Full Judgment Text
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.5865 OF 2008
Assistant Commercial Taxes Officer … Appellant(s)
versus
M/s. Bajaj Electricals Ltd. … Respondent(s)
J U D G M E N T
S. H. KAPADIA, J.
This civil appeal filed by the Department is directed
against the judgment and order dated 1.8.07 passed by the
Rajasthan High Court in S.B. Sales Tax Revision Petition
No.114 of 2005 setting aside the penalty under Section 78(5)
of the Rajasthan Sales Tax Act, 1994.
2. On March 30, 1999 a truck coming from Delhi was
intercepted. The name of the consignor in was M/s. Navyug
Appliances (India), Mayapuri, Delhi. When the vehicle was
stopped for checking at the check-post the driver was directed
2
to produce bills, bilties, Declaration Form ST 18A for goods
loaded in the vehicle. The statement of the driver was
recorded. Show cause notice was issued. In reply to the show
cause notice the representative of the respondent (importer)
submitted that the duty for 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% to the tune of Rs.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 Dy.
Commissioner (A). Before the Appellate Authority it was
contended on behalf of the respondent that the Declaration
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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 Declaration Form ST 18A
with the goods was erroneous and unjustified, particularly,
when bilty, invoice etc. were there when the vehicle was
intercepted. Thus, blame was put on the
consignor/transporter. Moreover, during the course of hearing
the respondent had produced the Declaration Form ST 18A
and it was contended that in view of Declaration Form since
produced, the judgment of this Court in the case of State of
Rajasthan and Another v. D.P. Metals – (2002) 1 SCC 279
stood complied with. The arguments of the respondent were
rejected by the Commissioner (A) who came to the conclusion
that the above contentions advanced by the respondent were
merely excuses as neither in the reply to the show cause
notice nor in the enquiry before the AO the respondent ever
produce the said Form ST 18A and that the subsequent
production of the form was an after-thought. The Appellate
Authority further found that there was no affidavit from the
4
transporter owning up the said mistake. For the
above reasons, the Appellate Authority refused to interfere
with the penalty order passed by the A.O.
4. Aggrieved by the said decision of the First Appellate
Authority, respondent herein moved to Rajasthan Tax Board
in Appeal No.326 of 2004. Before the Board, respondent
contended that it had sent the Declaration Form ST 18A to the
consignor but due to mistake of the transporter who failed to
tag the said Declaration Form with the documents, a mistake
had crept in. It was urged that there was no intention of
evasion of tax. It was also argued that the cause of action in
the present matter arose on 30.3.1999, i.e., prior to 22.3.2002
when Section 78(5) stood substituted, hence penalty under
the amended Section 78(5) could not have been imposed
against the owner of the goods. The Board came to the
conclusion that the case arose prior to 22.3.2002 and
consequently imposition of penalty against the owner was
illegal. On that point alone the Board set aside the penalty
5
and allowed the appeal filed by the assessee. The Board did
not examine the merits of the case.
5. Aggrieved by the decision of the Board, the Department
preferred S.B. Sales Tax Revision Petition No.114 of 2005
before the Rajasthan High Court which took the view that
since the bill and bilty were found along with the goods at the
time of checking and since the said 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 number of matters where the Department has sought
to impose penalty under Section 78(2) read with Section 78(5)
of the said 1994 Act. It appears that in large number of cases
evasion has taken place on account of the importer’s
(consignee’s) failure to fill in Declaration Form ST 18A.
6
Moreover, in all these cases we found that when scrutiny
takes place Declaration Form(s) is sought to be produced after
incorporating the details required to be given in that Form. In
all these cases, 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 Income-tax
Act. We are not on the veracity of the contents of that Form.
Our preface is confined to the importer’s (consignee’s) refusing
to supply particulars which they are required to give in the
Declaration Form(s). We have come across numerous cases
where columns are left blank. The Forms are duly signed.
However, relevant columns are left blank. It is important to
note the significance of Declaration Form ST 18A. The said
Form is in two parts. In one part information is required to be
given by the consignee, in the other part details have to be
given by the consignor, however, it is the responsibility of the
consignee to see that the consignor supplies the requisite
information. The quantum of taxable turnover is dependent
7
on the declaration made by the consignee in Declaration Form
ST 18A. We regret to say that hundreds of such cases are
arising each year under the said 1994 Act. It appears that the
State is losing revenue on account of the consignee’s failure to
supply particulars in the prescribed Declaration Form. This is
one such case.
7. In the case of M/s. Guljag Industries v. Commercial
Taxes Officer – (2007) 7 SCC 269 , this Court has interpreted
Section 78(2) of the 1994 Act and Section 78(5) thereof. In
that case a vehicle was checked in which certain goods were
being transported from a place in Andhra Pradesh. The goods
were accompanied by outward gate pass and invoice which
indicated the name of the consignor and the consignee. Along
with the said goods Form ST 18A was also found. That form
was duly signed, however, it did not indicate the description of
the goods transported. Therefore, the A.O. held that there was
contravention of the provision of Section 22A(3) of the
Rajasthan Sales Tax Act, 1954 (for short, “the 1954 Act”). He
accordingly issued show cause notice to the appellant under
8
Section 22A(7) to show cause why penalty should not be
imposed for violation of Section 22A(3) of the 1954 Act. In
that case also the consignee (importer) pleaded mistake in
filling the Declaration Form. The consignee (importer) pleaded
lack of knowledge of Hindi language. The A.O. rejected the
explanation and imposed penalty under Section 22A(7) of the
1954 Act. The consignee (importer) failed before the Appellate
Authority. When the matter was pending in second appeal
before the Rajasthan Tax Board, the said 1954 Act was
replaced by the 1994 Act. The Tax Board 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 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
case of contravention of Section 22A(3) of the 1954 Act
(Section 78(2) of the 1994 Act). Even on facts, 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
9
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 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 attract levy of penalty for
breach of Section 78(2) of the 1994 Act. It was further held
that even if mens rea constituted an essential ingredient of
the offence under Section 78(2) even then the fact of not giving
particulars in the Declaration Form duly signed by the
consignee per se would amount to evasion of tax because the
modus operandi adopted by the consignee itself indicated
mens rea . In that matter heavy reliance was placed by the
consignee (appellant) on the judgment of this Court in the
case of D.P. Metals (supra) . The same judgment is also once
again relied upon before us in the present case by the
1
respondent. The judgment in D.P. Metals (supra) has no
application. The case of D.P. Metals (supra) was not
concerned with blank Declaration Form ST 18A travelling
along with the goods in movement. In that matter, the
question of interpretation of Section 78(5) did not arise. It was
a case in which validity of Section 78(5) was challenged on the
ground of it being beyond legislative competence, excessive,
arbitrary and unreasonable and therefore violation of Articles
14, 19(1)(a), 301 and 304 of the Constitution.
8. For the sake of convenience we reproduce important
paragraphs from the judgment of this Court in the case of
M/s. Guljag Industries (supra) as in our view the judgment
in M/s. Guljag Industries (supra) squarely applies to the
present case:
“ 9 Existence of 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 statute law, one has
to construe a statute in conformity with the common law.
However, if it is plain from the statue that it intends to alter the
course of the common law, then that plain meaning should be
accepted. Existence of mens rea 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. A penalty imposed for a tax
1
delinquency is a civil obligation, remedial and coercive in its
nature, and is different from the penalty for a crime.
24. Form 18A, as quoted above, is in two parts. Part-A has
to be filled in by the consignee. Part-B has to be filled in by
the consignor. The nature of the transaction as to whether it is
by consignment or by depot transfer or by interstate 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 goes to the A.O. is blank in all material
respects then it is impossible for the A.O. to assess the dealer
and it is this practice which has resulted in loss of revenue in
crores to the State. Without description of the goods imported,
it is easy to manipulate the value. If material particulars are not
submitted, one fails to understand how assessment could be
finalized. Moreover, as submitted on behalf of the State it has
become a common practice to circulate the same form again
and again resulting in loss of revenue to the State. It is for this
reason that Rule 53 of the RST Rules 1995 contemplates the
form to be submitted duly filled in and duly completed. In the
present case, the goods in movement were not supported by
duly filled in Form No.18A/18C. Therefore, there was
contravention of Section 78(2) of the RST Act 1994.
1
25. There is dichotomy between contravention of Section 78
(2) of the said Act which invites strict civil liability on the
assessee and the evasion of tax. When a statement of
import/export is not filed before the A.O. it results in evasion
of tax, however, when the goods in movement are carried
without the declaration Form No.18A/18C then strict liability
comes in, in the form of Section 78(5) of the said Act. Breach
of Section 78(2) imposes strict liability under Section 78(5)
because as stated above goods in movement cannot be carried
without Form No.18A/18C.
26. We are not concerned with non-filing of statements
before the A.O. We are concerned with the goods in movement
being carried without supporting declaration forms. The object
behind enactment of Section 78(5) which gives no discretion to
the competent authority in the matter of quantum of penalty
fixed at 30 per cent of the estimated value is to provide to the
State a remedy for the loss of revenue. The object behind
enactment of Section 78(5) is to emphasise loss of revenue and
to provide a remedy for such loss. It is not the object of the
said Section to punish the offender for having committed an
economic offence and to deter him from committing such
offences. The penalty imposed under the said Section 78(5) is
a civil liability. Willful consignment is not an essential
ingredient for attracting the civil liability as in the case of
prosecution. Section 78(2) is a mandatory provision. If the
declaration Form 18A/18C does not support the goods in
movement because 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) is 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.
1
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 they are not responsible
for the misdeeds of the consignors. The other explanation
given by the assessees is regarding the language problem.
There is no merit in these defences. They are excuses. The
declaration forms were unfilled so that they could be used
again and again. The forms were collected by the consignee
from the said Department. The consignee undertakes to see
that the value of the goods is supplied by the consignor. It is
not open to the consignee to keep the column in respect of the
description of goods as blank. Even the column dealing with
nature of transaction is left blank. The consignee is the buyer
of the goods. He knows the descriptions of the goods which he
is supposed to buy. There is no reason for leaving that column
blank. Therefore, there are no special circumstances in any
case for waiver of penalty for contravention of Section 78(2).
The assessees were fully aware that the goods in movement had
to be supported by Form ST 18A/18C. Therefore, they made
the goods travelled with the forms. However, the said forms
are left blank in all material respects. Therefore, A.O. was
right in drawing inference of mens rea against the assessees.
29. It has been repeatedly argued before us that apart from
the declaration forms the assessees possessed documentary
evidence like invoice, books of accounts etc. to support the
movement of goods and, therefore, it was open to the assessees
to show to the competent authority that there was no intention
to evade the tax. We find no merit in this argument. Firstly,
we are concerned with contravention of Section 78(2) which
requires the goods in movement to travel with the declaration
in Form 18A/18C duly filled in. It is Section 78(2)(a) which
has been contravened in the present case by the assessees by
carrying the goods with blank forms though signed by the
1
consignee. In fact, the assessees resorted to the above modus
operandi to hoodwink the competent officer at the check-post.
As stated above, if the form is left incomplete and if the
description of the goods is not given then it is impossible for
the assessing officer to assess the taxable goods. Moreover, in
the absence of value/price it is not possible for the A.O. to
arrive at the taxable turnover as defined under Section 2(42) of
the said Act. Therefore, we have emphasized the words
“material particulars” in the present case. It is not open to the
assessees to contend that in certain cases of interstate
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 interstate sales. It
is for contravention of Section 78(2) that penalty is attracted
under Section 78(5). Whether the goods are put in movement
under local sales, imports, exports or interstate transactions,
they are goods in movement, 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. In the present case, the assessees have relied upon the
judgment of this Court in the case of State of Rajasthan and
Another v. D.P. Metals – (2002) 1 SCC 279 . In that case the
facts were as follows. The assessee firm manufactured
stainless steel sheets. The assessee was a registered dealer. On
22.1.97 a truck was inspected by CTO. The same was found
without Form 18A. A show cause notice was issued to the
assessee. After hearing a penalty was levied under Section 78
(5) of the RST Act 1994. It was held that under Section 78(5)
levy of penalty was on the person incharge of the goods. It was
held that the said penalty was leviable under two
circumstances. Firstly, if there was non-compliance of Section
78(2)(a) of the said Act, namely, that it was not carrying the
documents mentioned in that clause. Secondly, if false or
1
forged documents/declaration was submitted then penalty
under Section 78(5) was leviable. After analyzing the said
Section, this Court held that in the case of submission of false
or forged documents/declaration, the authority was entitled to
presume the motive to mislead the authorities. However, in
such cases that presumption was rebuttable by the assessee on
producing the requisite documents referred to in Section 78(2)
(a). That, once the ingredient of Section 78(5) stood
established after giving a hearing, there was no discretion with
the officer to reduce the amount of penalty or to waive the
penalty. If by mistake some of the documents were not readily
available at the time of checking, principles of natural justice
might require opportunity being given to produce the same. It
was further held that under Section 78(5) the legislature has
fixed the rate of penalty and, therefore, the quantum of penalty
could not be waived or reduced.
33. In our view, the aforestated judgment in the case of D.P.
Metals (supra) has no application to the present case. We are
not concerned in the present case with false or forged
documents/declaration. In the present case the goods in
movement were carried with the blank declaration Form
18A/18C which was duly signed by the assessee. Therefore, as
stated above, we hold that the goods in movement were carried
without the declaration Form 18A/18C. Therefore, Section 78
(2)(a) stood attracted. Moreover, in the present case, there
were no special circumstances indicated by the assessee as to
why the forms which were duly signed were not filled in.
Therefore, in our view the above judgment in the case of D.P.
Metals (supra) has no application 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 (supra)
has no application to the present case.”
1
9. Reading the judgment in the case of M/s. Guljag
Industries (supra) , 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, 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 the Form ST 18A
per se indicated mens rea (intention to evade taxes). In the
said judgment we have also distinguished the case of D.P.
Metals (supra) vide para 33. Lastly, we may state that in the
case of M/s. Guljag Industries (supra) the vehicle was
intercepted on 21.1.95; the enquiry was made for
contravention of Section 22A(3) of the 1954 Act; and the
penalty was imposed under Section 22A(7) of the 1954 Act.
Therefore, it is wrong to suggest, as it sought to be done by
the respondent herein, that the judgment of this Court in
M/s. Guljag Industries (supra) has no application to the facts
1
of the present case as the cause of action arose prior to
22.3.2002. Therefore, in our view the judgment in the case of
M/s. Guljag Industries (supra) is squarely applicable to the
present case.
10. One additional submission is made on behalf of the
respondent. It is urged that M/s. Guljag Industries (supra)
proceeded on the basis of the law as it stood after the
amendment made to Section 78(5) of the 1994 Act by Act 7/02
by which the entity which is sought to be penalized is the
owner of the goods or a person authorized in writing by such
owner or the person in-charge of the goods. According to the
respondent herein, in the present case the interception of the
truck took place on 30.3.99 and consequently Act No.7 of
2002 dated 22.3.2002 did not apply to the present case. In
this connection respondent stated that Section 78(5) as it
stood before 22.3.2008 inter alia stated “the in-charge of the
checkpost or the officer empowered under sub-section (3),
after having given the person in-charge of the goods a
reasonable opportunity of being heard and after having held
1
such enquiry as he may deem fit, shall impose on him for
possession or movement of goods a penalty at the stipulated
rate”. Therefore, according to the respondent herein the
subsequent amendment by Act No.7 of 2002 had no
application to this case.
11. To answer the above contention, we need to quote the
following provisions from the 1954 Act, the 1994 Act as it
stood prior to 22.3.2008, the provision of the 1994 Act after
22.3. 2008, the rules framed under the 1954 Act, the rule
framed under 1994 Act as also the Statement of Objects and
Reasons for enacting Act No.7 of 2002:
“(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
1
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 in this behalf may, after giving the
owner or person incharge of the goods a reasonable opportunity
of being heard and after holding such further enquiry as he may
be deem fit, impose on him for possession of goods not covered
by goods vehicle record, and other documents prescribed under
sub-section (3) or for submission 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
[whichever 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 [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
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-S. (7):
Provided further that when an owner, incharge or driver
of a vehicle, boat or animal is found guilty second time of the
offence mentioned in the preceding proviso, he shall be liable
to a maximum penalty as mentioned in the preceding proviso
and the vehicle, boat or animal carrying the goods may be kept,
2
seized and detained for a period not exceeding 30 days after the
date of the payment of the penalty or furnishing of the security.
Provided also that where a transporter is found to be in
collusion with a trader to avoid or evade tax during the course
of movement of the goods through his vehicle, such vehicle
may, after an opportunity of being heard has been afforded be
confiscated by the Commercial Taxes Officer of the area in
whose jurisdiction the case was detected, with the prior
approval in writing of the Deputy Commissioner
(Administration) having jurisdiction and in case of confiscation
of the vehicle, no penalty shall be imposed in the preceding
first proviso.
(b) Such Officer may release any or the goods seized under
subsection (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 incharge 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
2
goods as defined in the explanation to sub-section (6) of
Section 22A.
(2)(a) If any person other than a registered dealer within the
State wants to purchase from outside the State any goods, as
notified by the State Government, of the value of rupees one
thousand or more for use, consumption or disposal within the
State, he shall make and furnish or cause to be furnished
declaration in Form S.T.18, the blank forms of which shall be
obtained by him on simple application alongwith payment of a
fee of rupee one for each form, from the Commercial Taxes
Officer concerned of his area where he ordinarily resides. The
counterfoil of the declaration shall be retained by such person
and its portions 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 only related in token of having verified it to the person
producing it.
Provided that where any person importing scooters
moped and motor cycles does not avail of the procedure and/or
permission in form ST 18 as prescribed herein above, he shall
given intimation of particulars as prescribed in Part ‘A’ of form
ST 18AA herein prescribed duly verified and signed by him at
least two weeks before the goods are dispatched from outside
the State to the Commercial Taxes Officer of the area in which
he ordinarily resides and shall obtain two duplicates copies of
the said Form duly received or countersigned from the office of
the said Commercial Taxes Officer, and one copy of ST Form
18AA with its Part A duly filled by him shall be produced or
caused to be produced by him along with a declaration as
prescribed in Part B of form ST 18AA duly verified and signed
by the driver or any other person incharge of the vehicle, boat
or animal or of the goods before the officer-in-charge of the
entry check-post of the state, who shall retain the same.
(b) Any person obtaining Form S.T. 18 under clause (a)
shall not in any manner transfer it to any other person obtaining
Form ST 18 under clause (a) shall not in any manner transfer it
2
to any other person for use under the said clause, or shall not
authorize any other person for such use on his behalf.
(c) If any Form S.T. 18 obtained under clause (a) is lost,
destroyed or stolen, the person concerned shall immediately
report in writing in this behalf to the officer from whom such
form was obtained.
(d) The application to obtain Form S.T.18 under clause (a)
shall be rejected if the Commercial Taxes Officer is satisfied
that such form is not required for bonafide 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 of
processing of goods for sale or in mining or
generation or distribution of electricity of 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 S.T.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
be furnished by the dealer along with his quarterly
statement in form S.T. 6 to the Assessing
Authority.
Provided that Form S.T. 18A need not be
furnished if the goods are goods of the class or
classes specified in the certificate or registration
2
under CST Act 1956 of the registered dealer
purchasing the goods as being intended for use by
him in the manufacture or processing of goods for
sale or mining or in the generation or distribution
of electricity or any other form of power.
Provided further that form S.T. 18A need
not be furnished if the goods consigned to the
State of Rajasthan are High and Light Speed
Diesel Oil, Petrol and Aviation Spirit.
(4) The provisions of sub-rule (2), (4), (5), (6), (8),
(9), (10), (11) and (12) of rule 15C shall, in so far as may
be, mutatis mutandis apply to declaration Form S.T.
18A.” (emphasis supplied)
“Rule 25-C. Furnishing of declaration.- (1) A dealer who is
entitled to and claims-
(i)
exemption from payment of tax; or
(ii)
payment of tax at a concessional rate.
(a) on sales made to a registered dealer of goods taxable at
the last point for the purpose of-
(i) resale within the State; or
(ii) sale in the course of inter-State trade or commerce; or
(iii) sale in the course of export out of the territory of India,
or
(iv) sale outside the State; or
(b) on the sale of any raw material eligible for concessional
rate of tax, under section 5C: or
(c)
on sales of any such goods as may be exempted from tax,
on the condition of furnishing declaration, shall in
respect of each such sale, obtain declaration from the
purchasing dealer in Form 17 and shall, alongwith the
return under rule 25, file all declarations obtained as
aforesaid and also submit a separate list of such sales in
Form ST 16.
2
Provided that all declarations obtained as aforesaid shall
be filed by the dealer before or at the time of assessment
or within such further time as the assessment may for
sufficient cause, permit.
Provided further that no declaration shall cover than one
transaction except where the total amount covered by
one declaration does not exceed Rs.2 lac for all the
transaction in six months.
Provided further that notwithstanding anything contained
in sub-rule(1), if the Commissioner, on an application
made by a dealer and after making such enquiry as he
may consider necessary, is satisfied that the dealer is not
in a position to furnish all or any of the declaration
referred to in sub-rule (1) above, on account of loss of
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 upto 31.12.89 in relation to riots occurred
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
5-CC 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 17-A
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 not exceed R.2 lac for all the
transactions in 6 months.
2
(1b) (i) The goods referred to in sub-section (1) of section 5
CCCC which a registered dealer may purchase, shall be the
goods intended for use by him as processing material (other
than raw materials) such as machinery, plant, equipment, tools,
stores spare parts and accessories in the manufacture or
processing of goods for sale, or in mining or in the generation
or distribution of electricity:
(ii) A dealer, who claims special rate of tax on the
sales of goods referred to in sub-section (1) of
section 5 CCCC shall in respect of such sale
obtain a declaration from the purchasing
manufacturer in Form ST 17C 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 not exceed Rs.2 Lac for all the
transactions in six months.
(2) Blank declaration Forms ST 17, ST 17A, ST 17B, ST 17C
and ST 18A may be obtained from the assessing authorities on
payment in the assessing Government Treasury a sum of
Rs.12/- for each book containing 25 Declaration Forms.
(2a) Every declaration form shall be authenticated by the
Assessing Authority with date of issue at the time of issuing of
declaration forms to the dealer and such forms shall remain
valid for 2 years from the date of issue.
Explanation. - Where the declaration forms were issued
before the insertion of this sub-rule, they shall remain
valid only upto 180 days from the date of insertion of
this sub-rule or 2 years from the date of issue, whichever
is later.
2
(3) Before furnishing the declaration to the selling dealer, the
purchasing dealer or any person authorized by him in his behalf
shall fill in all the required particulars in the form and shall also
affix his usual signature in the scope provided in the form for
the purpose, thereafter, the counterfoil of the form shall be
retained by the purchasing dealer and the other two portions
marked original and duplicate shall be made over by him to the
selling dealer.
(4) Any unused declaration form or forms remaining in stock
with a registered dealer on the cancellation of his registration
certificate shall be surrendered to the Assessing Authority.
(5) No registered 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 one 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 declared obsolete and invalid by the State Government
under the proviso to sub-rule (6). Every declaration form
obtained from the Assessing Authority by a dealer shall be kept
by him in safe custody and he shall be personally responsible
for the loss of Government revenue, if any, directly or
2
indirectly from any theft or loss thereof. Every registered
dealer to whom any declaration form is issued by an Assessing
Authority, shall maintain in a register in Form S.T. 16-A a true
and complete account or every such form received from the
Assessing Authority. If any such form is lost, destroyed or
stolen the dealer shall report the fact to the Assessing Authority
concerned and shall make appropriate entries in the remarks
column of the register in Form S.T. 16-A and take such other
steps to issue public notice of loss, destruction or theft as the
Assessing Authority may direct.
(9) A declaration form in respect of which a report has been
received by an Assessing Authority under sub-rule (8) shall not
be valid for the purpose of sub-rule (1) or (1a) or (1b).
(10) Every purchasing dealer shall maintain in Form S.T. 16A
a true and complete account of his purchases made on the
strength of declarations in Form ST. 16A.
(11) For obtaining declaration forms referred to in sub-rule (1)
or (1a) or (1b) a registered dealer or the owner or representative
of an undertaking, as the case may be, shall apply in Form ST
16-B to the concerned stating his requirement of such forms
and shall furnish such other particulars, statements and
information and produce such other documents as the
Assessing Authority may require for the purpose of satisfying
himself about the bonafide use of such form issued to the
applicant as previous occasion and bonafide nature of the
applicant’s requirement of such forms.
(12) (a) If for reasons to be record in writing –
(i) the Assessing Authority is not satisfied that the
applicant has made proper use of such forms
previously issued to him or that he actually
requires such forms he may reject the application.
(ii) The Assessing Authority is not satisfied that the
applicant requires the forms in such numbers as he
has applied for he may issue such forms in such
2
lesser number as, in his opinion, could satisfy the
reasonable requirements of the applicant.
(b) If the applicant for declaration forms is, at the time of
the applicant, 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 (2-A) 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 from to him until such time as
he:-
(i) deposits the outstanding demand;
(i-a) pays tax according to sub-section (2-A) 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 prescribed date or dates or the
extended date or dates, if any, may have expired after the
date of the application;
Provided that in a case coming under this clause, the
Assessing Authority may, instead of withholding the
declaration forms, issue such forms in such number and
subject to such conditions and restrictions and may be
considered reasonable, to an applicant, if in the opinion
of the Assessing Authority it is desirable in the interest
2
of speedy collection of sales tax revenue to grant time to
the applicant to pay up the arrears of tax in on lump sum
or in instalments.
(d) Where the Assessing Authority does not proceed
under clauses (a)(b) or (c), he shall issue the requisite
number of declaration forms to the applicant.
(13) The dealer who reports loss theft or destruction from his
custody of a blank or duly completed form, shall be required to
furnish security by way of an indemnity bond against any
possible misuse of the form:
Provided that where a form duly completed and signed is
reported to have been lost, stolen or destroyed while in
transit between the purchasing dealer and the selling
dealer or between the selling dealer and the Assessing
Authority, the purchasing dealer or as the case may be,
the selling dealer, shall be required to furnish security as
aforesaid.
(14) In the case of a purchasing, dealer, security under sub-rule
(13) shall be of such amount as may, having regard to the
circumstances of the case, be required by the Assessing
Authority from whom he obtained the form and shall be
furnished to such authority within such period as he may
specify:
(15) Where the security under sub-rule (13) is to be given by
the selling dealer, it shall be of such amount as may, having
regard to the circumstances of the case, be required by the
Assessing Authority to whom such dealer has to submit his
periodical returns of turnover and shall be furnished to such
Assessing Authority within such period as he may specify.
(16) Security required under sub-rule (13) shall be furnished
separately, in respect of each form declared as lost, stolen or
destroyed.” (emphasis supplied)
3
(b) Provisions contained in the 1994 Act :
“ Section 78 . ESTABLISHMENT OF CHECK-POST
AND INSPECTION OF GOODS WHILE IN
MOVEMENT: -
(2) The driver or the person incharge of a vehicle or 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 Incharge 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 Incharge of the
check-post or any other person authorised by such Incharge.
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
transporting agency or person or other such bailee;
(b) the goods which are being carried in a vehicle or carrier
belonging to the owner of such goods; and
(c) the goods which are being carried by a person.
3
(4) Where any goods in movement, other than exempted goods,
are without documents, or are not supported by documents as
referred to in Sub-section (2), or documents produced appear
false or forged, the in charge of the checkpost or the officer
empowered under Sub-section (3), may,-
(a) direct the driver or the person in charge of the vehicle
or carrier of the goods not to part with the goods in any
manner including by transporting or re-booking, till a
verification is done or an enquiry is made, which shall
not take more than seven days;
(b) seize the goods for reasons to be recorded in writing
and shall give receipt of the goods to the person from
whose possession or control they are seized;
(c) release the goods seized in clause (b) to the owner of
the goods or to anybody else duly authorised by such
owner, during the course of the proceeding if the
adequate security of the amount equal to the estimated
value of the goods is furnished.
(5) The in-charge of the checkpost or the officer empowered
under Sub-section (3), after having given the person in-charge
of the goods a reasonable opportunity of being heard and after
having held such enquiry as he may deem fit, shall impose on
him for possession or movement of goods, whether seized or
not, in violation of the provisions of Clause (a) of Sub-section
(2) or for submission of false or forged documents or
declaration, a penalty equal to thirty per cent of the value of
such goods.” (emphasis supplied)
Rules 53 and 54 of the 1995 Rules :
“ Rule 53. Declaration form required to be carried with the
goods in movement for imports within State.--
(1)(a) A registered dealer--
(i) who imports any taxable goods as may be notified by State
Government for sale, except when the goods are the goods of
3
the class or classes specified in the certificate of registration
under the Central Sales Tax Act, 1956, of the registered dealer
purchasing the goods and are purchased for mining or in
generation or distribution of electricity or any other form of
power ; 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 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 18AA, completely filled in all respect in ink.
The Counterfoil of the declaration shall be retained by
such dealer or person and its portions marked “Original”
or “Duplicate” shall be carried with the goods in
movement.
3
(c) The driver or the other person in-charge of a vehicle or
carrier of goods in movement shall carry with him the
documents specified in clause (a) of sub-section (2) of
section 78 and declaration prescribed in clause (a) or (b) of
this sub-rule, in respect of the goods in movement and shall
produce the same, suo motu before the in-charge of the
entry check-post at the time of entry within the State or
before the officer empowered under section 78, at the time
of inspection under sub-section (3) of section 78, who shall
retain the original portions of the declaration form and
return the duplicate portion after signature and making seal
in token of having verified it, to the person producing it, and
such officer shall send the retained original portion of the
declaration form to the assessing authority of the registered
dealer or to the authority who issued the declaration form, in
the case of dealer or other person other than registered
dealer.
(d)
If the declaration form referred to in clause (a) or (b) in
respect of the goods in movement has already been
submitted to the incharge of the entry check-post or to the
officer empowered under section 78, any person
transporting the goods shall, on inspection by an officer
empowered under section 78, at any subsequent place,
produce the countersigned and sealed copy of the aforesaid
declaration along with other documents specified in clause
(a) of sub-section (2) of section 78.
Explanation : - (1) For the purpose of this rule, “taxable-
goods” means all goods, except the goods the sale or purchase
of which by dealers is generally exempt from tax without any
condition or on the sole condition that an exemption certificate
with or without payment of fee is obtained or that the goods are
recorded in the registration certificate of the dealer claiming the
exemption.
(2) The registered dealer shall submit a statement of import
of goods in Form ST 18 along with the duplicate portions of
the Form ST 18A and in case original portion of the Form ST
18A has not been retained by any officer mentioned in sub-rule
(1), it shall also be furnished along with the duplicate portions
3
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
th th st
ending on 30 June, 30 September, 31 December or
st
31 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 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 the
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 shall be furnished with duplicate portion
of Form ST 18AA, to the issuing authority above
mentioned, within a period of thirty days, from the date
of issue of declaration form to him.
(4) Where a registered dealer or any other dealer or person
other than registered dealer, fails to furnish statement as
mentioned in sub-rule (2) or (3) above as the case may be the
assessing authority or the authority who issued the declaration
form, after affording a reasonable opportunity of being heard,
may impose penalty under section 68 of the Act.
(5) The provisions of sub-rule (5), (6), (7), (8), (9), (10),
(11), (12), (13), (14), (15), (16), (17), (18), (19) and (20) of rule
3
23 shall in so far as may be mutatis mutandis apply to the
declaration Form ST 18A.
(6) Where Form ST 18A and ST 18AA is out of print or in
short supply or otherwise not available in zone, the
Commissioner may issue such instructions as he deems proper
in view of the circumstances of the case.” (emphasis
supplied)
“Rule 54. Declaration required to be carried with the goods
in movement for export out of Rajasthan or in the course of
interstate trade or commerce;
(1) A registered dealer who dispatches any goods taxable
within the state to a place out of the state:-
(i) for sale outside the state or
(ii) in the course of interstate trade or commerce, as
notified by the State Government shall furnish or
cause to be furnished a declaration in form ST 18C
completely filled in all respect in ink. Such dealer
shall retain the counterfoil of the form within him
and shall produce or cause to be produced the
portion marked “original” and “Duplicate” before
the Incharge of the exit checkpost/Officer
empowered under section 78, who shall retain the
original portion and return the duplicate portion
after marking seal in token of having verified it, to
the person producing it, and such officer shall
send the retained original portion of the Form ST
18C to the assessing authority of the dealer.
(1) The dealer shall submit a statement of export of goods in
Form ST 18B along with the duplicate portion of Form ST
18C and in case original portion of Form 18C has not been
retained by any officer mentioned in sub-rule (1), it shall
also be furnished along with duplicate portion of form ST
18C to his assessing authority every quarter within thirty
days from the close of the quarter.
3
Explanation: - Quarter means the period of three months
th th st st
ending on 30 June, 30 September, 31 December and 31
March.
(2) 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.
(3) 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.
(4) 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 of fee of
Rs. 100/-. With the use of computers and other
modern techniques and other cost factors, the
registration fee fixed about half a decade age needs
upward revision. With this objective sub-sec. (3) of
Sec. 17 has already been amended in March, 2001.
In consonance with the said amendment, sub-sec.
(1) of Sec. 18 and sub-sec. (1) of Sec. 19 providing
for the fee for provisional registration and voluntary
registration respectively, are required to be
amended to empower the State Government to
3
prescribe such fee in accordance with the prevalent
circumstances.
Section 71 provides for the prosecution of any
person in the contingencies specified in sub-sec. (1).
As per clause (e) of sub-sec. (1), prosecution for
deliberately disregarding the notice issued by the
Assessing Authority for recovery of demand,
prosecution can be launched. However, similar
power are not available for the non-compliance of
the notice issued by the Commissioner u/s. 93 of
the Act to call for certain information. Therefore,
clause (e) of sub-sec. (1) of Sec. 71 is proposed to be
amended.
To protect the interest of the consumer, it is
being proposed to make it mandatory to issue bill or
cash memorandum by every registered dealer on
each sales of goods, other than the exempted goods,
of value of rupees two hundred or more. Failure to
do so will incur penalty of a sum equal to five times
of the amount of tax leviable on the sale in question
or rupees five hundred, whichever is higher. With
these objectives the existing Sec. 76 is proposed to
be suitably amended.
To have a check on the evasion of tax by
unscrupulous dealers/transporters by non-
disclosure of the details of the goods at the nearest
border check-posts established under sub-sec. (1)
of Sec. 78, the existing clause (b) of the Sec. 78 is
being amended to make it mandatory to bring the
vehicle or carrier at the nearest border check-post
while entering or leaving the State. Failure to do so
has been made subject to penalty by adding a new
sub-sec. (10-A) in Sec. 78.
While filing first appeal, the appellant is
required to deposit the admitted amount of tax or
other admitted amount or ten per cent of the tax or
3
the other amount assessed and in case of an appeal
from an ex-parte assessment order five per cent of
the tax or the other amount assessed, 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-sec. (1) of
Sec. 87 of the Act, it is proposed that the powers of
revisions can be exercised on fulfillment of either of
the above two conditions.
As per present provisions of sub-sec. (2) of
Sec. 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 ESTABLISHMENT OF CHECK-POST
AND INSPECTION OF GOODS WHILE IN
MOVEMENT: -
(5) The in-charge of the check-post or the officer empowered under
sub-section (3), after having given the owner of the goods or a
person authorized in writing by such owner or the person in-
charge of the goods the person incharge of the goods a
3
reasonable opportunity of being heard and after having held
such enquiry as he may deem fit, shall impose on him for
possession or movement of goods, whether seized or not, in
violation of the provisions of clause (a) of sub-section (2) or
for submission of false or forged documents or declaration, a
penalty equal to thirty per cent of the value of such goods.”
(emphasis supplied)
12. As stated above, it is the case of the respondent herein
that under Section 78(2) and under Section 78(5) penalty was
leviable after due opportunity only on “the person in-charge of
the goods” under the 1994 Act and since this case arose out of
cause of action when the truck was intercepted on 30.3.99,
respondent who is the owner of the goods cannot be penalized
under unamended Section 78(5) of the 1994 Act. We do not
find merit in this argument.
13. Let us examine the scheme of Section 78 of the said
1994 Act prior to 22.3.2002. Under Section 78(2) the driver or
the person in-charge of a vehicle or carrier of goods in
movement had to carry with him goods-vehicle record
including challans, bilties, bills of sale despatch memos and
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declaration in Form ST 18A. Under Section 78(4) where any
goods in movement travel without the above documents
(including Form ST 18A) or if the documents produced
appeared to be false or forged then the in-charge of the check-
post may inter alia seize the goods for reasons to be recorded
in writing or direct the person in-charge of the vehicle not to
part with the goods in any manner or to release the goods
seized to the owner of the goods. Therefore, there was a
dichotomy between the person in-charge of the vehicle or
carrier of goods in movement under Section 78(2) on the one
hand and the owner of the goods under Section 78(4) on the
other hand. However, under Section 78(5) the in-charge of the
check-post after having given the person in-charge of the
goods a reasonable opportunity of being heard and after
having held such enquiry as he may deem fit, shall impose on
him for possession or movement of goods in violation of the
provisions of Section 78(2)(a) a penalty equal to 30% 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
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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 22.3.02 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 of 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 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 used are “person in-charge of a
vehicle or carrier of goods in movement” whereas the words in
Section 78(5) which comes after sub-section (4) refers to
“person in-charge of the goods”. The words “in movement” do
not find place in Section 78(5) and therefore the expression
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“person in charge of goods” under Section 78(5) was wider
than the expression “person in charge of goods in movement”
under Section 78(2)(a). Consequently, the expression “person
in-charge of the goods” under Section 78(5) who is given an
opportunity of being heard in the enquiry would include the
“owner of the goods”.
14. Therefore, in our view, the judgment of this Court in the
case of M/s. Guljag Industries (supra) would squarely apply
to the facts of the present case. In fact, our view in the case of
M/s. Guljag Industries (supra) finds support from the
amendment made in Section 78(5) vide Act No.7 of 2002 w.e.f.
22.3.2002 by which the expression “person in-charge of the
goods” under the old Section 78(5) is substituted by the words
“the owner of the goods or a person authorized in writing by
such owner or person in-charge of the goods”. It is once again
emphasized that Act No.7 of 2002 is an exercise in
substitution. Therefore, the Legislature seeks to clarify the
expression “person in-charge of the goods” occurring in
Section 78(5) as it stood earlier by Act No.7 of 2002. In fact, it
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is interesting to note that even under Section 22A(3) of the
1954 Act, penalty was leviable on the “owner of the goods” for
possession of goods not covered by the Goods Vehicle Record
[including Declaration under Section 22A(3)].
15. Before concluding, on facts, we may point out that before
the A.O. the respondent contended that filling of the Form ST
18A was the responsibility of the transporter and the
consignor (which argument presupposes that respondent had
not filled the particulars in the Form ST 18A) whereas before
the Dy. Commissioner (A) a Form was produced purportedly
sent to the consignor which was not accepted. According to
the Commissioner (A) it was an after-thought. Before the Tax
Board it was submitted by the respondent that a blank Form
was sent to the consignor. In view of the above prevarication
we hold that the Dy. Commissioner (A) was right in holding
that all the above excuses are trotted out as an afterthought.
Even the production of the Form before the Dy. Commissioner
(A) was an afterthought. Under the 1995 Rules, the consignor
is required to give the said Form duly filled in when the
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consignment is ordered. The consignee has to see that the
Form is given to the transporter with the complete details duly
filled in by the consignor. If one sees the Form it is clear that
it shall be the duty of the consignee or his agent (transporter)
to see that the consignor fills the Form. Therefore, on facts we
are satisfied that the said Form in ST 18A though signed,
remained incomplete. The details required were never
supplied. Hence penalty was correctly levied under Section 78
(5) of the 1994 Act.
16. For the aforestated reasons, we set aside the impugned
judgment and allow Department’s civil appeal with no order as
to costs.
……………………………J.
(S.H. Kapadia)
……………………………J.
(B. Sudershan Reddy)
New Delhi;
November 6, 2008.
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