At, High Court of Judicature at Allahabad
By, THE HONOURABLE MR. JUSTICE YASHWANT VARMA
For the Applicant: Suyash Agrawal, Advocate. For the Opposite Party: A.C. Tripathi, Standing Counsel.
1. Heard Sri Suyash Agrawal, learned counsel for the revisionist and Sri A.C. Tripathi, learned Standing Counsel for the respondent.
2. This revision is directed against an order in terms of which the asessee have been penalised under Section 10A of the CST Act 1956.
3. The issue itself arose on the import of "white oil" by the assessee for the Assessment Year in question and to which an objection was taken that the said commodity was not covered by his registration certificate. Under the registration certificate, the assessee admittedly was registered for the commodities mobil oil, used oil, red stone, PVC scrap and petroleum on a concessional rate.
4. The First Appellate Authority came to hold that white oil which had been imported would duly stand covered under the registration certificate since the words "mobil oil" was only a popular description of a lubricant. In view thereof it proceeded to annul the penalty which had been imposed. This order, however, has been interfered by the Tribunal. The Tribunal has in terms of the order impugned restored the imposition of penalty.
5. The issues which would merit consideration while imposing penalty under Section 10A have been duly noticed by this Court while deciding Sales/Trade Tax Revision No. 284 of 2007 (Dharam Pal Satya Pal Ltd. v. Commissioner of U.P. Trad Tax Act). Dealing with the factor which must be taken into consideration, this Court observed as follows:
"In order to justify the imposition of penalty under the provisions of Section 10A, the authority must come to hold conclusively that the dealer had falsely represented when purchasing goods in the course of interstate commence that they were covered by its certificate of registration. As the Court reads the order of the assessing authority and the Tribunal it finds that no findings have been recorded in support of the case that a false representation had been made by the assessee. The law on the subject is no longer res integra and this Court may only refer to the decision of the Supreme Court in Commissioner of Sales Tax, U.P. v. M/s. Sanjai Fabrics [2010 NTN (Vol.44) 69] in which the position of law was summarized in paragraph 22 which reads thus:
"22. In view of the above, we are of the considered opinion that the use of the expression "falsely represents" is indicative of the fact that the offence under Section 10(b) of the Act comes into existence only where a dealer acts deliberately in defiance of law or is guilty of contumacious or dishonest conduct. Therefore, in proceedings for levy of penalty under Section 10A of the Act, burden would be on the revenue to prove the existence of circumstances constituting the said offence. Furthermore, it is evident from the heading of Section 10A of the Act that for breach of any provision of the Act, constituting an offence under Section 10 of the Act, ordinary remedy is prosecution which may entail a sentence of imprisonment and the penalty under Section 10A of the Act is only in lieu of prosecution. In light of the language employed in the Section and the nature of penalty contemplated therein, we find it difficult to hold that all types of omissions or commissions in the use of Form 'C' will be embraced in the expression "false representation". In our opinion, therefore, a finding of mens rea is a condition precedent for levying penalty under Section 10 (b) read with Section 10A of the Act."
6. As is evident from the above extract, there is a clear distinction between a false representation and a wrong representation. Every wrong or incorrect interpretation or representation would not result in it being concluded that the person had falsely represented. In order to arrive at a charge of false representation an element of mens rea is also essential. In the backdrop of the facts as noted in the present case, this Court finds itself unable to sustain the view taken by the Tribunal that the conduct of the revisionist would fall within the category of a false representation."
7. As this Court reads the order of the Tribunal, it is evident that no findings have been returned or recorded that the assessee had falsely represented the factum of the commodity being covered by his certificate of registration. As this Court had held in Dharampal Satya Pal Ltd., there has to be and
Please Login To View The Full Judgment!
necessarily understood a clear distinction between a false representation and a wrong or incorrect representation. 8. In the facts of the present case, this Court finds force in the submission of the learned counsel for the revisionist. There is clear absence of any intent to falsely represent. Accordingly, this revision is allowed. The order of the Tribunal is set aside. In consequence, the view taken by the First Appellate Authority shall stand restored.