adjudicating officer, it is done so in 'adjudicatory proceedings;' and not by way of fine as a result of 'prosecution' of an 'accused' for commission of an 'accused' for commission of an 'offence' in a criminal Court. Therefore, merely because penalty clause exists in Section 23 (1) (a), the nature of the proceedings under the Section is not changed from 'adjudicator' to 'criminal' prosecution. An order made by an adjudicating authority under the Act is not that of conviction but of determination of the breach of the civil obligation by the offender. .......A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is for different from the penalty for a crime or a fine of forfeiture provided as punishment for the violation of criminal laws. We are in agreement with the aforesaid view and in our opinion, what applies to 'tax delinquency' equally holds good for the 'blameworthy' conduct for contravention of the provisions of FERA, 1947. We, therefore, hold that mens-rea (as understood in criminal law) is not an essential ingredient for holding a delinquent liable to pay penalty under Section 23(1) of FERA 1947 for contravention of the provisions of Section 10 of FERA, 1947 and that penalty is attracted under Section 23 (1)(a) as soon as contravention of the statutory obligation contemplated by Section 10(1) (a) is established. The High Court apparently fell in error in treating the 'blameworthy conduct' under the Act as equivalent to the commission of a 'criminal offence', overlooking the position that the 'blameworthy conduct' in the adjudicatory proceedings is established by proof only of the breach of a Civil obligation under the Act, for which the defaulter is obliged to make amends by payment of the penalty imposed under Section 23 (1)(a) of the Act irrespective of the fact whether he committed the breach with or without any guilty intention. Our answer to the first question formulated by us above is, therefore in the negative."
15. In Commissioner of Sales Tax v. Rama and Sons, General Merchant, Ballia, 1999 UPTC 25, the Allahabad High Court observed as under:-
"The principle of mens rea comes from English Criminal Law from times when the law was not codified. It was said that actus non facit reum nisi mens sit rea (the intent and act must both concur to constitute the crime). But this principle has lost much of its significance owing to greater precision of modern statutes. The nature of intent or the ingredients of offences are now clearly stated in the statutes and nothing further is required to establish as offence then what the statute specified. We have words like 'voluntarily', 'intentionally', 'negligetly', 'knowingly', fraudulently', 'dishonestly', 'rashly', 'omits', 'without lawful authority' ect., 'omits', 'without lawful authority' ect., used in various sections of the Indian Penal Code defining various offence. Proof of the State of mind or of the conduct of the person as indicated by the aforesaid word establishes the offence and no further guilty intent or mens rea need be proved. In fact there are many acts which are offences and do not require proof any mens rea or guilty intention, for example possession of illicit fire arm."
16. A Full Bench of Andhra Pradesh High Court, in Additional, Commissioner, Income Tax v. Durga Pandari Nath Tulijayya & Co., 1977 Tax LR 258, observed as under:-
"The doctrine of mens rea is of common law origin developed by Judge-made law. It has no place in the Legislator's law. It has no place in the Legislator's law where offences are defined with sufficient accuracy.... Mens rea is an essential ingredient of an offence. However, it is a rule of construction. If there is a conflict between the common law and the statutory law, it has always been held that it is a sound rule to construe a statute in conformity with the common law. But it cannot be postulated that statute cannot alter the course of the common law. The parliament, in exercise of its constitutional powers makes statutes and in exercise of those powers it can affirm, alter or take away the common law altogether. Therefore, if it is plain from the statute that it intends to alter the course of the common law, then the plaint meaning should be accepted. The existence of mens rea as an essential ingredient of an offence has to be made out by the construction of the statute."
17. While deciding the said case, the Full Court placed reliance upon a judgment by Wright, J. in Sherras v. De Ruten, 1985-1 QB 918, wherein it was observed as under:-
"There is a presumption that mens rea, an evil intention or a knowledge of the wrongfulness of the act, is an essential ingredient in every offence, but that presumption is liable to be displaced either by the words of the statute creating the offence or by the subject matter with which it deals, and both must be considered....... In order to find out whether mens rea i.e. a guilty mind is an ingredient or not, reference has to be made to the language of the enactment, the object and subject matter of the statute and the nature and character of the Act sought to sought to be punished."
18. The Hon'ble Supreme Court in Gujarat Travancore agency v. Commissioner of Income Tax, AIR 1989 SC 1971, wherein the Court considered the provision of Section 271(1)(a) of the Income Tax Act and held that the element of mens rea is not involved because the penalty imposed in civil matters is always of a civil nature and it is misnomer to treat such proceedings as quasi-criminal merely because penalty is imposed, and observed as under:-
"In most cases of criminal liability, the intention of legislature is that penalty should serve as a deterrent. The creation of an offence by the statute proceeds with a presumption that society suffers injury by the act or omission of defaulter and that a deterrent sentence must be imposed to discourage the repetition of the offence. In a case of proceedings under Section 271(1)(a), however, it seems that the intention of the legislature is to emphasis the fact of loss of revenue and to provide a remedy for such loss, although, no doubt, an element of coercion is present in the penalty. In this connection, the term in which penalty falls to be measured, is significant. Unless there is something in the nature of statute indication the need to establish the element of mens rea, it is generally sufficient to prove that a default in complying with the statute has occurred. In our opinion, there is nothing in Section 271(1)(a) which requires that mens rea must be proved before penalty can be levied under that provisions..... Accordingly, we hold that the element of mens rea was not required to be proved in the proceedings taken by the Income Tax Officer under Section 271(1)(a) of the Income Tax Act against the assessee."
19. A Constitution Bench of the Hon'ble Supreme Court in Jain Bros. and Ors. v. The Union of India and Ors., AIR 1970 SC 778, while examining a case of imposing the penalty under the Income Tax Act, held that penalty was merely an additional tax being a civil liability under the Tax Statute, and observed as under:-
"Although penalty has been regarded as an additional lax in a certain sense and for certain purpose, it is not possible to hold that penalty proceedings are judicial and essentially a continuation of the proceedings relating to assessment where a return has been filed."
20. In Commissioner of Income Tax v. Kalyan Das Rastogi, 1993 (Suppl) 1 SCC 663, the Hon'ble Supreme Court placed reliance upon, approved and followed the judgment in Gujarat-Travancore Agency (supra) and reiterated the same view.
21. In Commissioner of Income Tax, Gujarat v. I.M. Patel & Co., 1993 (Suppl) (1) SCC 621, the Hon'ble Supreme Court considered a large number of its earlier judgments, including Gujarat Travancore Agency (supra) and Kalyan Das Rastogi (supra) and categorically held that in a lax liability, the plea of mens rea cannot be taken.
22. In Income Tax Commissioner, Andhra Pradesh, Hyderabad v. Bhikaji Dadabhai & Co., AIR 1961 SC 1265, the Apex Court held that penalty is an additional tax imposed upon a person in view of his dishonesty or contumacious conduct.
23. In Corpus Juris Secundum, 85 580, it has been stated as under:-
"A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is far different from the penalty for a crime of a fine or forfeiture provided as punishment for the violation of criminal or penal laws."
24. In M/s. Hindustan Steel Ltd. v. The State of Orissa, AIR 1970 SC 253, the Hon'ble Supreme Court considered the provisions of the Orissa Sales Tax act, 1947, particularly the provisions relating to imposition of penalty imposed for default in registering as a dealer under Section 9(1) read with Section 25(1)(a) of the said Act, and held as under:-
"But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An Order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the Company in failing to register the Company as a dealer acted in the honest and genuine belief that the Company was not a dealer. Granting that they erred, no case for imposing penalty was made out."
25. Following the aforesaid provisions, while interpreting the provisions of the Madhya Pradesh General Sales Tax Act, 1959, the Hon'ble Supreme Court, in the Cement Marketing Co. of India Ltd. v. The Asstt. Commissioner of Sales Tax, Indora and Ors., AIR 1980 SC 346, held that imposition of penalty is penal in character and unless the filing of an inaccurate return is accompanied by a guilty mind, the Section cannot be invoked for imposing penalty. If the contrary view is taken, the result would be that even if the assessee raises a bonafide contention that a particular item is not liable to be included in the 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.
26. In Om Prakash Sheo Prakash and Ors. etc. etc. v. Union of India Anr., AIR 1984 SC 1194, the Hon'ble Supreme Court considered the provisions of the Amending Sales Tax Act, made applicable retrospectively imposing the penalty also, and examined its validity on the touch-stone of provisions of Article 19(1)(f) & (g) and Article 21 of the Constitution of India, as Article 21 of the Constitution of India, as Article 20 of the Constitution guarantees the protection in respect of conviction for the offence under any law for the time-being in force unless the other conditions provided therein are complied with. The Hon'ble Apex Court considered a large number of its earlier judgments, including the meaning and definition of "penalty" and reached the conclusion that "a penalty imposed by the Sales Tax Authority is only a civil liability, though penal in nature, and it can be imposed provided the default committed by the dealer is established at an inquiry after giving the dealer concerned an opportunity of being heard. Moreso, the degree of remissness involved in the default is a relevant factor to be taken into account while levying penalty. As the Act provides both the minimum and the maximum amount of penalty leviable and it is corelated to the amount of tax which would have have been avoided if the turnover returned by such dealer had been accepted as correct. The order levying penalty is quasi-judicial in character and involves exercise of judicial discretion.
27. A Constitution Bench of the Hon'ble Supreme Court, in Khemka and Co. (Agencies) Pvt. Ltd. v. State of Maharashtra, AIR 1975 SC 1549, considered the provisions of the Central Sales Tax act, 1956 in a case of default in payment of tax in respect of Central Act within the prescribed time, and held as under:-
"Penalty is not merely sanction. It is not merely adjunct to assessment. It is not merely consequential to assessment. It is not merely machinery. Penalty is in addition to tax and is a liability under the Act."
28. The Constitution Bench of the Supreme Court in Maqbool Hussain v. State of Bombay, AIR 1953 SC 325, considering the nature of proceedings under the Sea Customs Act and FERA, 1947, dealing with the principle and scope underlying in Article 20(2) of the its Constitution of India, held as under: -
"The Sea Custom Authorities were not a judicial tribunal and the adjudging of confiscation, increased rate of duty or penalty under the provisions of the Sea Customs Act did not constitute a judgment or order of a Court of judicial tribunal necessary for the purpose of supporting a plea of double jeopardy."
29. A Seven Judges Bench of the Hon'ble Supreme Court, in R.S. Joshi etc. v. Ajit Mills Ltd. and Anr. etc., AIR 1977 SC 2279, considered the scope of mens-rea while interpreting the provisions of Bombay Sales Tax Act, 1959, and also considered various facets of the expression 'penalty'. The Court observed as under; -
"There was a contention that the expression 'forfeiture' did not denote a penalty. Thus, perhaps, may have to be decided in the specific setting of a statute. But speaking generally, and having in mind the object of Section 37 read with Section 46, we are inclined to the view that forfeiture has a punitive impact. Black's legal Dictionary states that 'to forfeit' is 'to lose, or lose the right to, by some error, fault, offence or crime, 'to incur a penalty.' 'Forfeiture', as judically annotted, is 'a punishment annexed by law to some illegal act or negligence....', something imposed as a punishment for an offence of delinquency. The word, in this sense, is frequently associated with the word "penalty." According to Black's Legal Dictionary, 'the terms 'fine', 'forfeiture' and 'penalty' are often used loosely, and even confusedly, but when a discrimination is made, the word 'penalty' is found to be generic in its character, including both fine and forfeiture. A 'fine' is a pecuniary penalty, and is commonly (perhaps always) to be collected by suit in some form. A 'forfeiture' is a penalty by which one loses his rights and interest in his property."
.......The word 'forfeiture' must bear the same meaning of a penalty for breach of a prohibitory direction. The fact that there is arithmetical identity, assuming it to be so, between the figures of the illegal collections made by the dealers and the amounts forfeited to the State cannot create a conceptual confusion that what is provided is not punishment but a transference of funds. If this view be correct, and we hold so the legislature, by inflicting the forfeiture, does not go outside the crease when it hits out against the dealer and deprives him, by the penalty of the law, of the amount illegally gathered from the customers. The Criminal Procedure Code, Customs and Excise Laws and several other penal statutes in India have used diction, which accepts forfeiture as a kind of penalty. When discussing the relings of this Court we will explore whether this true nature of 'forfeiture' is contradicted by anything we can find in Section 37(1), 46 or 63. Even here we may reject the notion that a penalty or a punishment cannot be cast in the form of an absolute or no fault liability but must be proceeded by mens rea. The classical view that 'no mens rea, no crime' has long ago been eroded and several laws in India, and abroad, especially regarding economic crimes and departmental penalties, have created severe punishments even where the offences have been defined to exclude mens rea. Therefore, the contention that Section 37(1) fastens a heavy liability regardless of fault has no force in depriving the forfeiture of the character of penalty."
30. In State of Rajasthan v. D.P. Metals, AIR 2001 SC 3076, the Hon'ble Supreme Court considered the validity of the provisions of Section 78 (5) of the Rajasthan Sales Tax Act, 1994, which provides for imposing the penalty if the goods being carried in a vehicle are being found without documents required under the Act and the Rules framed thereunder, or the documents are found to be false or forged. The Court held as under:-
"Person Incharge of the goods should have all the requisite documents relating to the title or sale of the goods, which are being transported. Penalty under Section 78 (5) is leviable under two circumstances: firstly, if there is non-compliance with Section 78(2)(a), i.e. not earring the documents mentioned in that clause; and secondly, if false or forged documents or declaration is submitted. This Sub-section cannot relate to personal belongings which are not meant for sale but would relate to those types of goods, in respect of which documents referred to in Section 78 (2)(a) exist or can exist. Such submission of false or forged documents or declaration at any check post or even thereafter can safely be presumed to have been motivated by desire to mislead the Authorities. Hiding the truth and tender falsehood would per se, so existence of mens-rea even if required.
Similarly, where despite opportunity having been granted under Section 78(5), if the requisite documents referred to in Clause (a) of Sub-section (2) are not produced, even though the same are existing, would clearly prove the guilty intent. It is not possible to agree with the learned counsel for respondents that the breach referred to in Section 78(5) can be regarded as technical or venial. Once the ingredients of Section 78(5) are established after giving a hearing and complying with the principles of natural justice, there is no discretion not to levy or levy lesser amount of penalty."
31. In Bengal Iron Merchant Association and Anr. v. Commissioner, Commercial Tax and Anr., 1996(7) SCC 537, the Hon'ble Supreme Court examined the provisions of Rule 89-A (2) of the Bengal Sales Tax Rules, 1941-analogous provision providing for requirement of declaration Form like ST.18-A in the instant case, and held that the said provisions of Rule 89-A (2) of the said Rules, 1941 required that any consignment of notified goods shall be accompanied by a declaration by the consignor or his authorised agent in relation to the consignment or to comply with them. The rule squarely placed an obligation upon the consignor/vendor to issue such a declaration and the consignee/purchasers to carry the declaration. The consignees were not entitled to complain that because iron and steel were taxable only at the first point of sale, the sellers (manufacturers) were not issuing the declaration as contemplated by Rule 89-A(2) and they were, therefore, not in a position to produce the declaration when demanded by the authorities, in case of failure to produce the said declaration form, they were liable to pay the penalty, as per the said Rules, 1941.
32. In Kishori Lal Rakesh Kumar Mandi v. Commissioner of Sales Tax, 1985 UPTC 211, a Division Bench of the Allahabad High Court, while deciding a reference on interpretation of Section 15-A(a)(g) of the Uttar Pradesh Sales Tax Act, 1948, which referred to renewal of registration and for default, whether penalty can be imposed without proving mens rea, expressed the view the mens rea is not necessary for imposing penalty for default covered by Clause (g), observing as under: -
"....though mens rea is a necessary ingredient of an offence but the Legislature can free any provision relating to an offence in a statute from this fetter. Clause(g) is free from the bonodage of mens rea."
33. In Sai Electricals (P) Ltd. v. Commissioner of Sales Tax, 1997 UPTC 721, while dealing with the provisions of Section 4-B of the U.P. Trade Tax, 1948, the Allahabad High Court observed that mens rea is not intended by the legislature for imposing the penalty, and held as under:-
"A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws."
34. In M/s. Rama and Sons, General Merchant, Ballia (supra), the Allahabad High Court, while dealing with the provisions of Section 10-A of Central Sales Tax Act, 1956, observed that penalty is leviable if a person being a registered dealer, falsely represents when purchasing any class of goods that goods of such class are covered by his certificate of registration, and held as under: -
"The statements made by the dealers were, therefore, untrue but the penalty has been quashed on the ground that there was no mens rea in making the wrong averments in Form C."
35. The Court further came to the conclusion that the word 'falsification' might have slightly different interpretation if the criminal prosecution was launched, but it was a case of penalty, which was levied to compensate the Revenue and to cause the delinquent to comply with the law; therefore, mens rea was not at all attracted in the case.
36. The Division Bench of the Madras High Court in Vijaya Electricals v. State of Tamil Nadu, 1991 82 STC 268, while interpreting the analogous provisions of Section 10-A read with Section 10(b) of the Act, held that mens rea need not be established and if representation is found to be false, it is sufficient to levy the penalty.
37. Similar view was reiterated by the Division Bench of the Madhya Pradesh High Court in Central India Motors v. C.L. Sharma, Assistant Commissioner of Sales Tax, Indore Region, Indore and Anr., 1980 46 STC.
38. In State of Madhya Pradesh v. Narain Singh and Ors., 1983 (3) SCC 596, the Hon'ble Supreme Court considered as case where two trucks carrying fertilizers were intercepted by the Madhya Pradesh Authorities under the Essential Commodities Act and the accused did not deny the transport of fertilizer bags or interception of its lorries or seizure of fertilizer bags and the only defence taken therein was than they were not aware of the contents of the documents seized from them and they were not engaged in exporting the fertilizer bags from Madhya Pradesh to Maharashtra in conscious violation of provisions of the Fertilizer Movement Control Order, 1973 read with Sections 3 and 7 of the Essential Commodities Act, 1955. The Hon'ble Supreme Court, reversing the order of acquittal, held that mens rea was not at all attracted as the provisions of Section 7(1) of the Essential Commodities act required to be interpreted in true perspective and it provided tat if any person contravenes, whether knowingly, intentionally or otherwise any order made under Section 3, he will be punished under the F.M.C.O. The Court held that the element of mens rea in export of fertilizer bags without a valid permit was, therefore, not a necessary ingredient for convicting person for contravention of the order made under Section 3 of the F.M.C.O. if the factum of export or attempt to export is proved by the evidence adduced. This judgment is an authority to show that mens rea may be an essential ingredient in a case of offence for punishing a person, but legislature is competent to provide for punishment including the imprisonment even in a criminal case, excluding the scope or attraction of mens rea.
39. In C.A. Abrahim v. Income Tax Officer, AIR 1961 SC 609, the Apex Court laid down the guidelines in interpreting the provisions of Fiscal Statutes, observing as under:-
"In interpreting a fiscal statute, the Court cannot proceed to make good the deficiency, if there be any; the Court must interpret the Statute as it stands and in case of doubt, in a manner favourable to the tax-paper. But whereas in the present case, by use of the words 'capable of comprehensive import, provision is made for imposing liability for penalty upon tax- paper guilty of fraud, gross negligence orm contumacious conduct, a assumption that the words were used in a restricted sense so as to defeat the avade object of the legislature qua and certain clauses will not be lightly met."
40. Similar view has been reiterated in M/s. Bhikaji Dadabhai & Co. (supra),.
41. Similarly, in Commissioner of Sales Tax v. Parson Tools & Plants, AIR 1975 SC 1039, the Apex Court observed as under: -
"Where the legislature clearly declares its intent in the scheme and language of a statute, it is the duty of the Court to give effect to the same without scanning its wisdom or policy, and without engrafting, adding or implying anything which is not congenial to or consistent with such expressed intent of the law-giver; more so if the statute is a taxing statute."
42. Relevant provisions of Section 22-A of the Act reads as under:-
"(3) The owner or person in charge of a vehicle, boat or animal shall carry with him a goods vehicle record, trip sheet or a log book, as the case may be, and (such other documents) 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 the 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 r 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 incharge of the check post or barrier or any other officer not below the rank of an Assistant Commercial Taxes Officer, empowered in this behalf may, after giving the owner or person incharge of the goods reasonable opportunity of being heard and after holding such further enquiry as he may deem fit, impose on him for possession of goods not covered by goods vehicle record, any other documents prescribed under Sub-section (3) or for sub mission of false declaration or documents, a penalty equal to five times of the rate of tax notified under Section 5 of the Act, for such goods or 30% of the value of such goods, as may be determined by such officer which ever is less.
Provided that where the goods are being carried without proper documents as required by Sub-section (3) or with any false declaration or statements and the owner or the incharge or the driver of the vehicle, boat or animal carrying such goods is found in collusion for such carrying of goods, the vehicle boat or animal shall also be seized by the officer empowered under Sub-section (7) and such officer, after affording an opportunity of being heard to such owner, incharge or driver may impose a penalty not exceeding 30% of the value of the goods being carried and shall release the vehicle, boat or animal on the payment of the said penalty, or on furnishing such security in such form as prescribed under Clause (b) of Sub-section (7). ..............."
43. Thus, for imposing the penalty, the breach of the statutory provision is enough. In case the goods are not accompanied with the required declaration, the issue as to whether declaration is false or true, does not arise. The judgment in Hindustan Steel (supra) stands on an entirely different footing and the facts thereof are quite distinguishable. The said judgment does not have universal application, but may be made applicable only for dealing with the similar situation. In the said case, the provisions of Section 25(1) (a) read with Section 9(1) (a) of the Act were interpreted which provided for a different situation, i.e. for imposition of penalty, mens rea was found to be necessary ingredient in case declaration was found to be false. Similarly, in case of Cement Marketing Co. Ltd. (supra), the Hon'ble Supreme Court considered the provisions providing for penalty, i.e. Section 43 of the Madhya Pradesh General Sales Tax Act, 1958, which required that the assessee should have filed a false return and, therefore, mens rea was necessary ingredient thereof.
44. In Mahaveer Conductors v. Assistant Commercial Taxes Officer, 1997 (104) STC 65, this Court has interpreted the provisions of Section 22-A(7) holding that mens rea was a necessary ingredient, observing as under: -
"....Any order imposing penalty for failure to carry out statutory obligation is quasi-criminal in nature. The Statute has not provided any presumption about the existence of mens rea against the defaulter, therefore, as a prosecutor, burden of proving is primarily on the Revenue. The Revenue has failed to discharge its burden inasmuch as it has merely reached a presumption of such deliberate breach....."
45. Similar view has been reiterated in Assistant Commercial Tax Officer, Flying Squade v. Voltas Ltd., 2000 (120) STC 270. While deciding the said case, reliance has been placed upon the earlier judgments in Mahaveer Conductors (supra) and Hindustan Steel Ltd. (supra).
46. While deciding the case in Mahaveer Conductors (supra), any of the judgments of the Apex Court referred to above including the Seven Judges judgment in R.S. Joshi (supra), wherein the scope of applicability of mens rea in fiscal statute and even other statutes had been examined and explained, could not be brought to the notice of the Court. The Court had taken note of Hindustan Steel Ltd. only, therefore, it can be safely inferred that taking the view that whenever a provision provides for imposition of penalty, the proceedings become quasi-criminal in nature, is per incurium and no such principle of universal application can be laid down. One of the appropriate way could have been to refer the matter to a Larger Bench doubting the correctness of the said judgments in Mahaveer Conductors (supra) and Voltas Ltd. (supra), but as the Hon'ble Apex Court, in a large number of its judgments, dealing with various subjects, including Foreign Exchange Regulation Act, Customs act, Essential Commodities act, Income Tax Act, General Sales Tax Acts of the States and Central Sales Tax Act, has elaborately held that the proceedings are not criminal or quasi-criminal in nature nor the penalty imposed under these statutes can be held to be penal in its strict legal sense as understood in criminal jurisdiction and penalty so imposed remains merely an additional tax to be paid by the assessee for breach of a statutory provision or his contumacious conduct because Section 22-A(7) does not deal with a case of merely furnishing a false declaration. There may be, like instant, cases of no declaration at all.
47. Reference to the Larger Bench is also not required because of the view taken by the Division Bench of this Court in Lalji Moolji Transport Company v. State of Rajasthan, DBCWP No. 324/2002. Lalji Moolji Transport Company v. State of Rajasthan and Ors., decided on 10.4.2002, considering the judgments of the Hon'ble Supreme Court in R.S. Joshi and M/s. D.P. Metal (supra) and M/s. D.P. Metals (supra) etc., has taken a view that it would not be correct to protect a tax evader saying that there was absence of mens rea. The submission of false of forged document of declaration at the check post or even thereafter, can safely be presumed to have been motivated by desire to mislead the authorities. Thus, it is not always necessary that the doctrine of mens rea is attracted in every fiscal statute in all situations. The Court further held as under:-
"The requirement of law is meant to be strictly construed, particularly in areas of evasion of tax. We cannot lose sight of the fact that of the there are attempts to avoid statutory obligation or requirement of oblique reason. An undue indulgence and leniency in favour of the tax-evaders on technical or misplaced sympathetic grounds leads to serious consequence's affecting the revenue, and as such, development and security of the State. We are not oblivious of the fact that the penalty provisions cannot be used as a revenue-yielding provision. The object to the penalty provision is to ensure compliance in the larger public interest."
48. Thus, in view of the above, so far as the first case is concerned, there had been no declaration From like St. 18-A alongwith the goods, the question of mens rea, even if it is applicable, is not attracted at all and petitioner is liable to pay penalty as an additional tax for having breached the statutory provisions of the Statute.
49. So far as second revision is concerned, as there had been no proper description of the goods in the declaration, it cannot be accepted as a valid document as required under Rule 22-A (3) and, thus, petitioner was also correctly penalised for committing the breach of the statutory requirement.
50. The petitions are accordingly dismissed. There shall be no order as to costs.