Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No.5865 OF 2008

Assistant Commercial Taxes Officer … Appellant(s)

                   versus

M/s. Bajaj Electricals Ltd.            … Respondent(s)

J U D G M E N T

S. H. KAPADIA, J.

This  civil  appeal  filed  by  the  Department  is  directed

against the judgment and order dated 1.8.07 passed by the

Rajasthan  High  Court  in  S.B.  Sales  Tax  Revision  Petition

No.114 of 2005 setting aside the penalty under Section 78(5)

of the Rajasthan Sales Tax Act, 1994.

2. On  March  30,  1999  a  truck  coming  from  Delhi  was

intercepted.  The name of the consignor in was M/s. Navyug

Appliances  (India),  Mayapuri,  Delhi.   When the  vehicle  was

stopped for checking at the check-post the driver was directed

to produce bills, bilties, Declaration Form  ST 18A for goods

loaded  in  the  vehicle.   The  statement  of  the  driver  was

recorded.  Show cause notice was issued.  In reply to the show

cause notice the representative  of the respondent (importer)

submitted that the duty for filling in the Declaration Form ST

18A  was  the  responsibility  of  the  transporter  and  the

consignor  and  on  account  of  mistake  on  the  part  of  the

transporter the said Form was not duly filled in.  The A.O.

came to the conclusion that goods were imported without the

Declaration  Form  ST  18A  which  amounted  to  violation  of

Section  78(2)(a)  of  the  Rajasthan  Sales  Tax  Act,  1994  (for

short,  “the  1994  Act”)  read  with  Rule  53  of  the  Rajasthan

Sales Tax Rules, 1995 (for short, “the 1995 Rules”).  Hence, on

the price of the goods of Rs.2,85,000/-, penalty at the rate of

30% to the tune of Rs.85,500/- came to be imposed.

3. Aggrieved by the decision of the A.O. imposing penalty,

the  respondent  carried  the  matter  in  appeal  to  Dy.

Commissioner  (A).   Before  the  Appellate  Authority  it  was

contended on behalf  of  the respondent  that the Declaration

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Form  relating  to  the  goods  was  sent  to  the  consignor  but

through oversight it was left behind and therefore there was

no intention to evade the tax and that the decision of the A.O.

to impose penalty for not carrying Declaration Form ST 18A

with the  goods  was  erroneous  and unjustified,  particularly,

when  bilty,  invoice  etc.  were  there  when  the  vehicle  was

intercepted.  Thus,  blame  was  put  on  the

consignor/transporter. Moreover, during the course of hearing

the respondent had produced the Declaration Form ST 18A

and it was contended that in view of Declaration Form since

produced, the judgment of this Court in the case of  State of

Rajasthan and Another v. D.P. Metals – (2002) 1 SCC 279

stood complied with.  The arguments of the respondent were

rejected by the Commissioner (A) who came to the conclusion

that the above contentions advanced by the respondent were

merely  excuses  as  neither  in  the  reply  to  the  show  cause

notice nor in the enquiry before the AO the respondent ever

produce  the  said  Form  ST  18A  and  that  the  subsequent

production of the form was an after-thought.  The Appellate

Authority further found that there was no affidavit  from the

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transporter  owning  up  the  said  mistake.  For  the

above  reasons,  the  Appellate  Authority  refused  to  interfere

with the penalty order passed by the A.O.

4. Aggrieved  by  the  said  decision  of  the  First  Appellate

Authority, respondent herein moved to Rajasthan Tax Board

in  Appeal  No.326  of  2004.   Before  the  Board,  respondent

contended that it had sent the Declaration Form ST 18A to the

consignor but due to mistake of the transporter who failed to

tag the said Declaration Form with the documents, a mistake

had crept  in.   It  was urged  that  there  was no intention of

evasion of tax.  It was also argued that the cause of action in

the present matter arose on 30.3.1999, i.e., prior to 22.3.2002

when Section  78(5)  stood  substituted,  hence  penalty  under

the  amended  Section  78(5)  could  not  have  been  imposed

against  the  owner  of  the  goods.   The  Board  came  to  the

conclusion  that  the  case  arose  prior  to  22.3.2002  and

consequently  imposition  of  penalty  against  the  owner  was

illegal.  On that point alone the Board set aside the penalty

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and allowed the appeal filed by the assessee.  The Board did

not examine the merits of the case.

5. Aggrieved by the decision of the Board, the Department

preferred  S.B.  Sales  Tax  Revision  Petition  No.114  of  2005

before  the  Rajasthan  High  Court  which  took  the  view  that

since the bill and bilty were found along with the goods at the

time of checking and since the said Declaration Form was sent

by the consignor to the transporter but on account of  bona

fide mistake of the transporter the same was left out, it could

not  be  said  that  there  was  any  intention  to  evade  tax.

Accordingly,  the  High  Court  confirmed  the  decision  of  the

Rajasthan  Tax  Board.   Hence,  this  civil  appeal  by  the

Department.

6. As a matter of preface, we may state that we have come

across number of matters where the Department has sought

to impose penalty under Section 78(2) read with Section 78(5)

of the said 1994 Act.  It appears that in large number of cases

evasion  has  taken  place  on  account  of  the  importer’s

(consignee’s)  failure  to  fill  in  Declaration  Form  ST  18A.

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Moreover,  in  all  these  cases  we  found  that  when  scrutiny

takes place Declaration Form(s) is sought to be produced after

incorporating the details required to be given in that Form.  In

all  these  cases,  Declaration  Forms  are  duly  signed  but

important columns are left blank.  Those columns are filled in

either  when  scrutiny  begins  or  at  the  stage  of

investigation/enquiry.   It  is  important  to  note  that  these

Declaration Forms are similar to Returns under  Income-tax

Act.  We are not on the veracity of the contents of that Form.

Our preface is confined to the importer’s (consignee’s) refusing

to supply particulars which they are required to give in the

Declaration Form(s).  We have come across numerous cases

where columns are left  blank.   The Forms are duly signed.

However, relevant columns are left blank.  It is important to

note the significance of Declaration Form ST 18A.  The said

Form is in two parts.  In one part information is required to be

given by the consignee,  in the other part details have to be

given by the consignor, however, it is the responsibility of the

consignee  to  see  that  the  consignor  supplies  the  requisite

information.  The quantum of taxable turnover is dependent

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on the declaration made by the consignee in Declaration Form

ST 18A.  We regret  to say that hundreds of such cases are

arising each year under the said 1994 Act.  It appears that the

State is losing revenue on account of the consignee’s failure to

supply particulars in the prescribed Declaration Form.  This is

one such case.   

7. In  the case  of  M/s. Guljag Industries v. Commercial

Taxes Officer – (2007) 7 SCC 269, this Court has interpreted

Section 78(2) of the 1994 Act and Section 78(5) thereof.   In

that case a vehicle was checked in which certain goods were

being transported from a place in Andhra Pradesh.  The goods

were  accompanied  by outward gate  pass and invoice  which

indicated the name of the consignor and the consignee.  Along

with the said goods Form ST 18A was also found.  That form

was duly signed, however, it did not indicate the description of

the goods transported.  Therefore, the A.O. held that there was

contravention  of  the  provision  of  Section  22A(3)  of  the

Rajasthan Sales Tax Act, 1954 (for short, “the 1954 Act”).  He

accordingly issued show cause notice to the appellant under

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Section  22A(7)  to  show  cause  why  penalty  should  not  be

imposed for violation of Section 22A(3)  of  the 1954 Act.  In

that  case  also  the  consignee  (importer)  pleaded  mistake  in

filling the Declaration Form.  The consignee (importer) pleaded

lack of knowledge of Hindi language.   The A.O. rejected the

explanation and imposed penalty under Section 22A(7) of the

1954 Act.  The consignee (importer) failed before the Appellate

Authority.   When the matter was pending in second appeal

before  the  Rajasthan  Tax  Board,  the  said  1954  Act  was

replaced  by  the  1994  Act.   The  Tax  Board  held  that  the

burden was on the Department to establish guilty mind (mens

rea) on the part of the consignee.  Accordingly, the appeal was

allowed.   Thereafter  revision  petition  was  filed  by  the

Department.  By the impugned judgment, the High Court held

that  mens rea was not a  sine qua non for levying penalty in

case  of  contravention  of  Section  22A(3)  of  the  1954  Act

(Section 78(2)  of  the 1994 Act).   Even on facts,  High Court

held  that  not  filling  the  Form  was  a  deliberate  act  which

indicated, in any event, an intention of the consignee to evade

the  tax.   Therefore,  in  that  matter,  the  consignee  filed  its

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appeal  by  special  leave  in this  Court.   After  examining  the

scheme  of  Section 22A(3)  of  the 1954 Act,  Rule  62A of  the

Rajasthan  Sales  Tax  Rules,  1955  as  well  as  provisions  of

Section  78(2)  and  Section  78(5)  of  the  1994  Act  read  with

Rules 53 and 54 of the Rajasthan Sales Tax Rules, 1995, this

Court  held  inter  alia that  mens  rea  was  not  necessary  for

liability of penalty under Section 78(5) of the 1994 Act.  It was

held that transport of goods in movement with the prescribed

Declaration  Form  duly  signed  but  without  giving  material

particulars  would  automatically  attract  levy  of  penalty  for

breach of Section 78(2) of the 1994 Act.  It was further held

that even if  mens rea   constituted an essential ingredient of

the offence under Section 78(2) even then the fact of not giving

particulars  in  the  Declaration  Form  duly  signed  by  the

consignee per se  would amount to evasion of tax because the

modus  operandi  adopted  by  the  consignee  itself  indicated

mens rea.  In that matter heavy reliance was placed by the

consignee  (appellant)  on  the  judgment  of  this  Court  in  the

case of D.P. Metals (supra).  The same judgment is also once

again  relied  upon  before  us  in  the  present  case  by  the

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respondent.   The  judgment  in  D.P.  Metals  (supra)  has  no

application.   The  case  of  D.P.  Metals  (supra)  was  not

concerned  with  blank  Declaration  Form  ST  18A  travelling

along  with  the  goods  in  movement.  In  that  matter,  the

question of interpretation of Section 78(5) did not arise. It was

a case in which validity of Section 78(5) was challenged on the

ground of  it  being beyond legislative  competence,  excessive,

arbitrary and unreasonable and therefore violation of Articles

14, 19(1)(a), 301 and 304 of the Constitution.

8. For  the  sake  of  convenience  we  reproduce  important

paragraphs from the  judgment  of  this  Court  in  the  case  of

M/s. Guljag Industries (supra)  as in our view the judgment

in  M/s.  Guljag  Industries  (supra)  squarely  applies  to  the

present case:  

“9 Existence  of  mens  rea is  an essential  ingredient  of  an offence.  However,  it  is  a rule of construction.   If  there is  a conflict between the common law and the statute law, one has to  construe  a  statute  in  conformity  with  the  common  law. However, if it is plain from the statue that it intends to alter the course of the common law, then that plain meaning should be accepted.  Existence of  mens rea is an essential ingredient in every offence;  but  that  presumption is  liable  to  be displaced either by the words of the statute creating the offence or by the subject matter with which it deals.  A penalty imposed for a tax

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delinquency is a civil obligation, remedial and coercive in its nature, and is different from the penalty for a crime.

24. Form 18A, as quoted above, is in two parts.  Part-A  has to be filled in by the consignee.  Part-B has to be filled in 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.

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25. 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.   26. 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  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.   

27. 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.

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28. 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.   

29. 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

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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.

32. 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 – (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

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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 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.   

33. 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.”

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9. Reading  the  judgment  in  the  case  of  M/s.  Guljag

Industries (supra), two points are very clear.  That judgment

rules out  mens rea  as an essential ingredient of the offence

under  Section  78(2)  for  which  penalty  is  imposed  under

Section 78(5).    At the same time,  the said judgment, vide

Para 28, holds that even if mens rea  constituted an essential

ingredient of an offence still the  modus operandi adopted by

the consignee  of  not giving particulars in the Form ST 18A

per se   indicated  mens rea (intention to evade taxes).  In the

said  judgment  we have  also  distinguished  the  case  of  D.P.

Metals (supra) vide para 33.  Lastly, we may state that in the

case  of  M/s.  Guljag  Industries  (supra)  the  vehicle  was

intercepted  on  21.1.95;  the  enquiry  was  made  for

contravention  of  Section  22A(3)  of  the  1954  Act;  and  the

penalty was imposed under Section 22A(7)  of  the 1954 Act.

Therefore, it is wrong to suggest, as it sought to be done by

the  respondent  herein,  that  the  judgment  of  this  Court  in

M/s. Guljag Industries (supra) has no application to the facts

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of  the  present  case  as  the  cause  of  action  arose  prior  to

22.3.2002.  Therefore, in our view the judgment in the case of

M/s. Guljag Industries (supra) is squarely applicable to the

present case.

10. One  additional  submission  is  made  on  behalf  of  the

respondent.  It is urged that  M/s. Guljag Industries (supra)

proceeded  on  the  basis  of  the  law  as  it  stood  after  the

amendment made to Section 78(5) of the 1994 Act by Act 7/02

by which the  entity  which is  sought  to  be  penalized  is  the

owner of the goods or a person authorized in writing by such

owner or the person in-charge of the goods.  According to the

respondent herein, in the present case the interception of the

truck  took  place  on  30.3.99  and  consequently  Act  No.7  of

2002 dated 22.3.2002 did not apply to the present case.  In

this  connection  respondent  stated  that  Section  78(5)  as  it

stood before 22.3.2008  inter alia stated “the in-charge of the

checkpost  or  the  officer  empowered  under  sub-section  (3),

after  having  given  the  person  in-charge  of  the  goods a

reasonable opportunity of being heard and after having held

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such enquiry  as he may deem fit,  shall  impose  on him for

possession or movement of goods a penalty at the stipulated

rate”.   Therefore,  according  to  the  respondent  herein  the

subsequent  amendment  by  Act  No.7  of  2002  had  no

application to this case.

11. To answer the above contention, we need to quote  the

following  provisions  from the  1954  Act,  the  1994  Act  as  it

stood prior to 22.3.2008, the provision of the 1994 Act after

22.3.  2008,  the  rules  framed under  the  1954 Act,  the  rule

framed under 1994 Act as also the Statement of Objects and

Reasons for enacting Act No.7 of 2002:

“(a)       Provisions contained in the 1954 Act   :  

Section  22A.  Establishment  of  check-post  or  barrier  and inspection of goods while in transit.-

(3) The  owner  or  person  in-charge  of a  vehicle,  boat  or animal shall carry with him a goods vehicle record, a tripsheet or a log book, as the case may be, and such other document, as may be prescribed in respect of the goods carried in or on the vehicle, boat or animal, as the case may be, and produce the same before any 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

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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.

(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,

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

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.”                                        (emphasis supplied)

Provisions contained in the 1955 Rules:

“Rule (62A) Documents prescribed under section 22A(3) –  

(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

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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 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

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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

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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 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.”                                                 (emphasis supplied)

“Rule 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.

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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 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.

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(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.

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(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 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

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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 –  

(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

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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 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, having 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.”                                                   (emphasis supplied)

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(b)         Provisions contained in the 1994 Act   :

“Section  78. ESTABLISHMENT  OF  CHECK-POST AND  INSPECTION  OF  GOODS  WHILE  IN MOVEMENT: -

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

(a) direct the driver or the person in charge of the vehicle or carrier of the goods not to part with the goods in any manner  including  by transporting  or  re-booking,  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 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  course  of  the  proceeding  if  the adequate security of the amount equal to the estimated value of the goods is furnished.

(5) The in-charge of the checkpost or the officer empowered under Sub-section (3), after having given the person in-charge of the goods a reasonable opportunity of being heard and after having held such enquiry as he may deem fit, shall impose on him for possession or movement of goods, 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.”                                                 (emphasis supplied)

Rules 53 and 54 of the 1995 Rules :

“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

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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:-

(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.

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(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

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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 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

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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.”     (emphasis supplied)

“Rule 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.

(1) 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 18C to his assessing authority every quarter within thirty days from the close of the quarter.

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

(2) 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.  

(3) 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.

(4) 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.

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

(c) Statement of Objects and Reasons for enacting Act No.7 of 2002 :

“A.    Amendment in the Rajasthan Sales Tax Act, 1994:

A dealer applying for provisional and voluntary registration is required to make payment of fee of Rs.  100/-.  With  the  use  of  computers  and  other modern  techniques  and  other  cost  factors,  the registration fee fixed about half a decade age needs upward revision. With this objective sub-sec. (3) of Sec. 17 has already been amended in March, 2001. In consonance with the said amendment, sub-sec. (1) of Sec. 18 and sub-sec. (1) of Sec. 19 providing for the fee for provisional registration and voluntary registration  respectively,  are  required  to  be amended  to  empower  the  State  Government  to

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prescribe such fee in accordance with the prevalent circumstances.

Section 71 provides for the prosecution of any person in the contingencies specified in sub-sec. (1). As  per  clause  (e)  of  sub-sec.  (1),  prosecution  for deliberately  disregarding  the  notice  issued  by  the Assessing  Authority  for  recovery  of  demand, prosecution  can  be  launched.  However,  similar power are not available  for the non-compliance of the notice issued by the Commissioner u/s. 93 of the  Act  to  call  for  certain  information.  Therefore, clause (e) of sub-sec. (1) of Sec. 71 is proposed to be amended.

To protect the interest of the consumer,   it is being proposed to make it mandatory to issue bill or cash  memorandum  by  every  registered  dealer  on each sales of goods, other than the exempted goods, of value of rupees two hundred or more. Failure to do so will incur penalty of a sum equal to five times of the amount of tax leviable on the sale in question or rupees five hundred,  whichever is higher. With these objectives the existing Sec. 76 is proposed to be suitably amended.

To  have  a  check  on  the  evasion  of  tax  by unscrupulous  dealers/transporters  by  non- disclosure of the details of the goods at the nearest border  check-posts  established  under  sub-sec.  (1) of Sec. 78, the existing clause (b) of the Sec. 78 is being amended to make it mandatory to bring the vehicle or carrier at the nearest border check-post while entering or leaving the State. Failure to do so has been made subject to penalty by adding a new sub-sec. (10-A) in Sec. 78.

While  filing  first  appeal,  the  appellant  is required to deposit the admitted amount of tax or other admitted amount or ten per cent of the tax or

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the other amount assessed and in case of an appeal from an ex-parte assessment order five per cent of the tax or the other amount assessed, whichever is higher.  The  section  is  proposed  to  be  amended suitably to encourage rightful appeals to be filed.

Section  87  provides  for  power  of  revision  to Commissioner  in  case  an  order  passed  by  the subordinate  authorities  is  erroneous  as  well  as prejudicial to the interest of the revenue. Both these conditions have to be satisfied for exercising these powers.  Even  in  case  of  patently  erroneous  order passed  by  such  authorities  cannot  be  questioned except at the appellate forum, which may result in substantial  delay  in  getting  the  grievances redressed.  Therefore,  by  amending  sub-sec.  (1)  of Sec. 87 of the Act, it is proposed that the powers of revisions can be exercised on fulfillment of either of the above two conditions.

As  per  present  provisions  of  sub-sec.  (2)  of Sec. 93 the Commissioner can ask for submission of  specific  information  from dealers  but  not  from other  persons.  For  effective  enforcement  of  the provisions  of  the  Act,  it  is  proposed  to  include words ‘any person’ in the aforesaid sub-section.”                                                      (emphasis supplied)

(d) Provisions of Section 78(5) after its amendment by Act No.7 of 2002 :

“Section  78. ESTABLISHMENT  OF  CHECK-POST AND  INSPECTION  OF  GOODS  WHILE  IN MOVEMENT: -

(5)    The in-charge of the check-post or the officer empowered under sub-section (3), after having given the owner of the goods or a person authorized in writing by such owner or the person in- charge  of  the  goods  the  person  incharge  of  the  goods  a

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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.”

(emphasis supplied)

12. As stated above, it is the case of the respondent herein

that under Section 78(2) and under Section 78(5) penalty was

leviable after due opportunity only on “the person in-charge of

the goods” under the 1994 Act and since this case arose out of

cause of action when the truck was intercepted on 30.3.99,

respondent who is the owner of the goods cannot be penalized

under unamended Section 78(5) of the 1994 Act.  We do not

find merit in this argument.   

13. Let  us  examine  the  scheme  of  Section  78  of  the  said

1994 Act prior to 22.3.2002.  Under Section 78(2) the driver or

the  person  in-charge  of  a  vehicle  or  carrier  of  goods  in

movement had  to  carry  with  him  goods-vehicle  record

including challans, bilties, bills of sale despatch memos  and

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declaration in Form ST 18A. Under Section 78(4) where any

goods  in  movement  travel  without  the  above  documents

(including  Form  ST  18A)  or  if  the  documents  produced

appeared to be false or forged then the in-charge of the check-

post may inter alia seize the goods for reasons to be recorded

in writing or direct the person in-charge of the vehicle not to

part  with the goods in any manner  or to  release  the  goods

seized  to  the  owner  of  the  goods.   Therefore,  there  was  a

dichotomy  between  the  person  in-charge  of  the  vehicle  or

carrier of goods in movement under Section 78(2) on the one

hand and the owner of the goods under Section 78(4) on the

other hand.  However, under Section 78(5) the in-charge of the

check-post  after  having  given  the  person  in-charge  of  the

goods a  reasonable  opportunity  of  being  heard  and  after

having held such enquiry as he may deem fit, shall impose on

him for possession or movement of goods in violation of the

provisions of Section 78(2)(a)  a penalty equal  to 30% of the

value of such goods.  If one reads sub-section (5) of Section 78

in its entirety with Rule 53 of the 1995 Rules, it is clear that

penalty was liable to be imposed for importation of any taxable

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goods  for  sale  without  furnishing a declaration in Form ST

18A  completely  filled  in  all  respects.   The  duty  to  fill  and

furnish the said Form is imposed on the purchasing dealer.

Therefore, Section 78(5) as it stood prior to 22.3.02  imposed

penalty if possession or movement of goods took place inter

alia in breach of  Section 78(2)(a)  on “the person in-charge”,

which included the owner. In this connection it may be noted

that sub-section (5) comes after sub-section 4(c) which talks

about release of the goods to “the owner of the goods” on his

giving of adequate security. It is the owner (importer) who has

to fill in the Form ST 18A. It is the owner who is entitled to

seek release under Section 78(4) on giving security. It is the

owner  who  is  entitled  to  hearing  under  Section  78(5)  and,

therefore,  the  expression  “person  in-charge  of  the  goods”

under Section 78(5) would include the owner. Moreover, under

Section  78(2)  the  words  used  are  “person  in-charge  of  a

vehicle or carrier of goods in movement” whereas the words in

Section  78(5)  which  comes  after  sub-section  (4)  refers  to

“person in-charge of the goods”. The words “in movement” do

not find place in Section 78(5) and therefore the expression

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“person  in  charge  of  goods”  under  Section 78(5)  was  wider

than the expression “person in charge of goods in movement”

under Section 78(2)(a). Consequently, the expression “person

in-charge of the goods” under Section 78(5) who is given an

opportunity of being heard in the enquiry would include the

“owner of the goods”.  

14. Therefore, in our view, the judgment of this Court in the

case of M/s. Guljag Industries (supra) would squarely apply

to the facts of the present case.  In fact, our view in the case of

M/s.  Guljag  Industries  (supra)   finds  support  from  the

amendment made in Section 78(5) vide Act No.7 of 2002 w.e.f.

22.3.2002 by which the expression “person in-charge of the

goods” under the old Section 78(5) is substituted by the words

“the owner of the goods or a person authorized in writing by

such owner or person in-charge of the goods”.  It is once again

emphasized  that  Act  No.7  of  2002  is  an  exercise  in

substitution.   Therefore,  the Legislature seeks  to clarify the

expression  “person  in-charge  of  the  goods”  occurring  in

Section 78(5) as it stood earlier by Act No.7 of 2002. In fact, it

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is  interesting to note that even under Section 22A(3)  of  the

1954 Act, penalty was leviable on the “owner of the goods” for

possession of goods not covered by the Goods Vehicle Record

[including Declaration under Section 22A(3)].

15. Before concluding, on facts, we may point out that before

the A.O. the respondent contended that filling of the Form ST

18A  was  the  responsibility  of  the  transporter  and  the

consignor (which argument presupposes that respondent had

not filled the particulars in the Form ST 18A) whereas before

the Dy. Commissioner (A) a Form was produced purportedly

sent to the consignor which was not accepted.  According to

the Commissioner (A) it was an after-thought.  Before the Tax

Board it was submitted by the respondent that a blank Form

was sent to the consignor.  In view of the above prevarication

we hold that the Dy. Commissioner (A) was right in holding

that all the above excuses are trotted out as an afterthought.

Even the production of the Form before the Dy. Commissioner

(A) was an afterthought.  Under the 1995 Rules, the consignor

is  required  to  give  the  said  Form  duly  filled  in  when  the

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consignment is ordered.   The consignee has to see that the

Form is given to the transporter with the complete details duly

filled in by the consignor.  If one sees the Form it is clear that

it shall be the duty of the consignee or his agent (transporter)

to see that the consignor fills the Form.  Therefore, on facts we

are  satisfied  that  the  said  Form in  ST 18A  though  signed,

remained  incomplete.   The  details  required  were  never

supplied.  Hence penalty was correctly levied under Section 78

(5) of the 1994 Act.   

16. For the aforestated reasons, we set aside the impugned

judgment and allow Department’s civil appeal with no order as

to costs.     

……………………………J.                                    (S.H. Kapadia)

……………………………J.                                               (B. Sudershan Reddy)

New Delhi; November  6, 2008.

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