Allowed

Rourkela Constn. v. A.C. of Sales Tax

Orissa HC6 Feb 2019OJC/4440/2001

Case brief

AI extract

What is this about?

The High Court quashed the penalty imposed under Section 10 (A) of the C.S.T. Act by the Commercial Tax Officer and the revisional authority. The order relied on Supreme Court precedents holding that mens rea is a condition precedent for imposing penalty, which was conspicuously absent here.

What did the court decide?

The orders of the Commercial Tax Officer and the revisional authority dated 26.02.2001 were quashed. The revenue was directed to refund any recovered penalty within four weeks.

Rourkela Constn. Vs A.C. of Sales Tax — Writ and Judicial Review | Orissa HC (2019)

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OJC No. 4440 of 2001

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06.02.2019 Heard learned counsel for the parties.

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By way of this petition, the petitioner has challenged the order dated 26.02.2001 (Annexure-5) passed by the Addl. Commissioner of Commercial Taxes, Northern Zone, Odisha, Sambalpur-opposite party no. 1 in Revision Case No. SU137/2000-2001 whereby learned Addl. Commissioner of Commercial Taxes rejected the revision and confirmed the penalty imposed under Section 10 (A) of the C.S.T. Act by the Sales Tax Officer, Rourkela-II Circle, Uditnagar.

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In view of the decision of this Court in the case of M/s. Hirakud Power Co. Ltd. & another –v- Commissioner of Commercial Taxes, Odisha, Cuttack and another in O.J.C. No. 7605 of 1995, decided on 06.02.2019, learned counsel for the petitioner contended that the ratio decided in the aforesaid case is applicable to the present case and this writ petition may be disposed of in terms of the direction issued by this Court in the said case.

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Learned counsel for the Revenue does not dispute the legal position and contended that the writ petition may be disposed of in terms of the direction issued by this Court in the aforesaid case.

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Having heard learned counsel for the parties and without entering into the niceties of the facts involved, even if the observations made and findings arrived at by both the authorities are taken into consideration on their face value, it is revealed that learned Revisional Court proceeded on an assumption that the petitioner-dealer has not been registered to deal with the commodities for which the penalty has been

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imposed. But the ratio decided by the Hon’ble Supreme Court in the case of Commissioner of Sales Tax, Uttar Pradesh –v- Sanjiv Fabrics , reported in (2010) 9 SCC 630, reveals that before imposing penalty, a finding of ‘ mens rea ’ is the condition precedent and the same is very conspicuously absent in the orders under Annexures-3 and 5. Therefore, the conclusion arrived at by the revisional authority, which is only and solely on the basis of observation that the petitioner-dealer was not registered to deal with the commodities for which penalty has been imposed will not sustain. This Court in the case of M/s. Hirakud Power Co. Ltd. & another (supra) relying upon the case law in Sanjiv Fabrics ( supra) has taken a similar view.

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Hence, the orders of Commercial Tax Officer as well as revisional authority as at Annexures-3 and 5 respectively deserve to be quashed and the same are quashed.

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Penalty, if any, recovered from the petitioner shall be refunded within a period of four weeks from the date of receipt of the certified copy of this order.

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This writ petition is, accordingly, allowed.

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Urgent certified copy of this order be granted on proper application.

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.…….......……………… ( K.S. Jhaveri ) Chief Justice

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…………………..……… ( K. R. Mohapatra)

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bks/jm Judge

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