- (1.) This Larger Bench of three Judges has been constituted, to resolve and decide the following questions, referred by a learned Single Judge vide his order dated 16.01.2006, framed after noticing a conflict of opinions in the Division Bench judgments of this Court in M/s. Parasnath Granite India Ltd. Vs. State of Rajasthan & Another, 2005 1 RLR 291(D.B. Civil Writ Petition No.4250/1998), decided on 02.06.2004, and in M/s Maharana Talkies Vs. State of Rajasthan & Others(D.B. Civil Special Appeal No.858/1994), reported in (2004) 19 Sales Tax Today 239, decided on 29.11.2004, as well as M/s. Lalji Mulji Transport Company Vs. State of Rajasthan, 2002 3 RLR 255, as follows:- "(i) Whether requirement of mens rea is relevant for the purpose of determining the liability for penalty in terms of Section 78 sub-section(5) of the Rajasthan Sales Tax Act, 1994" (ii) Whether the mens rea is required to be proved as a necessary ingredient for imposition of penalty under sub-section(5) of Section 78 on proven violation of sub-section (2) of Section 78 of the Rajasthan Sales Tax Act, 1994? (iii) Whether in view of the amendment to Rule 55 of the Rajasthan Sales Tax Rules, 1995 pursuant to the decision of the Hon'ble Supreme Court in the case of State of Rajasthan and Another Vs. M/s. D.P. Metals, on sufficient cause being shown whether any authority empowered would be justified in not imposing the penalty in the absence of mens rea being proved? (iv) Whether the mens rea is required to be proved as a necessary ingredient for imposing of penalty under sub-section (5) of Section 78 on proved violation of sub-section (2) of Section 78 of the Rajasthan Sales Tax Act, 1994?
(2.) Section 78 of the Rajasthan Sales Tax Act, 1994 (for short, 'the RST Act, 1994'), provides for establishment of check-post and inspection of goods while in movement. It is a complete code for establishment of check-posts, inspection of goods, seizure, release and imposition of penalty on the illegal and unauthorized movement of goods, for avoiding the levy, collection and assessment of tax. The provisions of Section 78 of the RST Act, 1994, are quoted as below:- "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 checkpost 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 checkpost by way of inspection of documents produced and goods being moved, shall be its in charge. (2) The driver or the person in charge of a vehicle or carrier 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 checkpost set up under sub-section (1); (c) produce all the documents including prescribed declaration forms relating to the goods before the in charge of the checkpost; (d) give all the information in his possession relating to the goods; and (e) allow the inspection of the goods by the in charge of the check post or any other person authorised by such in charge. Explanation.- 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. [(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 person 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 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 or 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 1[thirty percent of the value of such goods]. (6) During the pendency of the proceeding under sub-section (5), if anybody appears before the in-charge of the checkpost 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 in-charge or the officer on being satisfied may permit him to be impleaded as a party to the cases; and thereafter, all the provisions of this section shall mutatis mutandis apply to him. (7) The in-charge of the checkpost 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, if seized and not already released under clause (c) of sub-section (4), on payment of the penalty imposed under sub-section (5) or on furnishing such security for the payment thereof, as such in-charge or officer may consider necessary. (8) Where the driver or the person In-Charge 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 in-charge of the checkpost 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-in-Charge of the vehicle or the carrier, may impose a penalty on him as provided in sub-section (5). (9) The in-charge of the checkpost 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 in-charge or officer. (10) Where a transporter, while transporting goods, is found to be in collusion with trader to avoid or evade tax, the in-charge 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. [(10-A] Notwithstanding anything contained in this section, where the driver or the person incharge of the vehicle or the carrier abstained from bringing or stopping the vehicle or carrier at the nearest check-post as provided under clause(b) of sub-section (2), 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 the owner or a person duly authorised by such owner or the driver or the person in-charge of the vehicle or carrier, may impose a penalty equal to fifty percent of the value of such goods.] [(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)]."
(3.) Rules 55 and 55-A of the Rajasthan Sales Tax Rules, 1995 (for short, 'the RST Rules, 1995'), made in exercise of the powers conferred by Section 99 of the RST Act, 1994, provide for delivery of documents and seizure of goods and mode of furnishing information at Check-Posts. The provisions of Rules 55 and 55-A of the RST Rules, 1995, are in aid of provisions of Section 78. Rules 55 and 55-A of the RST Rules, 1995, are quoted as below:- "55. Delivery of documents and seizure of goods:- (1) The owner or the person in charge of the goods and their absence, the owner or the driver of the vehicle, shall deliver the documents and declaration forms as provided in clause (a) of sub-section (2) of section 78, to the incharge of the nearest check-post. If the goods in movement are not accompanied with complete documents and declaration forms, the incharge of the check-post shall afford an opportunity, to any of the above referred persons, to produce the required documents and/or declaration forms completed in all respect, when the goods enters or leaves the near check-post of the State. [1A)] On being asked by the Incharge of the check-post or by the officer empowered under rule 52, the person incharge of the goods, or in his absence, the driver of the vehicle or the carrier, shall deliver the documents and declaration form to such Incharge or officer, as provided in clause (a) of sub-section (2) of section 78. (2) Where any direction is issued in clause (a) of sub-section (4) of section 78, the Incharge of the check-post or the officer empowered under rule 52, shall complete the verification or enquiry within 7 days from the date of issue of the direction and take a view for action, if any, as warranted by the circumstances of the case. (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 forms, or the documents and the declaration forms 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. (4) Where the goods are seized, the Incharge of the check-post or the officer empowered under rule 52 shall serve a notice on the person incharge of the goods or the vehicle or the carrier, or the owner of the goods, if present, as the case may be requiring him to show cause within 7 days from the date of service of the notice as to why the documents and declaration as referred to in sub-rule (1A), were not produced or why the correct particulars were not furnished, at the time of checking. If the said Incharge of the check-post or the empowered officer is satisfied with the reply, or the penalty imposed under sub-section (5) of section 78 has been paid, or a security as may be demanded in lieu of such amount of penalty has been furnished, he shall release the goods and deliver the same to the owner of the goods or to anybody else duly authorised by such owner, after obtaining an acknowledgment to that effect. (5) Where the goods seized are subject to speedy and natural decay, and in the case of other goods where no compliance of the requirement of sub-rule (4) is made within three months from the date of service of the notice, the Incharge of the check-post or the empowered officer with the written approval of the Deputy Commissioner (Administration) having jurisdiction, may sell such goods in open auction in accordance with the procedure laid down and the instruction issued by the Commissioner. (6) The sale proceeds received under sub-rule (5) shall be deposited in the Government account. (7) Any person entitled to such sale proceeds shall, on an application to the Deputy Commissioner (Administration) referred to in sub-rule (5), be paid the sale proceeds, referred to in sub-rule (6), after deducting therefrom the amount of penalty due in respect of the goods seized and auctioned, the amount of interest, if any, the expenses of the sale and other incidental charges." 55.A. Mode of furnishing information of Check-Posts.- (1) The information required under sub-section (2) of section 78 may also be supplied in such digital, electronic or encoded manner as may be notified by the State Government. (2) The digital, electronic or encoded formats so notified shall have same legal status as documents required under sub-section (2) of section 78 and the provisions of section 78 shall apply mutatis mutandis when the information is supplied in such digital, electronic or encoded formats. (3) The State Government may notify a fee for processing the information supplied under section 78 or under this rule. This fee shall be payable by the owner of the truck or the person in charge of the goods at the time of entry of such goods into the State of leaving the State of Rajasthan.]";