ORDER
Sunil Kumar Garg, J.
1. This revision petition has been filed by the petitioner-Assistant Commercial Taxes Officer against judgment and order dated March 19, 2002 (annexure 5) passed by the Rajasthan Tax Board, Ajmer, in Appeal No. 1065/1997 by which the appeal of the petitioner was dismissed.
2. It arises in the following circumstances:
On August 26, 1996, near Banar Check-post, District Jodhpur, the vehicle No. DIG/6229, which was carrying 162 pieces of CI pipes and fittings belonging to the respondent M/s. Agarwal Steel Industries, was intercepted and checked by the petitioner-Assistan Commercial Taxes Officer and during checking, it was found that the declaration form S.T. 18A was not accompanied with the goods. Since the goods in transit were not accompanied with the declaration form S.T. 18A, therefore, a notice Under Section 78(5) of the Rajasthan Sales Tax Act, 1994 (hereinafter referred to as “the Act of 1994”) for violation of the provisions of Section 78(2) of the Act of 1994 read with Rule 53 of the Rajasthan Sales Tax Rules, 1995 (hereinafter referred to as “the Rules of 1995”) was issued by the assessing authority to the respondent-dealer as to why penalty be not imposed.
A reply to the said show cause notice was filed by the respon-D dent stating, inter alia, that all papers were available at the time when the checking was made by the petitioner-Assistant Commercial Taxes Officer and it was further submitted by the respondent that since the goods were not notified goods, therefore, declaration form S.T. 18A was not required.
After examining the matter, the assessing authority came to the conclusion that the goods, which were being carried, i.e., CI pipes are cast iron and covered by the term “iron and steel” as defined in Section 14(iv) of the Central Sales Tax Act, 1956 (hereinafter referred to as “the Act of 1956”) and therefore, declaration form S.T. 18A was necessary and since it was not accompanied with the goods, therefore, the respondent was guilty of violating the provisions of Section 78(2) of the Act of 1994 read with Rule 53 of the Rules of 1995 and consequently, the assessing authority through order dated August 27, 1996 (annexure 3) imposed the penalty of Rs. 31,515 on the respondent-dealer.
Aggrieved from the said order dated August 27, 1996 (annexure 3), the respondent-dealer preferred an appeal before the Deputy Commissioner (Appeals), Commercial Taxes, Jaipur, Under Section 84 of the Act of 1994 and through judgment dated April 22, 1997 (annexure 4), the Deputy Commissioner (Appeals) allowed the appeal of the respondent and set aside the order of the assessing authority dated August 27, 1996 (annexure 3), holding, inter alia, that the goods in question were not notified goods and therefore, declaration form S.T. 18A was not required.
Aggrieved from the said judgment of the Deputy Commissioner A (Appeals) dated April 22, 1997 (annexure 4), the petitioner preferred second appeal before the Rajasthan Tax Board, Ajmer and the Rajasthan Tax Board, Ajmer, through impugned judgment dated March 19, 2002 (annexure 5) dismissed the appeal of the petitioner and affirmed the findings recorded by the learned First Appellate Authority through judgment dated April 22, 1997 (annexure 5). The Rajasthan Tax Board further came to the conclusion:
(i) That the goods in question were not notified goods and therefore, declaration form S.T. 18A was not required.
(ii) That at the time of checking, rest papers and documents accompanied with the goods were found valid and correct one and therefore, mens rea on the part of the respondent to evade tax cannot be inferred,
(iii) That penalty imposed without establishing the mens rea on the part of the respondent was not in accordance with law.
Aggrieved from the said judgment dated March 19, 2002 (annexure 5) passed by the Rajasthan Tax Board, the petitioner has filed this revision petition.
3. In this revision, two submissions have been raised by the learned Counsel for the petitioner:
(i) That the goods in question are included in the notified goods and are covered by Section 14(iv) of the Act of 1956 and therefore, the findings of both the lower appellate authorities in this respect cannot be sustained and are liable to be set aside.
(ii) That when it is found that the goods in question were notified goods, accompanying of declaration form S.T. 18A with the goods was necessary and since it was not accompanied with the goods, therefore, if the assessing authority had imposed penalty on the respondent, it had committed no mistake in doing so and further-more, since goods were not accompanied with the declaration form S.T, 18A, mens rea on the part of the respondent should have been treated as established.
Hence, it was prayed this revision petition be allowed and the ” impugned judgments of both the lower appellate authorities be quashed and set aside and the order of the assessing authority be restored.
4. On the contrary, the learned Counsel appearing for the respondent has submitted that since the goods in question were not notified goods, therefore, it was not necessary to accompany the declaration form S.T. 18A with the goods and apart from this, at the time of checking, all other documents and papers were found valid and correct one and there was no mens rea on the part of the respondent to evade tax and in absence of any mens rea to evade tax, imposition of penalty was bad in law and the same was rightly set aside by the lower appellate authorities and in this respect, he has placed reliance on the latest division Bench decision of this Court in Parashwanath Granite India Ltd. v. State of Rajasthan [2006] 144 STC 271 : (2004) 9 Tax Update 125.
5. I have heard the learned Counsel for the petitioner and the learned Counsel for the respondent and gone through the entire materials available on record.
6. There is no dispute on the point that on August 26, 1996 when the vehicle in question carrying the goods in question of the respondent was checked by the petitioner, the declaration form S.T. 18A was not found. However, rest documents and papers were found valid and correct one.
Point No. 1
7. The case of the petitioner is that the goods in question were notified goods and therefore, accompanying of declaration form S.T. 18A was necessary.
8. On the other hand, the case of the respondent is that the goods in question were not notified goods and therefore, declaration form S.T. 18A was not required.
9. In this respect, both lower appellate authorities came to the conclusion that the goods in question were not notified goods and thus, it was not necessary to accompany the declaration form S.T. 18A with the goods.
10. In my considered opinion, the above findings of the lower appellate authorities on point No. 1 cannot be accepted.
11. In the list of the goods, on which declaration form S.T. 18A was required, which was issued by the State Government through Notification No. F.4(l)FD/Tax.Div./2000-298 dated March 30th, 2000, “iron and steel” have been included at serial No. 18, which reads as follows:
18. Iron and steel as defined Under Section 14 of the CST Act.
12. The relevant portion of Sub-section (iv) of Section 14 of the A Act of 1956 reads as under:
14(iv) iron and steel, that is to say,–
(i) pig iron (sponge iron) and cast iron including (ingot moulds, bottom plates), iron scrap, cast iron scrap, runner scrap and iron skull scrap;
13. In my considered opinion, the above definition is exhaustive one and includes cast iron pipes and therefore, the argument of the respondent that the goods in question, i.e., CI pipes were not notified goods cannot be accepted and it is held that the goods in question, i.e., CI pipes, which were being carried in the vehicle in question on August 26, 1996, were notified goods and for that, declaration form ST-18 was necessary.
14. Hence, the findings of both lower appellate authorities on point No. 1 that goods in question were not notified goods, cannot be sustained and liable to be set aside.
Point No. 2
15. On point No. 2, the case of the petitioner is that since declaration form S.T. 18A was not accompanied with the goods, there- fore, there was mens rea on the part of the respondent to evade tax.
16. On the other hand, the case of the respondent is that at the time of checking, when all other documents and papers were found valid and correct one and declaration form S.T. 18A was not accompanied with the goods on the bona fide belief that it was not required as they were not notified goods and therefore, mens rea or mala fide intention on the part of the respondent to evade tax should not be inferred in view of above circumstances.
17. The Rajasthan Tax Board came to the conclusion that penalty imposed without establishing any mens rea on the part of the respondent was not in accordance with law.
18. Before proceeding further, something should be said on mens rea.
19. In my considered opinion, mere contravention of provisions of Section 78(2) of the Act of 1994 cannot authorise the assessing authority to impose penalty Under Section 78(5) of the Act of 1994 unless there is a mens rea on the part of the trader. Apart from this, mens rea is an essential ingredient for imposing penalty.
20. The word “mens rea” does not bear a literal meaning (i.e., “bad mind” or guilty mind) because one.who breaks the law even with the best of motives still commits a crime. The language is no longer meant to convey the idea of general malevolence characteristic of early common-law usage. The true translation is criminal intention or recklessness. Words typically imposing a mens rea requirement include wilfully, maliciously, fraudulently, recklessly, negligently, corruptly, feloniously and wantonly.
21. The fundamental principle pertaining to mens rea is based on the maxim actus non facit reum nisi mens sit rea (the intent and act must both concur to constitute the crime), meaning thereby an act does not make a man guilty without guilty intention to do the guilty act which is made penal by the statute or common law.
22. This Court in Assistant Commercial Taxes Officer v. Rajasthan Taxation Tribunal [2001] 123 STC 172 has observed that existence of mens rea on the part of dealer committing breach for avoidance or evasion of payment of tax is sine qua non for levying penalty for such breach which otherwise is of technical nature.
23. Thus, it can be concluded that mens rea is an essential ingredient for imposing penalty Under Section 78(5) of the Act of 1994 for violating the provisions of Section 78(2) of the Act of 1994. Furthermore, a difference can be made in respect of intentional contravention of any provision or breach of any provision technically without mens rea. It is made clear that contravention of any provision, which is not accompanied by mens rea, may be treated as technical one and for that breach, provisions of penalty clauses embodied in Section 78(5) of the Act of 1994 cannot be attracted automatically. Further, every contravention cannot entail penalty clause as provided in Section 78(5) of the Act of 1994.
24. The division Bench of this Court in the case of Parashwanath Granite India Ltd. [2006] 144 STC 271 has reiterated the same view on mens rea and in that case, the division Bench overruled the two single Bench judgments of this Court in Mutha Prem Raj v. ACTO (2002) 3 Tax Update 51 and ACTO v. Shiv Shambhu (2003) 7 Tax Update 136 where contrary view was taken.
25. In the present case, from the materials available on record, it appears that no doubt at the time when the checking was made, the declaration form S.T. 18A was not accompanied with the goods, but it was not accompanied with the goods only because the respondent thought that it was not necessary as the goods were not notified goods and further, since other papers were found genuine, valid and correct one, therefore, in these circumstances, no mala fide intention A or mens rea on the part of the respondent-dealer for avoidance or evasion of payment of tax can be inferred or gathered. Therefore, the findings of the Rajasthan Tax Board that there was no mens rea or mala fide intention on the part of the respondent to evade tax and thus, penalty imposed without establishing any mens rea on the part of the respondent was not in accordance with law, cannot be said to be erroneous or perverse one and further, they do not suffer from any basic illegality or infirmity. Hence, no interference is called for with the same.
26. For the reasons stated above, no substantial question of law arises in this revision petition and there is no force in this revision petition and the same deserves to be dismissed.
27. Accordingly, this revision petition, filed by the petitioner- Assistant Commercial Taxes Officer is dismissed. No order as to costs.
