JUDGMENT
B.N. Srikrishna, C.J.
1. This appeal is directed against the judgment of the learned Single Judge dated 18th December, 1992, quashing and setting aside a penalty order imposed on the respondent by Exts. P6 to P6(s).
2. The appellant is a company incorporated under the Companies Act, 1956. On 3rd July 1976, the appellant purchased tea estates of three companies known as Kannan Devan Hill Produce Co. Ltd., Anglo American Direct Tea Trading Co. Ltd., and Amalgamated Tea Estates Ltd. These three companies were registered in the United Kingdom and for the sake of brevity they are hereinafter referred to as “U.K. Companies”.
3. The concerned officer of the Sales Tax Department issued three registration certificates which were valid from 1.7.1957 until cancelled. The respondent Has been issued with notices by the Agricultural Income Tax and Sales Tax Officer, Munnar for
offences alleged to be under Section 10(a) and 10(d) of the Central Sales Tax Act, 1956, (hereinafter referred to as “the Act”) committed by the three U.K. Companies between 1967 and 1973, arising out of different orders passed against the said companies on different dates. The three U.K. Companies held registrations under the Central Sales Tax Act from 1.7.1967, which covered all goods necessary for the business of tea estates specified that the holders could deal, inter alia, in goods under the head “cultivation” and “crop cultivation”, which attracted concessional rate of sales tax under Section 8 of the Act.
4. In proceedings numbered as K-1/C, the Sales Tax Officer, Devikulam came to the conclusion that that one of the U.K. Companies was not entitled to purchase goods under the head “cultivation” and “crop protection” as such goods were not necessary for the business of tea. This order was passed in respect of Kannan Devan Hill Produce Co. Ltd. (for short “KDHP”). By the impugned order made on 25.8.1966 the Sales Tax Officer disallowed those goods for the purpose of Section 8 of the Act. The certificate of registration which allowed the purchase of these goods ought to have been taken back from KDHP to bring them in conformity with the order, but this was not done. Consequently, the unamended original certificate continued with the company, KDHP, and happened to be used subsequent to the aforesaid order. In the appeal filed by KDHP, the Appellate Assistant Commissioner of Sales Tax on 5.8.1969 allowed the appeal and set aside the order made by the Sales Tax Officer, Devikulam disallowing the goods under the head “cultivation” and “crop protection”. Consequently, the original certificate without the deletion of the heads “cultivation” and “crop protection” continued to operate. However, on further appeal by the Department, the Kerala Sales Tax Appellate Tribunal set aside the order of the Appellate Assistant Commissioner of Sales Tax and restored the order of the Sales Tax Officer dated 25.8.1966. The order of the Tribunal was subsequently upheld by the High Court. Similarly, in the case of other two companies, viz. Anglo American Direct Tea Trading Co. Ltd. (for short, “ADT”) and Amalgamated Tea Estates Ltd. (for short, “ATE”) also, orders were made by the Sales Tax Officer excluding from the certificates of registration the goods under the head “cultivation” and “crop protection”.
5. The issue as to whether the goods falling under the head “cultivation” and “crop cultivation” were eligible for exemption under Section 8 of the Central Sales Tax Act was the subject of controversial litigation between the U.K. Companies and the Department. The uncertainty as to the eligibility of the said goods for concessional rate of sales tax was finally resolved by the judgment of the Supreme Court on 11.10.1976.
6. After 1974, the Sales Tax Officer, Devikulam issued notices to KDHP, ADT and ATE to show cause as to why penalty should not be imposed under Section 10A of the
Act, for violation of Sections 10(b) and 10(d) thereof. The substance of the charge was that, C forms under the CST Act were issued by the three U.K. companies to the dealers for the purchase of goods not directly connected with the production, manufacture or processing of tea. Consequently, there was unauthorised collection of tax at concessional rate, which was violative of Section 10(b) and 10(d) of the Act. The Sales Tax Officer, therefore, proposed to levy a penalty of 15% on the purchase value and called upon the three U.K. Companies to show cause thereagainst.
7. The violation of the provisions of the Act alleged against the three U.K. companies were in respect of goods purchased during the years 1967-68 to 1972-73. By separate orders made on 15.8.1975, the Sales Tax Officer overruled the objections of the three U.K. companies and imposed a penalty of 15% on the value of each year’s purchase of goods. The orders imposing penalty for the alleged violation of Section 10(a) and 10(b) of the Act were challenged by Writ Petitions by the three U.K. Companies before this Court. Those Writ Petitions were allowed and the orders imposing penalty were quashed by different orders of this Court which directed the Sales Tax Officer to reconsider the case and pass fresh orders after giving to the said companies an opportunity of being heard. Thereafter, the Sales Tax Officer issued notices on 31.5.1988 to the present petitioner, heard the matters and made orders in July and September, 1938, almost ten years after the first batch of petitions were disposed of, and fifteen years after the offences alleged to have been committed. The present petitioner opposed the notices as untenable on several grounds. But the objections raised by the petitioner were over ruled and by the series of orders, Exts. P6 to P6(S), the petitioner was held liable to pay a penalty at the rate of 12% on the purchase value of goods, which were alleged to have been purchased in contravention of Sections 10(a) and 10(b) of the Act by the three U.K. companies during different periods. These orders were challenged by the respondent before the learned Single Judge and resulted in a judgment in its favour.
8. The following contentions were raised in the Original Petition by the petitioner/ respondent to impugn the orders of penalty:
(i) The impugned orders of penalty were made in the year 1988, i.e., after about 10-12 years after the remand orders and about sixteen years after the of fences were alleged to have been committed. Hence, there was unreasonable delay in imposing the penalty.
(ii) The essential ingredient of false representation created by Clause (b) of Section 10 of the C.S.T. Act requires mens rea on the part of the offender. Since the original petitioner/ respondent being a transferee was never in the picture on the dates of the alleged offences, there could be no such metis rea on the part of the transferee.
(iii) The respondent being a transferee of the erstwhile U.K. companies, who were alleged to have committed the offences under Section 10(a) and 10(b) of the Act, there was no such vicarious liability which could be foisted to the transferee under the provisions of the Act.
(iv) In the case of KDHP, the goods under the head “cultivation” and “crop protection” were disallowed on 25.8.1966, but the certificate of registration was not amended by the authority during 1967-1973. Therefore, no offence was committed by KDHP.
The learned Single Judge accepted the aforesaid contentions except the last one that KDHP could not be said to have committed the offence. On this reasoning, the learned Single Judge allowed the Original Petition and quashed the penalty orders and directed refund of the penalty amounts collected together with simple interest at the rate of 6% per annum from the date on which the respondent had paid the penalty till the date of refund.
9. Before we take up the appellant’s contentions for consideration, it is necessary to notice one fact. Despite a number of factual averments made in the Original Petition, no counter affidavit was filed by the Department. Thus, the learned Single Judge had to proceed on the footing that the averments made in the Original Petition were uncontroverted.
10. Turning the first question of delay, it is urged by the Senior Government Pleader, Mr. Roy Chacko, that there is no absolute proposition of law that a penalty cannot be levied after a considerable period of time, in the absence of any statutory prescription of limitation for such action. He contends that what is reasonable is always a question of fact, and, in the facts and in the circumstances of the case, merely because the notice was issued after about 10-12 years after the date of first remand, and about 16 years after the commission of the offence, it does not lead to a conclusion that the penalty orders were unreasonably delayed or should be interfered with on that count. He cited in support a judgment of a learned Single Judge of this Court in Swamy Brothers v. Asst. Commissioner of Sales Tax, Alleppey and Ors., (1988) 71 STC 233.
11. It is true that, there is no absolute proposition of law that delay would necessarily render a penalty proceedings bad, in the absence of any limitation prescribed by statute. In the instant case, we notice that there was no explanation for the delay in the penalty proceedings by the Department. The only explanation, if any, to be found is in the order levying the penalty. The Sales Tax Officer gave two reasons for the delay in the order. The first was that, the position in law was some what confused and complicated and that the respondent itself had by its letter dated 24.5.1978 requested the Sales Tax Officer that the matter be kept pending as an appeal was pending before the Supreme Court. The learned Single Judge rightly pointed out that if this was an excuse for the delay, then the Supreme Court having disposed of the pending appeal on 14.12.1979, there was no explanation for the delay after 14.12.1979. The second explanation found in the order of the Sales Tax Officer was that there was “want of direction”. This cryptic observation of the Sales Tax Officer was rightly
criticised by the learned Single Judge, who did not find it worthwhile to accept it as an explanation. We agree with the finding of the learned Single Judge. As to who was to give direction, what was the direction awaited, and why it was awaited, are matters which are exclusively within the knowledge of the departmental officers. If, at all, there was a legitimate explanation in this behalf, it was the duty of the officers concerned to explain it by way of a counter affidavit. Having failed to do so, they must be held responsible for the delay that was found in issuing the penalty order. We find that the explanation offered for the delay is unsatisfactory, and have no difficulty in accepting the conclusions of the learned Single Judge on this issue.
12. The second and more vital issue is, whether the penal liability for violation of Sections 10(a) and 10(b) of the Act could be foisted on the respondent. The learned Government Pleader does not dispute that there is no provision in the Central Sales Tax Act for holding a person vicariously responsible tor the penal liability incurred under Sections 10(a) and (b) of the Act. It is an elementary principle of criminal jurisprudence that there can be no vicarious liability, unless the statute expressly says so. The fact that the respondent was not the dealer on the dates when the offences were committed is not in dispute. It is also not in dispute that the three U.K. companies were the ones who issued the C forms. A reading of Section 10(a) and 10(b) of the Act suggests that any person who has committed the acts described thereunder is liable for a penalty. Another interesting feature is that penalty under Section 10A of the Act is “in lieu of prosecution”. Thus, it could be levied only in circumstances which could have warranted prosecution for the offences under Sections 10(a) and 10(b) of the Act. If the respondent was not liable to be prosecuted for those offences, as it was not the offender, there was no question of imposing the penalty in lieu of prosecution under Section 10A of the Act on the respondent. The fact that the present respondent took over the business of the tea estates by sale deeds of 31.12.1976 and 19.4.1977 is not in dispute. In these circumstances, we are of the view that the contention urged by the learned counsel for the Department must fail. The respondent could not have been held guilty of offences under Sections 10(a) and 10(b) and liable for prosecution for the offences committed by the transferor – U.K. companies and therefore, the respondent could not have been subjected to the penalty under Section 10A of the Act, in lieu of such prosecution.
13. Mr. Roy Chacko, learned Senior Government Pleader, strenuously urged that the respondent had an alternate remedy of revision before the statutory authorities, and, therefore, the Original Petition ought not have been entertained. The learned Single Judge has rightly given short shrift to this contention by holding that ‘alternate remedy’ is an attractive argument only when a Writ Petition comes up for admission; it is open for this Court to decline to exercise its plenary powers under Article 226 of the Constitution and relegate the petitioner to the statutory remedies, if they are equally efficacious alternate remedies. The learned Single Judge disposed of the contention by holding that, at the end of five years, the petition could not be summarily dismissed
on the ground of availability of equally efficacious alternate remedy. Apart from this reasoning of the learned Single Judge, we have our own doubt as to whether a revision can be an equally efficacious alternative remedy.
14. For the above reasons, we find no substance in both the contentions. As the appeal must fail on these grounds, we do not think it necessary to go into the correctness of the other ground as to whether the UK companies could have been found guilty of the offences under Section 10(a) and 10(b) of the Act. Even assuming that they could have been prosecuted and subjected to penalty in lieu of prosecution under Section 10A of the Act, we are of the view that the respondent could not have been made liable for somebody else’s sins. On these grounds, the respondent was entitled to succeed in the petition and the learned Single Judge has rightly directed the refund of penalty amount together with interest at 6% per annum from the date of payment of penalty until refund.
We find no substance in the appeal. The appeal must, and does fail and is dismissed. Considering the financial crisis the State is facing, learned counsel for the respondent graciously submits that the respondent does not press for costs. Hence, we do not pass any order as to costs.