Anshuman Singh, J.
1. This revision has been preferred by the Commissioner of Sales Tax, U.P., under Section 11(1) of the U.P. Sales Tax Act (hereinafter referred to as the Act) against the judgment dated 17th January, 1984, passed by the Sales Tax Tribunal, Kanpur Bench, Kanpur, relating to the assessment year 1978-79.
2. Briefly stated the facts are that the respondent-assessee was manufacturing and dealing in foam products. In the relevant years it imported machinery worth Rs. 1,43,072.20 for manufacturing goods. The factory was run for some time and as there was loss in the business, the respondent-assessee in February, 1979, gave the factory on lease to Sri M. L. Arya. Sri M. L. Arya carried on the business in 1979-80 under the name and style of M/s. Mayur Rubber (India), Pandunagar, Kanpur. Mr. Arya also could not run the business, and ultimately he closed it down. On 16th April, 1980, the respondent-assessee disposed of all the imported machines to one Sri R, 'K. Agarwal, partner of M/s. Durga Products, Vivekanand Nagar, Kanpur, for Rs. 85,000. Since the respondent-assessee had imported the machinery against form C, the assessing authority imposed a penalty of Rs. 8,600 under Section 10(d) of the Central Sales Tax Act. In appeal filed by the assessee the imposition of fine was upheld. The assessee preferred a second appeal against the order of the Assistant Commissioner (Judicial) before the Sales Tax Tribunal and the Tribunal allowed the appeal and quashed the orders of the Assistant Commissioner (Judicial) and the Sales Tax Officer. The revenue feeling aggrieved has come to this Court in the instant revision.
3. I have heard the learned standing counsel appearing for the revenue as well as the counsel for the assessee.
4. Learned standing counsel appearing for the revenue has submitted that the Tribunal was not justified in knocking of the penalty imposed under Section 10(d) as no reasonable cause was shown by the assessee. Whether there was reasonable cause or not was a question of fact and the Tribunal held the cause sufficient as shown by the assessee and came to the conclusion that the imposition of penalty was wholly unwarranted in the facts of the case. It is relevant to state that the element of mens rea has to be determined while imposing penalty under Section 10(d) of the Central Sales Tax Act, inasmuch as the words used in Section 10(d) is 'without reasonable cause'. Since in the instant case guilty intention of the assessee has not been proved and the Tribunal has accepted the cause shown by the assessee, the Tribunal was wholly justified in knocking of the penalty imposed under Section 10(d) of the Central Sales Tax Act.
5. No other illegality or arbitrariness has been pointed out by the learned standing counsel appearing for the revenue.
6. In the result, the revision fails and is accordingly dismissed. However, there will be no orders as to costs.