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CASE NO.: Appeal (civil)  5197 of 2005

PETITIONER: M/s. Guljag Industries

RESPONDENT: Commercial Taxes Officer

DATE OF JUDGMENT: 03/08/2007

BENCH: S. H. Kapadia & B. Sudershan Reddy

JUDGMENT:

WITH Civil Appeals Nos.5210, 5211, 5212, 5213, 5214, 5215-16, 5217,  5218, 5219, 5220, 5221, 5222, 5223, 5224, 5226, 5227, 5228, 5229,  5230, 5232, 5233, 5234, 5235, 5236, 5237, 5238, 5239, 5240, 5243,  5244, 5245, 5246, 5247, 5248, 5249, 5250, 5260, 5261, 5262, 5263,  5264, 5265, 5266, 5267, 5269, 5255, 5256, 5257, 5258, 5259, 4412,  5283, 5723, 4413, 4414, 4415, 4416, 4417, 4418, 4419, 4420, 4421,  4422, 4423, 4425, 4426, 4429, 4430, 4431, 4432, 4433, 4434, 4435,  4436, 4437, 4439, 4440, 4441, 4442, 5252, 5253 of 2005 Civil Appeal No.1927, 2243, 2392, 2393, 2952, 2953, 3195, 5273 of 2006 Civil Appeal Nos.1422, 1769, 2291 of 2007 Civil Appeal No.  3419    of 2007 arising out of Special Leave Petition (C) Nos.18473/2005 Civil Appeal No.  3420    of 2007 arising out of Special Leave Petition (C) No.9748/2005

J U D G M E N T

KAPADIA, J.

1       Leave granted in special leave petitions.

2       In this batch of civil appeals we are required to consider the scope of  Section 78(5) of the Rajasthan Sales Tax Act, 1994 which is in pari materia  to Section 22A (7) of the Rajasthan Sales Tax Act, 1954.

3       For the sake of convenience we may mention the facts in Civil Appeal  No.5197 of 2005 \026 M/s. Guljag Industries v. Commercial Taxes Officer.

4       On 21.1.95 near the Banar Road Check Post a vehicle was checked in  which 47 barrel of chemicals were transported from Vishakapattanam.   Along with the goods, outward gate pass No.4331 dated 16.9.95 of Andhra  Petro-Chemicals Ltd. and consignment No.920 dated 16.9.95 of M/s. AVR  & Co. were found in which the name of the consignor was shown as M/s.  Andhra Petro-Chemicals Ltd. Vishakapattanam and the name of the assessee  was mentioned as M/s. Guljag Industries (assessee - appellant herein).   Along with the goods, Form ST 18A No.236084 was also found in which  the goods transported was not declared though the same was duly signed.   Under the above circumstances the A.O. came to the conclusion that there  was a contravention of the provisions of Section 22A(3) of the Rajasthan  Sales Tax Act, 1954 (for short, ’RST Act 1954’) read with Rule 62A(3) of  the Rajasthan Sales Tax Rules, 1955 (for short, ’RST Rules 1955’).  He  accordingly issued notice under Section 22A(7) of the RST Act 1954 calling  upon M/s. Guljag Industries to show cause why penalty was not leviable for  violation of Section 22A(3) of the RST Act 1954.  In response to the said  notice M/s. Guljag Industries submitted that there was mistake in filing the  declaration form and, therefore, there was no intention of tax evasion.  It was

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further submitted that the said declaration Form ST 18A (Form No.18A) was  supposed to be filled in by the consignor but due to lack of knowledge of  Hindi language the same could not be filled in by the consignor.  The AO  did not accept the Explanation given by M/s. Guljag Industries.  The AO  refused to accept the unfilled form as a declaration.  Accordingly, he  imposed the penalty under Section 22A(7) of the RST Act 1954.  Aggrieved  by the decision of the AO, M/s. Guljag Industries preferred Appeal  No.77/RST/JUC/95-96.  By order dated 10.8.99, Dy. Commissioner  (Appeals) came to the conclusion that under Rule 25(3) of RST Rules 1955  the purchasing dealer was required to give the requisite declaration in Form  ST 18A to the selling dealer.  According to the appellate authority, the  responsibility to fill the form was on M/s. Guljag Industries.  That, M/s.  Guljag Industries carried on business from Rajasthan.  It was familiar with  Hindi language.  Therefore, the unfilled Form No.18A cannot be accepted as  a declaration.  The appeal was accordingly dismissed.  Aggrieved by the  decision of Dy. Commissioner (Appeals), M/s. Guljag Industries carried the  matter in second appeal to Rajasthan Tax Board, Ajmer being Appeal  No.1375/99/Jodhpur.  By that time Rajasthan Sales Tax Act 1994 (for short,  ’RST Act 1994’) came to replace RST Act 1954.  However, Section 78(5) of  RST Act 1994 was in pari materia to Section 22A(7) of RST Act 1954.  By  order dated 27.2.2002 the Board came to the conclusion that penalty could  not be imposed without establishing guilty mind (mens rea)  on the part of  M/s. Guljag Industries (assessee).  The appeal was allowed.   

5       Aggrieved by the decision of the Board, the Department carried the  matter in revision to the Rajasthan High Court.  By order dated 14.10.03 the  single Judge held that presence of mens rea was not a sine qua non for  levying penalty in case of contravention of Section 22A(3) of the RST Act  1954 (Section 78(2) of the RST Act 1994).  By the said order the learned  single Judge held that in the present case Form No.18A was totally blank  though signed by the consignee; that it was the duty of the consignee or his  agent to see that the form was returned to the transporter with complete  details by the consignor.  It was further held that the filling up of the form  was the duty of the consignee/importer.  The learned single Judge held that  in the circumstances since the consignee was from Rajasthan and since the  form was unfilled it cannot be said that the error was accidental.  That,  moreover in both the States, namely, Andhra Pradesh (Vishakapattanam)  and Rajasthan, there are Hindi-speaking persons.  In the circumstances, the  learned single Judge held that the form was deliberately not filled in which  indicated an intention of the assessee M/s. Guljag Industries to evade the tax.   Accordingly, the order of the Board was set aside.  Aggrieved by the order  passed in revision by the single Judge the assessee (M/s. Guljag Industries)  has come to this Court by way of Civil Appeal No.5197 of 2005.

6       In Civil Appeal No.5240 of 2005 \026 Assistant Commercial Taxes  Officer v. M/s. Guljag Industries Ltd. preferred by the Department the  facts are as follows.

7       On 1.11.90 at Abu Road Check-Post, a vehicle was checked which  was carrying goods.  On search the driver furnished GR No.1 dated 31.10.90  issued by M/s. Delhi Bombay Road Lines.  The consignment was shown to  be M/s. Sumit Marbles, Abu Road.  There was Bill No.122 dated 31.10.90.   That Bill referred to 50.31 sq. meters of granite priced at Rs.34,494 and the  name of the recipient was shown M/s. Sri Parashwanath Granites.  On  verification of the vehicle, the goods were found to be more than the  quantity shown in the bill.  On searching the vehicle two envelopes were  found one of which was of M/s. Sri Parashwanath Granites and other was of  M/s. Hindustan Granites.  Being suspicious of the evasion of tax, notice  under Rule 54 of RST Rules 1995 was issued on 16.11.90.  The  representative of the assessee appeared.  He deposited the disputed penalty  amount and goods were released.  In reply to the show cause notice given to  the assessee proposing levy of penalty under Section 22A(7) of the RST Act  1954, it was submitted by the assessee that he had delivered the relevant  documents to the transporter which were found to be in the vehicle at the  time of the seizure of the goods and, therefore, the assessee was not liable to

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be penalized under the said Section.  According to the assessee (M/s. Sri  Parashwanath Granites), the driver of the vehicle had made a mistake in not  producing the documents which were with him at the time of checking and,  therefore, the assessee was not liable to be penalized for breach of Rule 62A  RST Rules 1955.  This explanation was not accepted.   

8       On appeal, the Dy. Commissioner (Appeals) confirmed the levy of  penalty.  The appellate authority held that non-production of the Bill at the  check-post indicated guilty mind of the assessee to evade tax.  On further  appeal, the Rajasthan Sales Tax Tribunal vide order dated 31.3.93 took the  view that mere non-production of document by the driver at the check-post  cannot result in levy of penalty.  Against the order of the Tribunal, a revision  was filed before the single Judge of the High Court, however, on  constitution of Rajasthan Taxation Tribunal, it stood transferred.  The  Tribunal took the view that it was obligatory on the part of the consignee or  his agent to carry with him the requisite documents and also to produce the  documents at the check-post on demand by the officer.  The Tribunal took  the view that contravention of Section 22A of the RST Act 1954 cannot be  obliterated by producing subsequently the documents at the time of  assessment.  The Tribunal took the view that Rules 62A and 63 of the RST  Rules 1955 have no application.  The said rules applied at the stage of  assessment.  Accordingly, the Tribunal held that penalty was automatic once  the driver on demand failed to produce the document lying with him or if he  fails to produce the documents accompanied the goods under Section 22A(3)  of the RST Act 1954.  According to the Tribunal, once the offence is  complete subsequent furnishing of the documents even if bona fide will not  relieve the owner of the goods from liability of penalty.  This decision of the  Tribunal was challenged by M/s. Sri Parashwanath Granites.  By judgment  dated 2.6.2004, the High Court held that the levy of penalty was not  automatic in the case where the goods in movement are found to be  unaccompanied by the required documents.  According to the High Court,  the question of levy of penalty would arise only before the goods are  delivered to consignee and if it is found that the goods are in movement  unaccompanied with documents.  On facts the High Court found that if for  some reason the driver failed to produce these documents at the check-post  which were subsequently produced and which were not false or forged, it  could not be said that there was intention to evade the tax.  The High Court  held that merely because the driver had not shown the documents given to  him by the assessee,  could not make the assessee guilty of contravention.   Consequently, the High Court held that notwithstanding the failure on the  part of the driver to show the bill accompanying the goods at the time of  checking but in fact recovered from its possession later on ruled out the  possibility of the document being subsequently prepared, accordingly, the  order imposing penalty was set aside.  At this stage, we may state that even  in this ruling of the High Court in the case of Sri Parashwanath Granites, the  High Court has clarified that the case of Sri Parashwanath Granites was not  the case of the documents being incorrect.  On the contrary, the High Court  found that the document, namely, the bill accompanying the goods was  correct in all respects and, therefore, there was no tax evasion.   Consequently, the order imposing penalty was set aside.  This decision of  the High Court in Sri Parashwanath Granites has been followed by the High  Court in the case of M/s. Guljag Industries.  Hence, aggrieved by the said  decision, the Department has come to this Court by way of Civil Appeal  No.5240 of 2005.

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.  

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10      Therefore, the short point which arises for determination in this batch  of civil appeals is : whether the above presumption, namely, that mens rea is  an essential ingredient in every offence is displaced by the words of Section  78(5) RST Act 1994.   

11      To decide the above question we quote hereinbelow Section 22A of  the RST Act 1954 which reads as under: "22A Establishment of check-post or barrier and inspection  of goods while in transit. \026 (1) If the State Government or the  Commissioner considers it necessary that with a view to  prevent or check evasion of tax under this Act in any place or  places within the State it is necessary so to do, it may; by  notification in the Official Gazette, direct the setting up of a  check-post or the erection of a barrier or both at such place or  places as may be specified in the notification;

       Provided that the Commissioner may not direct the  setting up of a check-post or the erection of a barrier for a  period exceeding six months.

(2)     At every check-post or barrier set up or erected under  sub-section (1) or at any other place when so required by any  officer empowred by the State Government in this behalf, the  driver or any other person in-charge of a vehicle, boat or animal  shall stop the same and keep it stationary so long as may  reasonably be necessary and allow the officer-in-charge of the  check-post or barrier or the officer empowered as aforesaid to  examine the goods carried in or on such vehicle, boat or animal  and inspect all records relating to the goods carried which are in  the possession of such driver or other person incharge, who  shall, if so required, give his name and address and the name  and address of the owner of the vehicle, boat or anial and also  the names and addresses of the consignors and consignees, if  any, and in case the consignor or the consignee is a registered  dealer, whether in this State or in any other State, the number  within the name of the district of issue of the registration  certificate, if any, of such consignor or the consignee, as the  case may be.

(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  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.

(4)             xxx                     xxx                     xxx

(5)  The officer-in-charge of a check-post or barrier or the  officer empowered under sub-section (2) may seize or pass  order to retain under sub-section (9).  [xxx] any goods which  are under transport by a vehicle, boat or animal and are not  covered by a goods vehicle record, a trip sheet or log book as  the came bay be, and other documents prescribed under sub- section (3) and when the goods vehicle, boat or animal carrying

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any goods enters or leaves the State limits, the declaration  referred to in sub-section (3) also.

(6)     The officer-in-charge of the check-post or barrier or any  other officer empowered in that behalf may seize or pass order  to retain under sub-section (9) any goods (other than exempted  goods) which are under transport by a vehicle, boad or animal  in respect of which the declaration is false or which are not  covered by the documents prescribed under sub-section (3):

       Provided that before seizing any goods, the officer-in- charge of the check-post or barrier or any other officer  empowered in that behalf shall record his reasons for doing so  and shall give a receipt for the goods to the person from whose  possession or control they are seized.

Explanation I.- For the purpose of this sub-section, "exempted  goods" includes goods the sale or purchase of which by dealers  in general is exempt from tax without any condition or on the  sole condition that an exemption certificate, with or without  payment of fee, is obtained or the goods are recorded in the  registration certificate of the dealer claiming the exemption.

Explanation II.- For the purpose of this section the goods under  transport means goods which have been handed over to a carrier  and complete delivery thereof has not been taken from such  carrier.

Explanaation-III. \026 Carrier means any person or agency who  undertakes to carry or transport goods from one destination to  another.

(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,  seized and detained for a period not exceeding 30 days after the  date of the payment of the penalty or furnishing of the security.

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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. (8)     All provisions of this section shall apply mutatis  mutandis  to goods and animals liable to tax under this Act  which may be carried by any means of transportation other  those specified in sub-section (2).

(9)     An officer empowered under this section shall have the  power to inspect goods under transport including the documents  and records relating thereto, and may direct a carrier not to part  with the goods including re-transporting or re-booking till such  verification is done or such enquiry is made as is deemed  necessary by such authority.

(10)    No order of penalty under this section shall be quashed or  deemed to be void or voidable for want of seizure or mistake,  defect or omission in seizure."

12      We also quote hereinbelow Rule 62A of  the RST Rules 1955 which  reads as under: "(62A) Documents prescribed under section 22A(3) \026  

(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  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

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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  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  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

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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."     

13      We also quote hereinbelow Rule 25-C of the RST Rules 1955 which  reads as under: "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.

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

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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.

(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.

(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

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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 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 \026  

(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

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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 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

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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, lhaving  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."

14      We also quote hereinbelow Section 78 of the RST Act 1994 which  reads as under: "78. ESTABLISHMENT OF CHECK-POST AND  INSPECTION OF GOODS WHILE IN MOVEMENT: -

(1)     The Commissioner may, with a view to prevent or check  avoidance or evasion of tax, by notification in the Official  Gazette, direct the setting up of a check-post at such place  and for such period as may be specified in the notification,  and every officer or official who exercises his powers and  discharges his duties at such check-post by way of  inspection of documents produced and goods being moved,  shall be its Incharge.

(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 "billies", 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.

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(2A)    The State Government may require by notification that  the documents required to be furnished under sub-section (2)  shall be furnished by means of such electronic devices, and be  accompanied by such processing fee as may be prescribed.

(3) Where any goods are in movement within the territory of  the State of Rajasthan, an officer empowered by the State  Government in this behalf may stop the vehicle or the carrier or  the persons carrying such goods, for inspection, at any place  within his jurisdiction and the provisions of Sub-section (2)  shall mutatis mutandis apply.

(4) Where any goods in movement, other than exempted goods,  are without documents, or are not supported by documents are  referred to in Sub-section (2), or documents produced appear  false or forged, the Incharge of the check-post or the officer  empowered under Sub-section (3), may,-

(a) direct the driver or the person incharge of the vehicle  or carrier or of the goods not to part with the goods in  any manner including by retransporting or rebooking, 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 a 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 court of the proceeding if adequate  security of the amount equal to the estimated value of the  goods is furnished.

(5) The Incharge of the check-post or the officer empowered under  Sub-section (3), after having given the person incharge 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).

(6) During the pendency of the proceeding under Sub-section (5), if  anybody appears before the Incharge of the checkposl or the officer  empowered under Sub-section (3) and prays for being impleaded as  a party to the case on the ground of involvement of his interest  therein the said Incharge or the officer on being satisfied may permit  him to be impleaded as a party to the case; and thereafter, all the  provisions of this section shall mutatis mutandis apply to him.

(7) The Incharge of the check-post or the officer empowered under  Sub-section (3) may release the goods to the owner of the goods or  to anybody else duly authorised by such owner, it seized and not  already released under clause (c) of sub-section (4), on payment of  the penalty imposed under sub-section (5) of on furnishing such  security for the payment thereof, as such Incharge or officer may  consider necessary.

(8) Where the driver or the person incharge of the vehicle or the  carrier is found guilty for violation of the provisions of Sub-section  (2), subject to the provisions of Sub-section(10), the Incharge of the  check-post or the officer empowered under Sub-section (3) may  detain such vehicle or carrier and after affording an opportunity of  being heard to such driver or person incharge of the vehicle or the

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carrier, may impose a penalty on him as provided in Sub-section (5).

(9) The Incharge of the check-post or the officer empowered under  Sub-section (3) may release the vehicle or the carrier on the payment  of the amount of penalty imposed under Sub- section (8) or on  furnishing such security as may be directed by such Incharge or  Officer.

(10) Where a transporter, while transporting  goods,  is found to be  in collusion  with  a  trader  to  avoid  or  evade  tax,    the   Incharge  

of the check-post or the officer empowered under Sub-section  (3) shall detain the vehicle or carrier of such transporter and  after affording him an opportunity of being heard and with the  prior approval in writing of the Deputy Commissioner  (Administration) having jurisdiction, may confiscate such  vehicle or carrier.

(11) If a transporter fails to give information as required from  him under Clause (d) of Sub-section (2) about the consignor,  consignee or the goods within such time as may be specified or  transports the goods with forged documents, besides imposing  the penalty under Sub-section (5), it shall be presumed that the  goods so transported have been sold in the State of Rajasthan  by him and he shall be deemed to be a dealer for those goods  under this Act.

(12) The provisions of this Act shall for the purpose of levy,  collection and assessment of tax, determination of interest,  payment and recovery of tax and interest, appeal, review or  revision, apply to the transporter deemed to be a dealer under  Sub-section (11)." (emphasis supplied by us)

15      We also quote hereinbelow Rules 53 and 54 of the RST Rules 1995  which read as under: "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  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:-

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(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.

(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 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  ending on 30th June, 30th September, 31st December or  31st 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

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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  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."   

"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.

(2)     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

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18C to his assessing authority every quarter within thirty  days from the close of the quarter.

Explanation: - Quarter means the period of three months  ending on 30th June, 30th September, 31st December and 31st  March.

(3)     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.  

(4)     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.

(5)     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.

(6)     After the existing Form ST 5B and before Form ST 6, the  following Form ST 5C shall be inserted."

16      We also quote hereinbelow Rule 55(3) of the RST Rules 1995 which  reads as under: "55. Delivery of documents and seizure of goods.-

(1)  & (2)      xxx             xxx             xxx

(3) Where, a person-incharge of the goods or the driver, as the  case may be, does not possess any document and declaration  form in respect of the goods in movement, or refuses to deliver  the documents and the declaration form, or the documents and  the declaration form produced appear to be false or forged, the  incharge of the check-post or the officer empowered under rule  52, may get such goods unloaded from the vehicle or the carrier  and seize the same and shall issue a receipt of the goods so  seized in form ST 20."

16A     We also quote hereinbelow Section 68 of the RST Act 1994 which  reads as under: "68. Penalty for other violations. \026 Where any dealer or a  person fails to comply with a direction given by any officer or  authority appointed or constituted under this Act or violates any  of the provisions of this Act or the rules, for which no specific  penalty has been provided elsewhere under the Act or the rules,  the assessing authority or any other officer not below the rank  of Assistant Commercial Taxes Officer as authorized by the  Commissioner, may direct that such person shall pay by way of  penalty a sum not exceeding Rs.2000/- and in the case of  continuing default, a further penalty of Rs.25/- for every day of  such continuance.   

17      We also quote hereinbelow declaration Forms ST 18A and ST 18C  which read as under: "[FORM S.T. 18A] (See Rule 53) DECLARATION FOR IMPORTS BY REGISTERED DEALERS  Counterfoil/Duplicate/Original

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Book No._______                         Serial No.__________                                                 Seal of Issuing Authority

Name of the Office of issue             __________________  Date of issue                           __________________  

To,  

The In-charge Check-post \005\005\005\005.

       Declared and Certified that the goods, particulars of  which are given below, have been imported by me/us from  outside the State for purposes mentioned in rule 53, and hold  myself/ourselves liable for payment of tax as per law to the  Government on the sale thereof.

PART-A (To be filled in by Consignee)

(1) Name and complete                   __________________        address of the Consignor           __________________   

(2) (a) Name and complete               __________________      address of the consignee           __________________   

     (b) R.C. No. of the                       __________________         consignee under                         __________________           RST Act                         __________________         CST Act                         __________________   

(3) Nature of the transaction:-         __________________           (a) Consignment; or             __________________          (b) Depot transfer; or          __________________           (c) Inter-State sale; or                __________________           (d) Any other nature            __________________   

1. Description of the goods             __________________   

PART-B

(To be filled in by the consignor or person authorized)

1.      Price/estimated value of goods in Rs\005\005\005\005\005\005\005.  

2.      Invoice No./Challan No. and date.

3.      (a) Name and full address of the carrier          ("Transport Co. or owner of the vehicle)

       (b) Registration No. of the vehicle __________________  

       I, \005\005..\005\005\005\005\005Proprietor/ Partner/ Director/ Karta/  Manager/ Secretary of M/s.______________ hereby declare  that the facts stated above in PART-A are true to the best of my  knowledge and belief and nothing has been concealed.  I also  undertake the responsibility to get filled up PART-B from the  consignor.

Seal of the consignee or of  the Dealer with  R.S.T./C.S.T. Nos. Signature and status of

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the person signing the  declaration. (emphasis supplied by us)" _________

"COUNTERFOIL ORIGINAL DUPLICATE [FORM S.T. 18C] (See Rule 54) DECLARATION FOR CARRYING GOODS OUTSIDE  THE STATE BY REGISTERED DEALERS  Book No._______                         Serial No.__________                                                 Seal of Issuing Authority

Name of the Office of issue             __________________  Date of issue                           __________________  

To,  

The Check-post In-charge,  \005\005\005\005\005\005\005\005.

       Certified that the goods, particulars of which are given  below by me to \005\005\005\005\005\005. (place) outside the State of  Rajasthan as a result of interstate sale or for sale outside the  State or in the form of branch transfer or by principal to outside  agent or vice versa and I hold myself liable for payment of tax  as per law: -.

1. Name and                                     __________________        address of the Consignor           __________________   

2. Registration No. of the consignor    __________________        under RST Act  and CST Act         __________________

3. Name and                                     __________________        address of the Consignee with      __________________        R.C. No. under                             __________________           RST Act                         __________________         CST Act                         __________________   

4. Nature of the transaction:-          __________________           (a) Inter-State sale                    __________________          (b) Despatch for sale       outside the State          __________________           (d) Any other nature            __________________   

5. Description of the goods             __________________   (a) Taxable goods.                      __________________           (d) Tax Paid goods                      __________________   

6. Quantity of the packages/goods       __________________   

7. Weight of the goods.                 __________________   8. Value/Estimated value of the goods   (in Rs.)______________   

9. Consignor’s invoice/Challan No.      __________________       and Date

10.  (i) Name and full                  __________________         address of the transporter                __________________         (Transport Company or owner       __________________       of the vehicle or carrier.)               __________________  

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         (ii) Registration No. of the              __________________                              vehicle or carrier.                 __________________       

       I, \005\005..\005\005\005\005\005Proprietor/ Partner/ Director/ Karta/  Manager/ Secretary hereby declare that the facts stated are true  to the best of my knowledge and belief and nothing has been  concealed.   

Seal of the consignor with  R.S.T./C.S.T.  Registration Nos.

Date\005\005\005\005\005\005\005\005\005" Signature and status of  the person signing the  declaration. _________

18      Since the RST Act 1954 has been substituted verbatim by the RST  Act 1994 we prefer to analyse the RST Act 1994.

19      The said RST Act 1994 came into force on 1st October 1995.  Section  3 of the RST Act 1994 states that if the turnover of a dealer exceeds  Rs.50,000/- in case he is an importer and if his turnover exceeds  Rs.1,00,000/- in other case, he shall be liable to get registration under the  Act.  Under Section 4, the tax payable by a dealer shall be at a single point in  the series of sales by successive dealers.  Under Section 6, it is stated that in  case of a dealer other than a manufacture or processor whose total accessible  purchases in a year does not exceed Rs.10 lakhs may be allowed by the AO  to pay tax on aggregate basis.  Section 7 refers to payment of self-assessed  tax.  Section 12 refers to levy of tax on the turnover at each point of sale by  the dealer.  Section 13A deals with levy of turnover tax.  Chapter VIII deals  with inspection, search, seizure and anti-evasion provisions.  Under Section  78(1) the Commissioner has the power to set up check-posts at such place  and for such period as may be specified.  Section 78(2) requires the driver or  person incharge of a vehicle or incharge of the goods to carry with him  goods-vehicle record (including challans and bills, despatch memos, bills of  sale and prescribed declaration forms.  Under Explanation (iii) it is  stipulated that for the purposes of Chapter VIII the goods in movement shall  mean the goods which are in possession of the transporter.  Under Section  78(5) the competent officer has to give hearing to the owner or his  representative and after enquiry the competent officer is empowered to  impose on the owner a penalty equal to 30 per cent of the value for  movement of goods in contravention of Section 78(2).   

20      The facts enumerated above in Civil Appeal No.5197 of 2005 is the  lead case in which one finds that the goods in movement were carried with  blank declaration forms though signed by the consignee.  The material  particulars like quality, weight and description of the goods required to be  filled in by the assessee (consignee) were left blank.  Therefore, in this batch  of civil appeals we are concerned with cases where the goods in movement  were carried with blank Form ST 18A.  In our view, 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, in all respects (emphasis  supplied by us).  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 Rule 53(1)(c) the driver of the goods in movement has to carry with

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him documents specified in Section 78(2)(a) as also the declaration form  prescribed in Section 78(2)(a).  Under the said Rule 53(1)(c) the driver is  required to produce the declaration form, suo motu at the check-post at the  time of inspection when the competent officer is required to retain the  original of the declaration form and return the duplicate portion to the driver.   The competent officer shall thereafter forward the original portion of the  declaration to the A.O. of the registered dealer or to the authority which has  issued the declaration form to the consignee.  Under Rule 53(2) the  registered dealer is required to submit a statement of import of goods in the  Form 18A to the A.O. every quarter.  Under Rule 53(4) where a registered  dealer fails to furnish such statement the A.O. or the authority who issued  the declaration forms may impose penalty under Section 68 of the said Act.   Similarly, under Rule 54 of the RST Rules 1994, a dealer who despatches  any taxable goods to a place outside the State is also required to carry  declaration in Form 18C with the goods in movement for export out of  Rajasthan or in the course of interstate trade or commerce.  The dealer is  also required to submit his statement of exports to the A.O. along with his  returns which he files quarterly.  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.

21      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.  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

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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.  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.   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.  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 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.  

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22      In the case of Chairman, SEBI v. Shriram Mutual Fund and  Another \026 (2006) 5 SCC 361, this Court found on facts that a mutual fund  had violated SEBI (Mutual Funds) Regulations, 1996.  Under the said  Regulations there was a restriction placed on the mutual fund on purchasing  or selling shares through any broker associated with the Sponsor of the  mutual fund beyond a specified limit.  It is in this context that the Division  Bench of this Court held that mens rea  was not an essential ingredient for  contravention of the provisions of a civil act.  The breach of a civil  obligation which attracts penalty under the Act would immediately attract  the levy of penalty irrespective of the fact whether the contravention was  made by the defaulter with any guilty intention.  It was further held that  unless the language of the provision intends the need to establish mens rea,  it is generally sufficient to prove the default/contravention in complying  with the statute.  In the present case also the statute provides for a hearing.   However, that hearing is only to find out whether the assessee has  contravened Section 78(2) and not to find out evasion of tax which function  is assigned not to the officer at the check-post but to the A.O. in assessment  proceedings.  In the circumstances, we are of the view that mens rea  is not  an essential element in the matter of imposition of penalty under Section  78(5).

23      We may mention some of the judgments cited on behalf of the  assessees.  Section 28-B of the Uttar Pradesh Sales Tax Act, 1948 came for  interpretation before this Court in the case of Sodhi Transport Co. & Anr.  Etc. Etc. v. State of U.P. & Anr. Etc. Etc. \026 (1986) 1 SCR 939.  In that  case the constitutional validity of Section 28-B of the said Act was  challenged.  It was held by this Court that since Section 28-B created  rebuttable presumption as regards the proof of a set of circumstances, the  effect of such a provision was to shift the burden of proving to the assessee  who was given an opportunity to displace the presumption by leading  evidence.  This judgment has no application because the very words  contained in Section 28-B required the authorities to raise a rebuttable  presumption that the goods must have been sold in the State if the transit  pass was not handed over at the check-post.  In the present case, we are not  concerned with the transit pass.  In the present case, there are no words in  Section 78(5) similar to Section 28-B of the Uttar Pradesh Sales Tax Act,  1948 which states that if the transit pass was not handed over to the officer at  the check-post, the Department would be entitled to raise the presumption  that the goods in transit were sold in the State.  As stated hereinabove, we  have to go by the words used in the section to ascertain whether the  legislature has excluded the element of mens rea .  It is the statutory law  enacted by the competent legislature which can exclude the presumption  under common law.  We hold that Section 78(5) excludes the presumption of  mens rea  which is normally prevailing in common law.  Our reasoning is  also based on one more factor, namely, that Section 78(5) provides a remedy  for recovery of the loss caused to the State by such contravention.   

24      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 \026  (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 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

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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.   

25      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.

26      Before concluding, we may mention that in this batch of civil appeals  we have civil appeals filed by the Department.  These civil appeals relate to  cases where specified documents did not accompanied the goods in  movement.  The lead case in that regard is Civil Appeal No.5240 of 2005 \026  Assistant Commercial Taxes Officer v. M/s. Guljag Industries Ltd. filed  by the Department.  We make it clear that our judgment is basically confined  to cases where blank/incomplete Form 18A/18C had accompanied the goods  in movement.  Whatever we have stated above is in the context of the  incomplete Form 18A/18C travelling along with the goods in movement.   However, Civil Appeal No.5240 of 2005 and such other civil appeals filed  by the State (Department) are those cases where the documents were not  accompanied the goods in movement, like, the bills of sale, bills of transport  etc.  In Civil Appeal No.5240 of 2005 the facts of which have been  reproduced hereinabove, show that the case was confined to documents not  accompanying the goods in movement.  Therefore, the said appeals stand on  a different footing.  They have nothing to do with incomplete forms  travelling along with the goods in movement.  These civil appeals filed by  the State (Department) shall be decided in the light of the judgment of this  Court in D.P. Metals (supra).  However, cases where goods in movement  were accompanied by Form No.18A/18C without duly signed but  incomplete in material particulars like description of goods shall be  governed by the law discussed hereinabove by us.   

27      For the aforestated reasons, we hold that Section 78(5) of the RST Act  1994 (Section 22A(7) of the RST Act 1954) is the section enacted to provide  remedy for loss of revenue and it is not enacted to punish the offender for  committing economic offence and, therefore, mens rea  is not an essential  ingredient for contravention of Section 78(2) of the RST Act 1994.  That, the  breach of Section 78(2) would attract the levy of penalty under Section 78(5)  in cases where the goods in movement have travelled with an incomplete  Form No.18A/18C.  We accordingly uphold the judgment of the High Court  of Rajasthan in Sales Tax Revision No.1023/2002 dated 14.10.03 (which is  annexed as page No.1 of the appeal paper book in Civil Appeal No.5197 of  2005 filed by M/s. Guljag Industries v. Commercial Taxes Officer).

28      In the light of our judgment, we direct the Department to dispose of  the cases in accordance with law enunciated by us hereinabove.  

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Accordingly the matters are remitted back to Commissioner (Appeals) to  decide the matter in accordance with law enunciated by us hereinabove.  The  civil appeals, preferred by the State as well as by the assessees, are  accordingly stand disposed of with no order as to costs.