STATE OF TAMIL NADU Vs. LAKSHMI AND COMPANY

JUDGEMENT

(1.) THE respondents are dealers in rice mill spare parts and accessories. THEy were registered under the Central Sales Tax Act. During the verification of the accounts by the assessing authority, it transpired that the assessees had purchased oil engine spares from outside the State on concessional rate of tax by issuing "C" forms during the assessment years 1975-76, 1976-77, 1977-78, 1978-79 and 1979-80. THE assessing authority was of the opinion that the registration certificate issued to the assessees did not enable them to issue "C" form certificates to purchase from outside the State at concessional rate of tax "oil engine spares" and, therefore the issue of "C" form certificate by the assessees was based on a false representation that they were entitled to purchase oil engine spares also on the basis of the registration certificate issued to them. THE assessing authority invoked the provisions of section10A of the Central Sales Tax Act, and after following the procedure prescribed by law, levied penalty, holding that the assessees had committed an offence under section10(b) of the Act. THE assessees went up in appeal before the appellate authority who confirmed the penalty, but reduced the same and refixed it. THE assessees filed a second appeal before the Tribunal. THE Tribunal took the view that though the registration certificate of the assessees did not authorise them to issue "C" forms for purchase of "oil engine spares", yet the assessees had acted under a bona fide impression that oil engine spares also would come within the class of goods mentioned in the registration certificate, and therefore, they were not liable to be penalised under section10A of the Act. THE Tribunal opined that there was no mens rea established and that the representation made by the assessees was under a bona fide belief that the goods would be covered by the registration certificate. Consequently, the penalty imposed in respect of all the five cases was set aside. THE Revenue is in revision before us.

(2.) SINCE the five appeals relating to the assessment years 1975-76, 1976-77, 1977-78, 1978-79 and 1979-80 had been consolidated by the appellate authority and disposed of by a common order, and the same course was adopted by the Sales Tax Appellate Tribunal, for the sake of convenience we also dispose of them by a common order as common points of law and fact are involved.

(3.) IN Vijaya Electricals v. State of Tamil Nadu 1991 (82) STC 268 this Court had an occasion to consider in depth the ambit and scope of section10(b) of the Act read with section10A of the Act. The Bench held that section10(b) of the Act postulates that if any registered dealer falsely represents when purchasing any class of goods that such goods are covered by the certificate of registration, he is liable to be punished to the extent contained in the section itself. The Bench found that unlike in a criminal case, where it is essential for the prosecution to establish that the accused had a guilty intention or in other words, the requisite mens rea before recording conviction, the obligation on the part of the Revenue, in cases of tax delinquency, would be discharged where it can be shown that the "blameworthy conduct" of the assessee was established, and such a conduct would stand established where the competent authority records a finding that the assessee had made a false representation. The Bench opined :