# ASSISTANT COMMERCIAL TAXES OFFICER v. M/S. BAJAJ ELECTRICALS LTD

- **Citation:** [2008] 15 S.C.R. 513
- **Court:** Supreme Court of India
- **Decided:** 2008-11-06
- **Case number:** Civil Appeal No. 5865 of 2008
- **Bench:** S.H. Kapadia, 8. Sudershan Reddy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/assistant-commercial-taxes-officer-v-m-s-bajaj-electricals-ltd-23942
- **Pages:** 43

## Headnote

,t
Rajasthan Sales Tax Act, 1994- s.78(5)- Penalty.under
- Incomplete/blank declaration Form ST 1 BA, signed by the
consignee accompanying goods in movement - Held: c
Amounts to contravention of s. 78(2) - Penalty imposable
under s. 78(5) - The amendment made in s. 78(5) by which
expression " person in-charge of the goods" under the old
s. 78(5) was substituted by the words "the owner of the goods
or a person authorized in writing by such owner or person in0
charge of the goods" was c!arificatory in nature - Rajasthan
y
Sales Tax Rules, 1995 - Rule 53.
'
The case of department was that on 30.3.1998, a
vehicle was intercepted. At the time of checking of the E
vehicle at the check post, the driver produced signed but
a blank Declaration Form ST 18A, with the goods in
movement. The important columns were left blank and
material particulars were not given. The Assessing Officer
(A.O.) imposed penalty holding that there was violation
F
of s.78(2)(a) of Rajasthan Sales Tax Act, 1994 r.w. Rule 53
of the Rajasthan Sales Tax Rules, 1995.
Before the Appellate Authority, it was contended by
respondent-assessee that the Declaration Form relating
to the goods was sent to the consignor but through
G
oversight it was left behind and there was no intention
to evade the tax. However, during the course of hearing,
,,.....,._
the assessee produced the Declaration Form ST 18A.
The Appellate Authority held that the contentions
513
H
514
SUPREME COURT REPORTS
[2008] 15 S.C.R.
A advanced by the assessee were merely excuses as
neither in the reply to the show cause notice nor in the
enquiry before the A.O., the assessee ever produced the
said Form ST 18A and the subsequent production of the
form was an after-thought.
B
The Tax Board held that the cause of action arose
prior to 22.3.2002 when s.78(5) stood substituted and
consequently imposition of penalty under amended
s. 78(5) against .the owner was illegal. High Court
confirmed the decision of Tax Board. Hence the instant
C appeal.
Allowing the appeal, the Court
HELD:1.1. Part-A of Declaration Form 18A has to be
0 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.
E Part-B requires the consignor to give the estimated value
of goods. He has also to give invoice number and the
date. The entire form was left blank though it was signed
by the consignee. Therefore, the declaration given by the
consignee was meaningless. There were no facts given
in Part-A. There was no identity or description of the
F goods transported. The original was 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.
Such practice has resulted in loss of revenue in crores
G to the State. Without description of the goods imported,
it is easy to manipulate the value. If material particulars
are not submitted, assessment could not be finalized.
Since the goods in movement were not supported by
duly filled in Form No.18A/18C, there was contravention
H · of s. 78(2) of the Rajas than Sales Tax Act,
.·
'
':'-
'
mi . -
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ
515
ELECTRICALS LTD .
....
1954. (Para 8] [523-F, G; 524-A-E]
A
1.2. There is dichotomy between contravention of
s.78(2) of the 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
B
evasion of tax, however, when the goods in movement
are carried without the declaration Form No.18A/18C then
JI t
strict liability comes in, in the form of s.78(5) of the Act.
Breach of s.78(2) imposes strict liability under s.78(5)
because goods in movement cannot be carried without
Form No.18A/18C. (Para 8] [524-F,

## Text

_Characters 0–39,158 of 81,411. This is a partial read: ask again with offset=39158 for what follows._

[2008] 15 S.C.R. 513
513
ASSISTANT COMMERCIAL TAXES OFFICER
A
...
v.
M/S. BAJAJ ELECTRICALS LTD.
(Civil Appeal No. 5865 of 2008)
NOVEMBER 6, 2008
B
[S.H. KAPADIA AND 8. SUDERSHAN REDDY, JJ.]
,t
Rajasthan Sales Tax Act, 1994- s.78(5)- Penalty.under
- Incomplete/blank declaration Form ST 1 BA, signed by the
consignee accompanying goods in movement - Held: c
Amounts to contravention of s. 78(2) - Penalty imposable
under s. 78(5) - The amendment made in s. 78(5) by which
expression " person in-charge of the goods" under the old
s. 78(5) was substituted by the words "the owner of the goods
or a person authorized in writing by such owner or person in0
charge of the goods" was c!arificatory in nature - Rajasthan
y
Sales Tax Rules, 1995 - Rule 53.
'
The case of department was that on 30.3.1998, a
vehicle was intercepted. At the time of checking of the E
vehicle at the check post, the driver produced signed but
a blank Declaration Form ST 18A, with the goods in
movement. The important columns were left blank and
material particulars were not given. The Assessing Officer
(A.O.) imposed penalty holding that there was violation
F
of s.78(2)(a) of Rajasthan Sales Tax Act, 1994 r.w. Rule 53
of the Rajasthan Sales Tax Rules, 1995.
Before the Appellate Authority, it was contended by
respondent-assessee that the Declaration Form relating
to the goods was sent to the consignor but through
G
oversight it was left behind and there was no intention
to evade the tax. However, during the course of hearing,
,,.....,._
the assessee produced the Declaration Form ST 18A.
The Appellate Authority held that the contentions
513
H
514
SUPREME COURT REPORTS
[2008] 15 S.C.R.
A advanced by the assessee were merely excuses as
neither in the reply to the show cause notice nor in the
enquiry before the A.O., the assessee ever produced the
said Form ST 18A and the subsequent production of the
form was an after-thought.
B
The Tax Board held that the cause of action arose
prior to 22.3.2002 when s.78(5) stood substituted and
consequently imposition of penalty under amended
s. 78(5) against .the owner was illegal. High Court
confirmed the decision of Tax Board. Hence the instant
C appeal.
Allowing the appeal, the Court
HELD:1.1. Part-A of Declaration Form 18A has to be
0 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.
E Part-B requires the consignor to give the estimated value
of goods. He has also to give invoice number and the
date. The entire form was left blank though it was signed
by the consignee. Therefore, the declaration given by the
consignee was meaningless. There were no facts given
in Part-A. There was no identity or description of the
F goods transported. The original was 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.
Such practice has resulted in loss of revenue in crores
G to the State. Without description of the goods imported,
it is easy to manipulate the value. If material particulars
are not submitted, assessment could not be finalized.
Since the goods in movement were not supported by
duly filled in Form No.18A/18C, there was contravention
H · of s. 78(2) of the Rajas than Sales Tax Act,
.·
'
':'-
'
mi . -
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ
515
ELECTRICALS LTD .
....
1954. (Para 8] [523-F, G; 524-A-E]
A
1.2. There is dichotomy between contravention of
s.78(2) of the 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
B
evasion of tax, however, when the goods in movement
are carried without the declaration Form No.18A/18C then
JI t
strict liability comes in, in the form of s.78(5) of the Act.
Breach of s.78(2) imposes strict liability under s.78(5)
because goods in movement cannot be carried without
Form No.18A/18C. (Para 8] [524-F, G]
c
1.3. It is not the object of the s.78(5) to punish the
offender for having committed an economic offence and
to deter him from committing such offences. The penalty
imposed under the said s.78(5) is a civil liability. Willful
D
'(
consignment is not an essential ingredient for attracting
~
the civil liability as in the case of prosecution. S.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 s.78(5) provides for imposition
E
of monetary penalty for non-compliance. [Para 8] (525-C,
D]
Mis. Gu/jag Industries v. Commercial Taxes Officer
(2007) 7 sec 269, relied on.
·~
F
2.1. Prior to 22.3.2002, under s. 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 declaration in Form ST 18A. Under s.78(4), where any
goods in movement travel without these documents
G
(including Form ST 18A) or if the documents produced
~
appeared to be false or forged then the in-charge of the
check-post could 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
H
516
SUPREME COURT REPORTS
[2008] 15 S.C.R.
A release the goods seized to the owner of the goods.
Therefore, there was a dichotomy between the person incharge of the vehicle or carrier of goods in. movement
under s.78(2) on the one hand and the owner of the
goods under s.78(4) on the other hand. However, under
B s,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
c provisions of s.78(2)(a) a penalty equal to 30% of the
value of such goods. If one reads sub-section (5) of s.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 goods for sale without furnishing a
0 declaration in Form ST 1 BA completely filled in all
respects. The duty to fill and furnish the said Form is
imposed on the purchasing dealer. Therefore, s.78(5) as
it stood prior to 22.3.02 imposed penalty if possession or
movement of goods took place in breach of s.78(2)(a) on
"the person in-charge", which included the owner. It is
E the owner (importer) who has to fill in the Form ST 18A.
It is the owner who is entitled to seek release under
s.78(4) on giving security. It is the owner who is entitled
to hearing under s.78(5) and, therefore, the expression
"person in-charge of the goods" under s.78(5) would
F include the owner. Moreover, under s.78(2) the words
used are "person in-charge of a vehicle or carrier of
goods in movement" whereas the words in s.78(5) which
comes after sub-section (4) refers to "person in-charge
of the goods". The words "in movement" do not find
G place in s.78(5) and therefore the expression "person in
charge of goods" under s.78(5) was wider than the
expression "person in charge of goods in movement"
under s.78{2)(a). Consequently, the expression "person
in-charge of the goods" under s.78(5) who is given an
H opportunity of being heard in the enquiry would include
!-
'
\
I ' .
F
"
'
/ ,
~
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ
517
ELECTRICALS LTD.
··.the "owner of the goods;'. [Para 13] [553-D-H; 554-A, F]
A
2.2. The amendment was made in s.78(5) by Act No.7
of 2002 w.e.f. 22.3.2002 by which the expression "person
in-charge of the goods" under the old s.78(5) is
substituted by the words "the owner of the goods or a
8
person authorized in writing by such owner or person incharge of the goods". The Act No.7 of 2002 is an exercise
in substitution. The Legislature sought to clarify the
expression "person in-charge of the goods" occurring in
s.78(5) as it stood earlier by Act No.7 of 2002. [Para 14]
C
[554-G, H; 555-A]
State of Rajasthan and Anr. v. D.P. Metals (2002) 1 SCC
279, held inapplicable.
3. Before the A.O., the respondent-assessee o
contended that filling of the Form ST 18A was the
responsibility of the transporter and the consignor (which
argument presupposed that respondent had not filled the
particulars in the Form ST 1 SA) whereas before the
Appellate Authority, it was contended that the Form was
E
purportedly sent to the consignor. The Appellate Author.ity
was right in holding that these excuses are trotted out as
an afterthought. Even the production of the Form before
the Appellate Authority was an afterthought. Under the
1995 Rules, the consignor is required to give the said
Form duly filled in when the 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
F
the duty of the consignee or his agent (transporter) to see
that the consignor fills the Form. Therefore, on facts the
G
said Form in ST 18A though signed, remained
incomplete. The details required were never supplied.
Hence penalty was correctly levied under s.78(5) of the
.. 1994 Act. [Para 15] [555-C-G]
H
518
SUPREME COURT REPORTS
[2008] 15 S.C.R.
A
Case Law Reference :
I-
(2007) 7 sec 269
relied on
Paras.7, 8, 9,10, 14
t
(2002) 1 SCC 279
held inapplicable Paras 3, 7, 9
B
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
5865 of 2008.
From the final Judgment and Order dated 1.8.2007 of the
"' ~ .
..
High Court of Judicature for Rajasthan at Jaipur in S.B. Sales
Tax Revision Petition No. 114 of 2005.
c
Jatinder Kumar Bhatia for the Appellant.
Puneet Jain, Sushil Kumar Jain, Archana Tiwari and
Pratibha Jain for the Respondent.
D
The Judgment of the Court was delivered by
Y' ...
S.H. KAPADIA, J .. 1. 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
\.
E 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 Mis. Navyug
F
Appliances (India), Mayapuri, Delhi. When the vehicle was
stopped for checking at the check-post the driver was directed
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
i"-
was not duly filled in. The A.O. came to the conclusion that
goods were imported without the Declaration Form ST 18A
H which amounted to violation of Section 78(2)(a) of the
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ
519
ELECTRICALS LTD. [S.H. KAPADIA, J.]
..
Rajasthan Sales Tax Act, 1994 (for short, "the 1994 Act") read
A
--:1
~
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,
B
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
Form relating to the goods was sent to the consignor but c
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,
D
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 AQother v. O.P. Metals,
(2002) 1 SCC 279 stood complied with. The arguments of the
E
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
F
subsequent production of the form was an after-thought. The
Appellate Authority further found that there was no affidavit from
the 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.
ti
G
4. Aggrieved by the said decision of the First Appellate
..
Authority, respondent herein moved to Rajasthan Tax Board in
""'f
Appeal No.326 of 2004. Before the Board, respondent
contended that it had sent the Declaration Form ST 18A to the
H
520
SUPREME COURT REPORTS
[2008] 15 S.C.R.
(,
~-
A 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
B 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 and allowed the appeal filed by the
......
c
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
D
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
Y,
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,
E 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
F 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 Declaratl0n Form ST 18A.
Moreover, in all these cases we found that when scrutiny takes
G 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
I,
scrutiny begins or at the stage of investigation/enquiry. It is
.,...
H
important to note that these Declaration Forms are similar to
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ
521
ELECTRICALS LTD. [S.H. KAPADIA, J.]
~
Returns under Income-tax Act. We are not on the veracity of the
A
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
B
blank. It is important to note the significance of Declaration
Form ST 1 BA. 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 c
s~pplies the requisite information. The quantum of taxable
turnover is dependent on the declaration made by the consignee
in Declaration Form ST 1 BA. 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
D
...,.,
Declaration Form. This is one such case .
7. In the case of Mis. Gu/jag 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
E
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
F
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 Section
G
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
H
522
SUPREME COURT REPORTS
[2008] 15 S. C.R.
A 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
B 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
~~
c 22A(3) of the 1954 Act (Section 78(2) of the 1994 Act). Even
I
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 appeal by special leave in this Court. After
D 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
y
read with Rules 53 and 54 of the Rajasthan Sales Tax Rules,
1995, this Court held inter alia that mens rea was not necessary
E
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 givi.Qg 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
F
mens rea constituted an essential ingredient of the offence
under Section 78(2) even then the fact of not giving particulars
Y'
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)
G on the judgment of this Court in the case of O.P. Metals (supra).
The same judgment is also once again relied upon before us
in the present case by the respondent. The judgment in O.P.
Metals (supra) has no application. The case of O.P. Metals
..,....
(supra) was not concerned with blank Declaration Form ST 18A
H travelling along with the goods in movement. In that matter, the
J
~
---
,.,
\
-i
...i..__...,
....,.
----(
\
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ
523
ELECTRICALS LTD. [S.H. KAPADIA, J.]
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 Mis.
Guljag Industries (supra) as in our view the judgment in Mis.
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 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 oy 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
A
B
c
~
it
F
G
H.
524
SUPREME COURT REPORTS
[2008) 15 S.C.R.
A
undertaking to get Part-8 filled by the consignor. Similarly,
the consignee gives a declaration that facts stated in PartA 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.
B
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
~ /
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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
D
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
y
form again and again resulting in loss of revenue to the
State. It is for this reason that Rule 53 of the RST Rules
E
1995 contemplates the form to be submitted duly filled tn
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.
F
25. There is dichotomy between contravention of Section
),.oool.-
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 kO. it results in
evasion of tax, however, when the goods in movement are
G
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.
"'"
H
26. We are not concerned with non-filing of statements
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ
525
ELECTRICALS LTD. [S.H. KAPADIA, J.]
before the A.O. We are concerned with the goods in
A
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
B
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. c
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
D
because it is left blank then in that event Section 78(5)
""(
provides for imposition of monetary penalty for noncompliance.
27. Default or failure to comply with Section 78(2) is the·
failure/default of statutory civil obligation and proceedings
E
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 unger Section 78(5)
F
is attracted as soon as there is contravention of statutory
obligations. Intention of parties committing such violation
is wholly irrelevant.
28. Moreover, in the present case, we find that goods in
G
movement carried with Form No.18A/18C. The modus
operandi adopted by the assessees itself indicates mens
-t
rea. This is not the case where goods in movement are
carried witnout the declaration forms. In the present matter,
as stated above, goods in movement were carried with
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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
B
is- regarding the language problem. There is no merit in
these defence_s. They are excuses. The declaration forms
were unfilled so that they could be used again and again.
The forms were collected by the tonsignee from the said
Department. The. consignee undertakes to see that the
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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
D
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
y
contravention of Section 78(2). The assessees were fully
aware that the goods in movement had to be supported
E
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
F
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
G
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
H
carrying the goods with blank forms though signed by the
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ
527
ELECTRICALS LTD. [S.H. KAPADIA, J.]
consignee. In fact, the assessees resorted to the above
A
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
B
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 c
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
0
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
E
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
F
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
G
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
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)-
·-,A
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
8
mentioned in that clause. Secondly, if false or 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
-4 ~
false or forged documents/declaration, the authority was
c
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 rlo discretion with the officer to reduce the ·
D
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
E
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
F
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
1 BA/1 BC which was duly signed by the assessee.
Therefore, as stated above, we hqld that the goods in
G
movement were carried without the declaration Form 1 BAI
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,
H
in our view the above judgment in the case of D.P. Metals
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ
529
ELECTRICALS LTD. [S.H. KAPADIA, J.]
' ;...
(supra) has no application to the facts of the present case.
A
-\
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
8
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 O.P. Metals (supra) has no application to the present c
case."
9. Reading the judgment in the case of Mis. Gu/jag
Industries (supra), two points are very clear. That judgment rules
out mens rea as an essential ingredient of the offence under
D
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
E
,
distinguished the case of D.P. Metals (supra) vide para 33.
)
Lastly, we may state that in the case of Mis. Guljag Industries
(supra) the vehicle was intercepted on 21.1.95; the enquiry was
r-.-.(
made for contravention of Section 22A(3) of the 1954 Act; and
the penalty was imposed under Section 22A(7) of the 1954 Act.
F
Therefore, it is wrong to suggest, as it sought to be done by
the respondent herein, that the judgment of this Court in Mis.
Guljag Industries (supra) has no application to the facts 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 Mis. Guljag G
Industries (supra) is squarely applicable to the present case.
10. One additional submission is made on behalf of the
respondent. It is urged that Mis. Guljag Industries (supra)
proceeded on the basis of the law as it stood after the
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[2008] 15 S.C.R.
A amendment made to Section "18(5) of the 1994 Act by Act 71
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
B 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 22.3.2002 inter alia stated "the in-charge of the
checkpost or the officer empowered under sub-section (3),
c 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 a penalty at the stipulated
rate". Therefore, according to the respondent herein the
/
0 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 22.3.2002, the provision of the 1994 Act after 22.3.
E 2002, 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:
F
G
H
"(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 officerin-charge of check-post or barrier or any other officer as
may be empowered by Government in that behalf. The
t--t
·'
..-·.
.
'
"
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ
531
ELECTRICALS LTD. [S.H. KAPADIA, J.]
owner or person in-charge of a vehicle, boat or animal
A
->--
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-incharge of the check-post or barrier or the officer
B
empowered as aforesaid and give one copy of the
declaration to such officer, and keep one copy with him.
~
j
(?)(a) The ofticer-in-charge of the check post or barrier or
any other Officer not below the rank of an Assistant c
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
D
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].
E
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
·-"'1<
or the incharge or the driver of the vehicle, boat, or animal
F
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
G
five times of the rate of tax notified under section 5 of tne
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
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532
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SUPREME COURT REPORTS
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security in such form as prescribed under clause (b) of subs.