M/.S. GULJAG INDUSTRIES versus COMMERCIAL TAXES OFFICER

Citation: [2007] 8 S.C.R. 793 · Decided: 03-08-2007 · Supreme Court of India · Bench: S.H. KAPADIA · Disposal: Disposed off

Judgment (excerpt)

f. 
MIS. GULJAG INDUSTRIES 
A 
v. 
COMMERCIAL TAXES OFFICER 
AUGUST 3, 2007 
[S.H. KAPADIA AND B. SUDERSHAN REDDY, Jl] 
B 
Sales Tax: 
Rajasthan Sales Tax Act, 1994-s. 78(5), (2)-Rajasthan Sales Tax Rules, C 
1995-Rule 53~Goods in movement carried with incomplete/blank 
declaration Form ST 18A though signed by the conslgnee~Penalty under 
s. 78(5)-Held: Rightly imposed~ince entire forin was left blank, declaration 
by consignee was meaningless-Penalty for tax delinquency is civil obligation, 
and is different.from penalty for a crime hence existence of mens rea is not 
essential for imposition-Rajasthan Sales Tax Act, 1954-s.22A(7)-Rajasthan D 
Sales Tax Rules, 1955. 
Rajasthan Sales Tax Act, 1994-s. 78(5)-0bject of~tated 
Rajasthan Sales Tax Act, 1954-s.22A(7)-Rajasthan Sales Tax Rules, 
1955-Rule 62A-Requisite documents not accompanying goods in E 
movement-Imposition of penalty-Held: Question as to whether penalty is 
imposable or not to be decided in the light of decision in D.P. Metals*-
Matter remitted to Commissioner (appeals)-Rajasthan Sales Tax Act, 1994-
s. 78(5), (2)-Rajasthan Sales Tax Rules, 1995-Rule 53. 
In the first batch of appeals filed by assessees, the dispute was that on 
checking of the vehicles at the check post, completely blank Form ST ISA 
were found with the goods in movement though they were signed by the · 
consignee. The asses.sing officer held that this indicated an intention of 
F 
· assessee to evade the tax and herice attracted penalty under s. 78(5) of 
Rajasthan Sales Tax Act, 1994 (s.22A(7) ofRajasthan Sales Tax Act, 1954). G 
The Appellate Authority upheld the order of assessing officer. Tax Board 
allowed the appeal of assessee holding that penalty could not be imposed without 
establishing guilty mind (mens rea) on the part ofassessee. Aggrieved by the 
decision of Board, Department filed revision before the High Court wherein 
it was held that presence of mens rea was not a sine qua non for levying penalty H 
793 
794 
SUPREME COURT REPORTS 
c20011 s s:c.R. 
A in case of contravention of s. 78(2) of the Act. Aggrieved assessee filed these 
appeals. 
In another batch of appeals filed by department, the dispute was that on 
verification of the vehicles, the goods were found to be more than the quantity 
shown in the bill. The driver of the vehicle did not produce the documents at 
B the time of checking and therefore assessee was held liable to penalty for 
breach of Rule 62A of RST Rules, 1955. Appellate authority held that non-
production of the bill at the check post indicated guilty mind to evade tax. 
However, Tribunal was of the view that penalty was automatic once the driver 
on demand failed to produce the documents accompanied with the goods under 
C s.22A(3) of RST Act, 1954. Assessee challenged the decision of Tribunal 
before the High Court. High Court held that levy of penalty was not automatic 
in case where goods in movement were found to be unaccompanied by requisite 
documents. Aggrieved department filed appeal.s before this Court. 
rJ 
Disposing of the appeals of assessees and department, the Court 
HELD: 1. 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 statute that it intends to alter the 
E course of the common law, then that plain meaning should be accepted. 
F 
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 fot a crime. !Para 9) (802-B-C] 
2.1. On the face of it, there was contravention of Section 78(2) of the 
RST Act 1994. Under Rule 53 of the RST Rules 1995(Rule 25C of the RST 
Rules 1955) every registered dealer who imports taxable goods, for sale within 
the State, is required to furnish declaration Form 18A completely filled in, 
G in all respects. Under Rule 53 of the said Rules the counterfoils of the 
declaration has to be retained by such consignee and its portions marked as 
'original' and 'duplicate' have to be carried with the goods in movement. Under 
the said Rule 53(1)(c) the driver is required to produce the declaratio

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