Mens rea can be inferred from circumstances surrounding a violation, justifying penalty under tax laws even without explicit wrongdoing established.

JUDGMENT

Ramachandran Nair, J.

Appeal is filed against the judgment of the learned single Judge cancelling the penalty levied under Section 47 (6) of the Kerala Value Added Tax Act . We have heard Government Pleader appearing for the appellants and counsel appearing for the respondent.

2. The transaction leading to the levy is transport of an old JCB of 2004 model across the check post without being accompanied by any documents. The driver offered no explanation before the detaining authority. The respondent also did not make any effort to get the goods released from the check post other than filing thiswrit petition, after two weeks of seizure. The respondent has produced in this Court documents to prove that he had undertaken a contract for lease of the JCB to a party at Meenakshipuram which is in Tamil Nadu near to the Kerala check post. Pursuant to the direction issued by this Court in the first writ petition filed, the adjudicating authority conducted enquiry and rejected the explanation and after rejecting the explanation offered by the respondent, penalty was levied. Penalty order was challenged in writ petition and the learned single Judge allowed the same by vacating the order holding that no mens rea is established before levying penalty. It is against the single Bench judgment, this writ appeal is filed before us.

3. After hearing both sides, we are unable to sustain the judgment because mens rea need not be established by the department with any independent material when it can be inferred from the facts and circumstances that led to the detention of the vehicle. In the first place, in our view, the adjudicating officer rightly rejected the contention of the respondent that the driver committed a mistake by taking the vehicle from Tamil Nadu to Kerala through the check post instead of going to the real destination which is within Tamil Nadu. Secondly, even though the vehicle is re-painted, it did not contain the Registration Number. In fact, no vehicle will be released after painting from a workshop without painting the Registration Number on it. Movement of a vehicle on road without Registration Number on it is a violation of the Motor Vehicles Rules. Therefore, the facts and circumstances create a doubt on the purpose for which the vehicle is brought, which, according to the department, is either for doing job work in Kerala or for sale in Kerala both of which attract tax liability. However, what we notice is that the detaining authority did not record any statement from the driver and the adjudicating authority did not conduct any enquiry or establish as to whether the vehicle was transported for the purpose of sale in Kerala or for giving it on hire. In the circumstances, we feel only a token of penalty is called for, for technical violation, that is, transport without documents and without Registration Number on the JCB which is a motor vehicle within the definition of the Motor Vehicles Act. We, therefore, allow the writ appeal by vacating the judgment of the learned single Judge but by modifying the penalty order by reducing the penalty to Rs.15,000/- (Rupees fifteen thousand only) on payment of which the vehicle will be released to the respondent.

C.N.Ramachandran Nair, Judge.

Bhabani Prasad Ray, Judge.

sl.