The intention of the parties committing a violation becomes irrelevant once the contravention of the statutory obligation as contemplated by the Act and the Regulations is established.
The need to establish mens rea is unnecessary unless indicated by the language of the statute. The penalty levied under Section 43-A of the Act is for a civil obligation, and the penalty has to follow. The Gujarat High Court has consistently held that the penalty leviable under Section 45(6) of the Act is a statutory and mandatory penalty, and there is no question of any mens rea on the part of the assessee to be considered.
In the recent decision of ArcelorMittal Nippon Steel India Limited, the court held that the penalty levied under Section 45 of the Act is leviable on purchase tax assessed and is leviable on the difference between the tax paid and tax leviable/assessed, and there is no need to establish mens rea for such penalty.
State of Gujarat and Anr. …Appellant(s)
Versus
M/s Saw Pipes Ltd. …Respondent(s) decided by the Supreme Court of India on 17.04.2023