STATE OF KARNATAKA Vs. GATI LTD.

JUDGEMENT

(1.) The State has preferred this appeal against the order passed by the Karnataka Administrative Tribunal reducing the penalty imposed under Section 28-A(4) of the Karnataka Sales Tax Act (for short the Act') to Rs. 10,000/-.

(2.) The respondent is a transporter having its branches all over India he was transporting "Flame Arrestors" packed in 7 wooden cases on 10.1.2005 in vehicle No. HR-55-B-7521 which was checked by the Check Post Officer and found that the goods valued at Rs. 3,62,918/- was not supported by documents prescribed as per the provisions of Section 28-A(2) of the Act, except the G.C. Note, Sale Bill No. 092 and Delivery Challan 132. Therefore, notice was issued proposing penalty under Section 28-A(4) of the Act in contravention of the provisions of Section 28-A(2) of the Act. The respondent filed statement of objections. Over ruling the objections the Asst. Commercial Tax Officer imposed the penalty of Rs. 1,30,650/- which is triple the rate of tax 36% of the total value of the goods. Aggrieved by this order, respondent preferred an appeal which came to be dismissed. Aggrieved by the said order he preferred an appeal to the Tribunal. Though the Tribunal confirmed the finding of both the authorities that there is violation of the provisions of Section 28-A(2) of the Act, it was of the view as mens rea was essential to levy maximum penalty in contravention of the provisions of the Act and in the instant case mens rea is absent, relying on the judgment of this Court in Larsen And Toubro Limited Vs. Addl. Commissioner of Commercial Taxes, Zone-1, Bangalore, 2001 124 STC 321, reduced the penalty to Rs. 10,000/- as done in the said case. Aggrieved by the said order, the State is in appeal.

(3.) We have heard the learned counsel for both the parties. Subsequent to the judgment citedSection 28-A(4) has undergone a substantial change by way of an amendment. This Court had an occasion to consider and interpret the aforesaid provision in the case of State Of Karnataka Vs. M/S. Camellia Clothing Ltd., in STRP No. 71/2011 dated 2.3.2012 wherein it was held as under:-