Holding

A blank but signed Declaration Form ST 18A/18C violates s.78(2) and justifies the imposition of penalty under s.78(5); the owner is included within the term "person in‑charge of the goods," and the 2002 amendment merely clarifies this without affecting liability.

Summary

The Department (Assistant Commercial Taxes Officer) appealed against a High Court order that set aside a penalty imposed on M/s. Bajaj Electricals Ltd for transporting goods with a blank but signed Declaration Form ST 18A/18C. The vehicle was intercepted on 30‑03‑1999; the form lacked material particulars despite being signed by the consignee. The Assessing Officer had levied a penalty under s.78(5) of the Rajasthan Sales Tax Act, 1994, finding a breach of s.78(2). The assesse argued that the form was the consignor’s responsibility, that the omission was inadvertent, and that the amendment to s.78(5) (effective 22‑03‑2002) did not apply. The Supreme Court held that a blank declaration form constitutes a violation of s.78(2) and attracts penalty under s.78(5); the amendment merely clarified that the "person in‑charge of the goods" includes the owner, and does not exempt the assesse. The Court rejected the excuses and upheld the penalty. The civil appeal was allowed, reinstating the penalty.

Issues considered

Whether a signed but materially blank Declaration Form ST 18A/18C amounts to a contravention of s.78(2) of the Rajasthan Sales Tax Act, 1994.
Whether such contravention attracts penalty under s.78(5) of the same Act.
Whether the amendment to s.78(5) by Act No. 7 of 2002 (effective 22‑03‑2002) is applicable to facts occurring on 30‑03‑1999.
Whether the owner of the goods can be deemed the "person in‑charge of the goods" for purposes of s.78(5).
Whether the explanations that the transporter or consignor were responsible constitute a valid defence.

Legislation cited

Rajasthan Sales Tax Act, 1994s. 78(2), s. 78(5)

Subjects

sales taxpenaltydeclaration formstrict civil liabilityRajasthan Sales Tax Acts.78blank declarationgoods in movementcivil liability

Judgment

[2008] 15 S.C.R. 513 513

ASSISTANT COMMERCIAL TAXES OFFICER A
... v.
M/S. BAJAJ ELECTRICALS LTD.
(Civil Appeal No. 5865 of 2008)
NOVEMBER 6, 2008
B
[S.H. KAPADIA AND 8. SUDERSHAN REDDY, JJ.]

Rajasthan Sales Tax Act, 1994- s.78(5)- Penalty.under
,t - Incomplete/blank declaration Form ST 1BA, signed by the
consignee accompanying goods in movement - Held: c
Amounts to contravention of s. 78(2) - Penalty imposable
under s. 78(5) - The amendment made in s. 78(5) by which
expression " person in-charge of the goods" under the old
s. 78(5) was substituted by the words "the owner of the goods
or a person authorized in writing by such owner or person in- 0
charge of the goods" was c!arificatory in nature - Rajasthan
y Sales Tax Rules, 1995 - Rule 53.

' The case of department was that on 30.3.1998, a
vehicle was intercepted. At the time of checking of the
vehicle at the check post, the driver produced signed but
E
a blank Declaration Form ST 18A, with the goods in
movement. The important columns were left blank and
material particulars were not given. The Assessing Officer
(A.O.) imposed penalty holding that there was violation
of s.78(2)(a) of Rajasthan Sales Tax Act, 1994 r.w. Rule 53 F
of the Rajasthan Sales Tax Rules, 1995.

Before the Appellate Authority, it was contended by
respondent-assessee that the Declaration Form relating
to the goods was sent to the consignor but through G
oversight it was left behind and there was no intention
to evade the tax. However, during the course of hearing,
,,.....,._ the assessee produced the Declaration Form ST 18A.
The Appellate Authority held that the contentions
513 H
514 SUPREME COURT REPORTS [2008] 15 S.C.R.

A advanced by the assessee were merely excuses as
neither in the reply to the show cause notice nor in the
enquiry before the A.O., the assessee ever produced the
said Form ST 18A and the subsequent production of the
form was an after-thought.
B
The Tax Board held that the cause of action arose
prior to 22.3.2002 when s.78(5) stood substituted and
consequently imposition of penalty under amended
s. 78(5) against .the owner was illegal. High Court
confirmed the decision of Tax Board. Hence the instant
C appeal.

Allowing the appeal, the Court

HELD:1.1. Part-A of Declaration Form 18A has to be
0 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.
E Part-B requires the consignor to give the estimated value
of goods. He has also to give invoice number and the
date. The entire form was left blank though it was signed
by the consignee. Therefore, the declaration given by the
consignee was meaningless. There were no facts given
in Part-A. There was no identity or description of the
F goods transported. The original was 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.
Such practice has resulted in loss of revenue in crores
G to the State. Without description of the goods imported,
it is easy to manipulate the value. If material particulars
are not submitted, assessment could not be finalized.
.·
Since the goods in movement were not supported by
duly filled in Form No.18A/18C, there was contravention
H · of s. 78(2) of the Rajas than Sales Tax Act,

'
':'-
'
-
mi.

ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ
ELECTRICALS LTD .
515

.... 1954. (Para 8] [523-F, G; 524-A-E] A

1.2. There is dichotomy between contravention of
s.78(2) of the 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 B
are carried without the declaration Form No.18A/18C then
strict liability comes in, in the form of s.78(5) of the Act.
JI t Breach of s.78(2) imposes strict liability under s.78(5)
because goods in movement cannot be carried without
Form No.18A/18C. (Para 8] [524-F, G] c
1.3. It is not the object of the s.78(5) to punish the
offender for having committed an economic offence and
to deter him from committing such offences. The penalty
imposed under the said s.78(5) is a civil liability. Willful
D
consignment is not an essential ingredient for attracting
'(
~ the civil liability as in the case of prosecution. S.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 s.78(5) provides for imposition
of monetary penalty for non-compliance. [Para 8] (525-C, E
D]
Mis. Gu/jag Industries v. Commercial Taxes Officer
(2007) 7 sec 269, relied on.
·~
2.1. Prior to 22.3.2002, under s. 78(2), the driver or the F
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 declaration in Form ST 18A. Under s.78(4), where any
goods in movement travel without these documents G
(including Form ST 18A) or if the documents produced
~
appeared to be false or forged then the in-charge of the
check-post could 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 H
516 SUPREME COURT REPORTS [2008] 15 S.C.R.
!-

A 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 s.78(2) on the one hand and the owner of the
goods under s.78(4) on the other hand. However, under
B s,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
c provisions of s.78(2)(a) a penalty equal to 30% of the
value of such goods. If one reads sub-section (5) of s.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 goods for sale without furnishing a
declaration in Form ST 1BA completely filled in all
0
respects. The duty to fill and furnish the said Form is
imposed on the purchasing dealer. Therefore, s.78(5) as
it stood prior to 22.3.02 imposed penalty if possession or
movement of goods took place in breach of s.78(2)(a) on I
' .
"the person in-charge", which included the owner. It is
E the owner (importer) who has to fill in the Form ST 18A.
It is the owner who is entitled to seek release under
s.78(4) on giving security. It is the owner who is entitled
to hearing under s.78(5) and, therefore, the expression
"person in-charge of the goods" under s.78(5) would
F include the owner. Moreover, under s.78(2) the words
used are "person in-charge of a vehicle or carrier of
goods in movement" whereas the words in s.78(5) which
comes after sub-section (4) refers to "person in-charge
F
of the goods". The words "in movement" do not find
G place in s.78(5) and therefore the expression "person in
charge of goods" under s.78(5) was wider than the
expression "person in charge of goods in movement"
under s.78{2)(a). Consequently, the expression "person
in-charge of the goods" under s.78(5) who is given an
H opportunity of being heard in the enquiry would include
"'
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 517
ELECTRICALS LTD.

··.the "owner of the goods;'. [Para 13] [553-D-H; 554-A, F] A

2.2. The amendment was made in s.78(5) by Act No.7
of 2002 w.e.f. 22.3.2002 by which the expression "person
in-charge of the goods" under the old s.78(5) is
substituted by the words "the owner of the goods or a 8
person authorized in writing by such owner or person in-
charge of the goods". The Act No.7 of 2002 is an exercise
/ , ~ in substitution. The Legislature sought to clarify the
expression "person in-charge of the goods" occurring in
s.78(5) as it stood earlier by Act No.7 of 2002. [Para 14] C
[554-G, H; 555-A]

State of Rajasthan and Anr. v. D.P. Metals (2002) 1 SCC
279, held inapplicable.

3. Before the A.O., the respondent-assessee o
contended that filling of the Form ST 18A was the
responsibility of the transporter and the consignor (which
argument presupposed that respondent had not filled the
particulars in the Form ST 1SA) whereas before the
Appellate Authority, it was contended that the Form was E
purportedly sent to the consignor. The Appellate Author.ity
was right in holding that these excuses are trotted out as
an afterthought. Even the production of the Form before
the Appellate Authority was an afterthought. Under the
1995 Rules, the consignor is required to give the said
F
Form duly filled in when the 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 the G
said Form in ST 18A though signed, remained
incomplete. The details required were never supplied.
Hence penalty was correctly levied under s.78(5) of the
. 1994 Act. [Para 15] [555-C-G]
H
518 SUPREME COURT REPORTS [2008] 15 S.C.R.

A Case Law Reference :
I-

(2007) 7 sec 269 relied on Paras.7, 8, 9,10, 14 t
(2002) 1 SCC 279 held inapplicable Paras 3, 7, 9
B CIVIL APPELLATE JURISDICTION : Civil Appeal No.
5865 of 2008.

From the final Judgment and Order dated 1.8.2007 of the
High Court of Judicature for Rajasthan at Jaipur in S.B. Sales
"' ~ ...
Tax Revision Petition No. 114 of 2005.
c
Jatinder Kumar Bhatia for the Appellant.

Puneet Jain, Sushil Kumar Jain, Archana Tiwari and
Pratibha Jain for the Respondent.
D The Judgment of the Court was delivered by
Y'
...
S.H. KAPADIA, J ..1. 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 \.
E 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 Mis. Navyug
Appliances (India), Mayapuri, Delhi. When the vehicle was
F 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 i"-
was not duly filled in. The A.O. came to the conclusion that
goods were imported without the Declaration Form ST 18A
H which amounted to violation of Section 78(2)(a) of the
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 519
ELECTRICALS LTD. [S.H. KAPADIA, J.]
..
Rajasthan Sales Tax Act, 1994 (for short, "the 1994 Act") read A
--:1 ~ 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.
B
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
Form relating to the goods was sent to the consignor but
c
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 D
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 AQother v. O.P. Metals,
(2002) 1 SCC 279 stood complied with. The arguments of the E
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 F
subsequent production of the form was an after-thought. The
Appellate Authority further found that there was no affidavit from
the 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. ti G
4. Aggrieved by the said decision of the First Appellate
.. Authority, respondent herein moved to Rajasthan Tax Board in
""'f Appeal No.326 of 2004. Before the Board, respondent
contended that it had sent the Declaration Form ST 18A to the
H
520 SUPREME COURT REPORTS [2008] 15 S.C.R.
(,
~-

A 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
B 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

c
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 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
D 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
Y,
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,
E 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
F
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 Declaratl0n Form ST 18A.
Moreover, in all these cases we found that when scrutiny takes
place Declaration Form(s) is sought to be produced after
G
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 .,...
I,

scrutiny begins or at the stage of investigation/enquiry. It is
important to note that these Declaration Forms are similar to
H
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 521
ELECTRICALS LTD. [S.H. KAPADIA, J.]

Returns under Income-tax Act. We are not on the veracity of the A
~ 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 B
blank. It is important to note the significance of Declaration
Form ST 1BA. 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 c
s~pplies the requisite information. The quantum of taxable
turnover is dependent on the declaration made by the consignee
in Declaration Form ST 1BA. 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 D
consignee's failure to supply particulars in the prescribed
...,., Declaration Form. This is one such case .

7. In the case of Mis. Gu/jag 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 E
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 F
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 Section G
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 H
522 SUPREME COURT REPORTS [2008] 15 S. C.R.

A 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
B 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 ~~
c 22A(3) of the 1954 Act (Section 78(2) of the 1994 Act). Even I

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 appeal by special leave in this Court. After
examining the scheme of Section 22A(3) of the 1954 Act, Rule
D
62A of the Rajasthan Sales Tax Rules, 1955 as well as
provisions of Section 78(2) and Section 78(5) of the 1994 Act y
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
E held that transport of goods in movement with the prescribed
Declaration Form duly signed but without givi.Qg 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
F under Section 78(2) even then the fact of not giving particulars Y'
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)
G on the judgment of this Court in the case of O.P. Metals (supra).
The same judgment is also once again relied upon before us
in the present case by the respondent. The judgment in O.P.
Metals (supra) has no application. The case of O.P. Metals ..,....
(supra) was not concerned with blank Declaration Form ST 18A
H travelling along with the goods in movement. In that matter, the
J
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 523
ELECTRICALS LTD. [S.H. KAPADIA, J.]

question of interpretation of Section 78(5) did not arise. It was A
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.
B
8. For the sake of convenience we reproduce important
paragraphs from the judgment of this Court in the case of Mis.
Guljag Industries (supra) as in our view the judgment in Mis.
~ Guljag Industries (supra) squarely applies to the present case:

"9. Existence of mens rea is an essential ingredient of an c
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, it
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 oy the consignor. The nature of the transaction as to
F
,., whether it is by consignment or by depot transfer or by
\

-i 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 G
in by the consignor. Part-B requires the consignor to give
the estimated value of goods. He has also to give invoice
...i..__..., 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 H.
....,.
----(

\
524 SUPREME COURT REPORTS [2008) 15 S.C.R.

A undertaking to get Part-8 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.
B 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 ~ /

c 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
D
be finalized. Moreover, as submitted on behalf of the State
it has become a common practice to circulate the same y
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 tn
E 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.

F 25. There is dichotomy between contravention of Section ),.oool.-
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 kO. it results in
evasion of tax, however, when the goods in movement are
carried without the declaration Form No.18A/18C then
G
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. "'"

H 26. We are not concerned with non-filing of statements
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 525
ELECTRICALS LTD. [S.H. KAPADIA, J.]

before the A.O. We are concerned with the goods in A
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 B
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. c
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 D
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 E
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 unger Section 78(5) F
is attracted as soon as there is contravention of statutory
obligations. Intention of parties committing such violation
is wholly irrelevant.

28. Moreover, in the present case, we find that goods in
G
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
-t carried witnout the declaration forms. In the present matter,
as stated above, goods in movement were carried with
H
526 SUPREME COURT REPORTS [2008] 15 S.C.R.

A 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
B is- regarding the language problem. There is no merit in
these defence_s. They are excuses. The declaration forms
were unfilled so that they could be used again and again.
The forms were collected by the tonsignee from the said
Department. The. consignee undertakes to see that the ~ /

c 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
D
for leaving that column blank. Therefore, there are no
special circumstances in any case for waiver of penalty for y
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
E
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
F 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
G 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
H carrying the goods with blank forms though signed by the
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 527
ELECTRICALS LTD. [S.H. KAPADIA, J.]

consignee. In fact, the assessees resorted to the above A
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 B
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 c
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
0
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 E
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. F

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 G
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 H
528 SUPREME COURT REPORTS [2008] 15 S.C.R.
)-

·-,A 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
8 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 -4
~
false or forged documents/declaration, the authority was
c 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,
D
there was rlo 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
E 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
F 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
1 BA/1 BC which was duly signed by the assessee.
Therefore, as stated above, we hqld that the goods in
G movement were carried without the declaration Form 1BAI
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
H
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 529
ELECTRICALS LTD. [S.H. KAPADIA, J.]
' ;... (supra) has no application to the facts of the present case. A
-\
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 8
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 O.P. Metals (supra) has no application to the present c
case."

9. Reading the judgment in the case of Mis. Gu/jag
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) . D

- -"('
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 E
, distinguished the case of D.P. Metals (supra) vide para 33.
)
Lastly, we may state that in the case of Mis. Guljag Industries
(supra) the vehicle was intercepted on 21.1.95; the enquiry was
r-.-.( made for contravention of Section 22A(3) of the 1954 Act; and
the penalty was imposed under Section 22A(7) of the 1954 Act. F
Therefore, it is wrong to suggest, as it sought to be done by
the respondent herein, that the judgment of this Court in Mis.
Guljag Industries (supra) has no application to the facts 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 Mis. Guljag G
Industries (supra) is squarely applicable to the present case.

10. One additional submission is made on behalf of the
respondent. It is urged that Mis. Guljag Industries (supra)
proceeded on the basis of the law as it stood after the
H
t--
530 SUPREME COURT REPORTS [2008] 15 S.C.R.
t·'
A amendment made to Section "18(5) of the 1994 Act by Act 71
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
B 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 22.3.2002 inter alia stated "the in-charge of the
checkpost or the officer empowered under sub-section (3),
c 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 a penalty at the stipulated
rate". Therefore, according to the respondent herein the
/
subsequent amendment by Act No. 7 of 2002 had no
0
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 22.3.2002, the provision of the 1994 Act after 22.3.
E 2002, 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:
..-·.'
.
F 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
G 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
H may be empowered by Government in that behalf. The
"
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 531
ELECTRICALS LTD. [S.H. KAPADIA, J.]

owner or person in-charge of a vehicle, boat or animal A
->-- 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 B
empowered as aforesaid and give one copy of the
declaration to such officer, and keep one copy with him.

(?)(a) The ofticer-in-charge of the check post or barrier or
~
j

any other Officer not below the rank of an Assistant
Commercial Taxes Officer, empowered in this behalf may,
c
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 D
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]. E

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 F
·-"'1< 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
G
five times of the rate of tax notified under section 5 of tne
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

H
532 SUPREME COURT REPORTS [2008] 15 S.C.R.
I
•-

A 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
B
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.
c
Provided als-o 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
D 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
E 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
F 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
G 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)

H
,.
..
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 533
ELECTRICALS LTD. [S.H. KAPADIA, J.]

Provisions contained in the 1955 Rules: A

·>-- "Rule (62A) Documents prescribed under section
22A(3) -

(1) The owner or person incharge of a vehicle, boat or
B
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
t furnished at check-post, in respect of personal effects c
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
D
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 E
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 F
\,-~ 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.
G
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
H
534 SUPREME COURT REPORTS [2008] 15 S.C.R.

•,
A duly verified and signed by him at least two weeks before •'
the goods are dispatched from outside the State to the --4,-
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 ;
1--
B 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 . '•
c 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
D 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 y
such use on his behalf.

E (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)
F shall be rejected if the Commercial Taxes Officer is
satisfied that such form is not required for bonafide use
Y""
~

under the said clause.

(3) A registered dealer, -
G
(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
H

I

I
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 535
ELECTRICALS LTD. [S.H. KAPADIA, J.]

(b) who receives any goods consigned to him from A
outside the State for sale,

Shall make and furnish or cause to be furnished
declaration in form S. T. 1BA. The counterfoil of the
declaration shall be retained by such dealer and its
8
portion marked original and duplicate shall be
prrduced 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 C
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 D
classes specified in th~ 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
sale or mining or in the generation or distribution E
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. F

(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) G

·"Rule 25-C. Furnishing of declaration.- (1) A dealer
who is entitled to and claims-

(i) exemption from payment of tax; or
H
536 SUPREME COURT REPORTS (2008] 15 S.C.R. ~

~ ...
A (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
B
~
(ii) sale in the course of inter-State trade or commerce; l

or ,+ I'I

(iii) sale in the course of export out of the territory of
India, or
c
(iv) sale outside the State; or

(b) on the sale of any raw material eligible for L

concessional rate of tax, under section 5C: or
D
(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
E declarations obtained as aforesaid and also submit
a separate list of such sales in Form ST 16. .
Provided that all declarations obtained as afores~id
shall be filed by the dealer before or at the time of r-
F assessment or within such further time as the
assessment may for sufficient cause, pern:iit. I
J
\
Provided further that no declaration shall cover than '
one transaction except where the total amount
covered by one declaration does not exceed Rs.2
G
lac for all the transaction in six months.
.
_.,...
Provided furthe~ that notwithstanding anything
contained in sub-rule(1), if the Commissioner, on an
application made by a dealer and after making such
H enquiry as he may consider necessary, is satisfied
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 537
ELECTRICALS LTD. [S.H. KAPADIA, J.]
--~ that the dealer is not in a position to furnish all or A
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. B,

Provided that an aµplication under the preceding
• • proviso may be made upto 31.12.89 in relation to
riots occurred in Makarana Circle in March 1989.

(1 a) A dealer who claims concession from payment of tax c
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 D
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
E
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 F
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 G
electricity:
-'f
(ii) A dealer, who claims speci::il 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
H
538 SUPREME COURT REPORTS [2008] 15 S.C.R.

A a declaration from the purchasing manufacturer in ~-
~orm 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:
B
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. -+ ~

c (2) Blank declaration Forms ST 17, ST 17A, ST 178, 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 t
I
Declaration Forms.
D
(2a) Every declaration form shall be authenticated by the
-y~ •
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.
E 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.
F y
(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
G 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 r~maining in
H stock with a registered dealer on the cancellation of his

(~
I
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 539
ELECTRICALS LTD. [S.H. KAPADIA, J.]

-~- registration certificate shall be surrendered to the A
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.
B
(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.
c
.., (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. D
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 E
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).
'1 Every declaration form obtained from the Assessing F
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 the~eof. Every registered dealer to whom any
declaration form is issued by an Assessing Authority, shall G
\
I . 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 H
540 SUPREME COURT REPORTS [2008] 15 S.C.R.
-
l.-

~'
A 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
B
(8) shall not be valid for the purpose of sub-rule ( 1) or ( 1a)
or (1 b). _,_
-4 .-
(10) Every purchasing dealer shall maintain in Form S.T.
16A a true and complete account of his purchases made
c on the strength of declarations in Form ST. 16A.
P;
(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
D apply in Form ST 1G-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
E
and bonafide nature of the applicant's requirement of such
forms.

(12) (a) If for reasons to be record in writing -
y
F (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.
G (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 lesser number as, in his
opinion, could satisfy the reasonable
H requirements of the applicant.
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 541
ELECTRICALS LTD. [S.H. KAPADIA, J.)
·~
(b) If the applicant for declaration forms is, at the time of A
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.
.
I
8
(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
c
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:-
D
(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 E
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 F
of which the prescribed date or dates or the extended date
1 or dates, if any, may have expired after the date of the
application;
• Provided that in a case coming under this clause, the
G
Assessing Authority may, instead of withholding the
',
I-..,; 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 H
542 SUPREME COURT REPORTS [2008] 15 S.C.R.

~·
A 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. >-
B t
I
( 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: ,-
c
Provided that where a form duly completed and
~

signed is reported to have been lost, stolen or i

destroyed while in transit between the purchasing
dealer and the selling dealer or between the selling
D dealer and the Assessing Authority, the purchasing
y
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
E 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:
.....
F (15) Where the security under sub-rule (13) is to be given
by the selling dealer, it shall be o(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
G be furnished to such Assessing Authority within such
period as he may specify. ,
,.... '
(16) Security required under sub-rule (13) shall be .... :·f~r,.
•,, /~

furnished separately, in respect of each form declared as
lost, stolen or destroyed." (emphasis supplied)
H
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 543
ELECTRICALS LTD. [S.H. KAPADIA, J.]

(b) Provisions contained in the 1994 Act: A
--> "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 8
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; C

(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 lncharge D
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 lncharge of the E
check-post or any other person authorised by such
lncharge.

EXPLANATION (I):-
F
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;
G
(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 H
544 SUPREME COURT REPORTS [2008] 15 S.C.R.

A bailee;
"'
(b) the goods which are being carried in a vehicle ---'..-
or carrier belonging to the owner of such goods;
and
B (c) the goods which are being carried by a person.

(4) Where any goods in movement, other than exempted
goods, are without documents, or are not supported by

c
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,- I-
'
(a) direct the driver or the person in charge of the
'
vehicle or carrier of the goods not to part with the
D 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;
y- •

(b) seize the goods for reasons to be recorded in
E 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
F
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.

G ( 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
H movement of goods, whether seized or not, in violation of
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 545
ELECTRICALS LTD. [S.H. KAPADIA, J.]

_,. the provisions of Clause (a) of Sub-section (2) or for
submission of false or forged documents or dec!aration,
a penalty equal to thirty per cent of the value of such
A

goods." (emphasis supplied)

Rules 53 and 54 of the 1995 Rules : B
"Rule 53. Declaration form required to be carried with the
goods in movement for imports within State.-

rt.,
• (1 )(a) A registered dealer-

(i) who imports any taxable goods as may be notified by
c
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 Sa!es Tax Act, 1956, of
the registered dealer purchasing the goods and are
D
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 E
(iii) who intends to bring import or otherwise receives any
goods from outside the St~te, 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
F
sale; shall furnish or cause to be furnished a declaration
......
in form ST 1BA 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
G
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:-
H
546 SUPREME COURT REPORTS [2008] 15 S.C.R.

A (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
B
(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
c 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
D "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
E
(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
F 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
G 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
H the case of dealer or other person other than
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 547
ELECTRICALS LTD. [S.H. KAPADIA, J.]
' registered dealer. A
'>
,,.
(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 in charge of the entry check-
post or to the officer empowered under section 78,
B
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
dause (a) of sub-section (2) of section 78.
c

- Explam1tion : - (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 D
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
E
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 dupiicate portions of Forms ST 1BA to his
assessing authority every quarter within thirty days from F
the close of the quarter.

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

(3)(a) Any dealer, or the person other than registered
- "i 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
H
548 SUPREME COURT REPORTS [2008] 15 S.C.R.

A having jurisdiction over the area where his principal
place of business is situated or in case there is no -.4./
such place, where he ordinarily resides. "-.

(b) The Form ST 18AA, issued under clause (a) shall
B 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 Jr..
form.
c
(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
D 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 yl
period of thirty days, from the date of issue of_
declaration form to him.
E
(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
F
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
G 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
H
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 549
. ELECTRICALS LTD. [S.H. KAPADIA, J.]

proper in view of the circumstances of the case." A
·> (emphasis supplied)

"Rule 54. Declaration required to be carried with the
. go~ds in movement for export out of Rajasthan or in
the course of interstate trade or commerce; B
(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
c
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
D
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 lncharge of the exit
checkposUOfficer empowered under section
78, who shall retain the original portion and E
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. F
~

(1) The dealer shall submit a statement of export of
goods in Form ST 188 along with the duplicate
portion of Form ST 18C and in case original portion
of Form 1BC has not been retained by any officer G
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
. ~
I .... from the close of the quarter.
"'··
Explanation: - Quarter means the period of three H
550 SUPREME COURT REPORTS [2008) 15-S.C.R.

A 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 ~ffording a reasonable opportunity of
B
being heard, may impose penalty under section 68
of the Act.
_._
(3) The provisinns of sub-rules (5), (6), (7), (8), (9),
(10), (11), (12), (13), (14), (15), (16), (17), (18), (19)
c 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
D Commissioner may issue such instructions as he
· deems proper in view of the circumstances of the
case. y

After the existing Form ST 58 and before Form ST 6, the
following Form ST SC shall be inserted."
E
(c) Statement of Objects and Reasons for enacting
Act No. 7 of 2002 :

"A. Amendment in the Rajasthan Sales Tax Act, 1994:
F 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
G 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 ,.._ I-
't
voluntary registration respectively, are required to be
H amended to empower the State Government to prescribe
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ ·551
ELECTRICALS LTD. [S.H. KAPADIA, J.]

).. such fee in accordance with the prevalent circtlmstances. A

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
B
for recovery of demand, prosecution can be launched.
However, similar power are not available for the non-
compliance of ~~1e 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.
c
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 D
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. E
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 F
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 G
deposit the admitted amount of tax or other admitted
amount or ten per cent of the tax or the other amount
•'f
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 H
552 SUPREME COURT REPORTS \ 1 [2008] 15 $.C.R.

A proposed to be amended suitably to encourage rightful
appeals to be filed. ~.
,
. Sec~ion BT provides for power 9f revision to
Commissioner in ~ase an order passed by the subordinate
authorities is errone.ous ·as well .as prejudicial to the
B 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
c 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
D
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)
E
(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
F 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
G
in..:charge of the goods the person incharge of the
goods a reasonable opportunity of being heard
and after having held such enquiry as he may deem r
H
fit, shall impose on· him for possession or
movement of goods, .whether seized or not, in \
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 553
ELECTRICALS LTD. [S.H. KAPADIA, J.]

>- violation of the provisions of clause (a) of sub- A
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
8
that under Section 78(2) and under Section 78(5) penalty was
~ leviable after due q.iportunity 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,
c
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 D
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 declaration
in Form ST 18A. Under Section 78(4) where any goods in
movement travel without the above documents (including Form
E
ST 18A) or if the docume.nts 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 F
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 G
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 H
554 SUPREME COURT REPORTS [2008] 15 S.C.R.

A Rules, it is clear that penalty was liable to be imposed for
importation of any taxable 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
8 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
C 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.
0 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
E · expression "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
F include the "owner of the goods".
14. Therefore, in our view, the judgment of this Court in the
case of Mis. Guljag Industries (supra) would squarely apply to
the facts of the present case. In fact, our view in the case of Ml
G 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
1

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
.
\

H. - "'. I
ASSISTANT COMMERCIAL TAXES OFFICER v. BAJAJ 555
ELECTRICALS LTD. [S.H. KAPADIA, J.]

that Act No.7of2002 is an exercise in substitution. Therefore, A
.. >
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 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 8
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 ' C .
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 D
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 befor~ the Dy. Commissioner (A) was an E
afterthought. Under the 1995 Rules, the consignor is required
to give the said Form duly filled in when the 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 qne sees the Form it is clear that it shall be the F
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 G
Act.
16. For the aforestated reasons, we set aside the
impugned judgment and allow Department's civil appeal with
nt) order as to costs.

D.C? Appeal allowed.