Allahabad High Court
The Commissioner Commercial Tax U.P. ... vs S/S Saurabh Traders Railway Bus Stand ... on 10 January, 2020
Author: Alok Mathur
Bench: Alok Mathur
HIGH COURT OF JUDICATURE AT ALLAHABAD Court No. - 42 Case :- SALES/TRADE TAX REVISION No. - 651 of 2013 Revisionist :- The Commissioner Commercial Tax U.P. Lucknow Opposite Party :- S/S Saurabh Traders Railway Bus Stand Pilkhuwa Hapur Counsel for Revisionist :- S.C Hon'ble Alok Mathur,J.
1. Heard Mr. B.K. Pandey, learned Standing Counsel appearing for the revisionist as well as Mr. Suyash Agarwal, learned counsel for the respondent.
2. The instant revision has been preferred against the order of the Commercial Tax Tribunal dated 14.05.2013, whereby the revision preferred by the respondent was allowed and the order imposing penalty has been set-aside.
3. In the present case the goods which were being transported on Vehicle No. UA -10/3486 were intercepted by the Mobile Squad at Moradabad. The driver furnished various documents which were carried by him and on inspection it was found that Column 6 of Form 38 was blank, wherein the bill/cash memo/chalan/tax invoice number were not endorsed in the apprehension that the Form has been left blank only with intention to evade tax and for reuse of the said Form. A show cause notice was issued to the respondents and a penalty of an amount of Rs. 1,38,000/-was imposed in exercise of power under section 54(1)(14) of the VAT Act.
4. Against the penalty order 31.08.2010 the respondents had preferred a First appeal before the Additional Commissioner Grade-II (Appeals) Moradabad who after considering the entire conspectus of the case dismissed the appeal preferred by the respondents, subsequent to which the second appeal was preferred before the Tribunal.
5. I have heard the learned counsel for the parties and perused the record.
6. It is admitted fact that Column 6 of Form 38 was not filled up in the main copy, but in the duplicate copy the same was filled up. The other documents which were carried out by the driver also included a certificate issued by the Forest department which been filled up after physical inspection of the entire goods which were being transported. It was submitted by the respondents that it is only due to oversight and human error that column 6 of Form 38 was remain unfilled.
7. Considering the entire facts of the case the Tribunal has came to the conclusion that just because Column 6 of Form 38 remain unfilled cannot give rise to a presumption that there was an intention to evade tax by the dealer and further concluded that imposition of penalty in the fact and circumstances of the present case was arbitrary and thereby allowed the appeal of the respondents.
8. The controversy involved in the present revision is in respect to the levy of penalty under Section 54(1)(14) of the Act, 2008 in contravention of the provisions of Section 50 of the Act, 2008. As per scheme of the Act, 2008 any person, who intends to bring, import or otherwise receive, into the State from any place outside the State any goods other than goods named, and described in schedule-I in such quantity or measure or of such value, as may be notified by the State Government in this behalf, in connection with business, shall either obtain the prescribed form of declaration, in such manner as may be prescribed, from the assessing authority having jurisdiction over the area, where this principal place of business is situated or in case there is no such place, where he ordinarily resides or shall down load from official website of the department in the manner as may be prescribed under Rule 58 or 59.
9. The driver or other person incharge of vehicle carrying goods referred to in sub Section (1) of Section 50 of the Act, 2008 is required to carry the declaration form along with other relevant documents and if on inspection he is found to transport or attempting or abetting to transport any goods to which this section applies without being covered by proper and genuine documents then for reasons to be recorded and after giving opportunity of being heard he may order for detention of such goods. The declaration form for import may be obtained by registered dealer for import of goods either from his assessing authority or he may download it from the official website of the department in the manner prescribed by the Commissioner. The aforesaid declaration form for import is Form 38. The Form is required to be sent to the selling dealer or consignor of the other State in two copies.
10. In Form 38 the name and address of the dealer to whom form is to be issued, description of goods, weight / measure, quantity, value in figure, value in words, bill / cash memo / Chalan / tax invoice number and date, name and address of seller / consignor and certain particulars of transporters / carrier, namely, service provider number, truck number, name and address of driver and driving license number are to be filled up. Column no. 1 to 6 may be filled up only with the help of bill / cash memo / chalan / tax invoice. Recurring instances comes to light that column no. 6 is left blank due to which penalty under Section 54(1)(14) of the Act, 2008 is imposed by the assessing authority on the ground that non filling of this column facilitates tax evaders to evade tax by re-using the same form 38 for import of unaccounted goods. It is the case of the department that when entire informations in form XXXVIII are filled up with the help of the relevant bill / cash memo / chalan / tax invoice then there is no reason not to fill up column no. 6 i.e. bill / cash memo / chalan / tax invoice number and date. According to the department this clearly indicates import of goods to evade payment of tax which attracts penalty under Section 54(1)(14) of the Act, 2008 unless it is shown that even if details in column no. 6 have not been filled up yet there was no intention to evade payment of tax.
11. In the instant case it is admitted fact that the respondent had duly applied for and obtained Form 38 for import of goods and the Column 6 of the said Form was left blank on account of negligence of the respondent. It is only on account of non filling of Column 6, penalty has been imposed upon the respondent. It has been submitted on behalf of the respondent that there was no intention to evade tax and the driver of the vehicle carrying the goods was carrying all the relevant documents including the bill/challan/bilty etc. from which the details of goods being carried on the vehicle could have been verified by the officer concerned and therefore there was no occasion for the assessing officer to pass penalty order, inasmuch as there was no intention on the part of the assesee to evade tax.
12. Learned counsel for the assessee/respondent has also produced a copy of Circular dated 03.02.2009, passed by the office of the Commissioner, Commercial Tax U.P., which has been addressed to all the Zonal Additional Commissioners/Additional Commissioners Grade-II etc. wherein it has been provided that in case vehicle importing goods is accompanied with Form 38 and the goods being carried tallies with the said Form 38 and also that in case any column in Form 38 remains unfilled, then the Officer inspecting the vehicle at the Check Post is under duty to fill up the blank Form in accordance with the other documents alongwith his signature and stamp and release the goods thereafter.
13. In the case of Jain Suddh Vanaspati Ltd. Vs. State of U.P., 1983 U.P.T.C. 198 a Division Bench of this Court considered the similar provisions of the U.P. Sales Tax Act, 1948 and held in paragraphs 23, 29 as under :-
"23. The provision contained in Section 28-A as it stands after enactment of U.P. Act No. 33 of 1979 are materially different. It cannot be said that there is any assumption underlying therein that the goods to which the provision of Section 28-A applies have actually been sold inside the State and the section does not authorise the sales tax authorities either to seize the said goods or to penalise the importer thereof on any such assumption. Its present basis is the attempt to evade tax. The power to detain the goods and levy penalty in respect thereof cannot be exercised merely for the reason that the said goods were not accompanied by the requisite documents or that the documents accompanying them were false. This power can be exercised only if the goods detained are not accompanied by the requisite documents or that the documents accompanying them are false and if there is material before the detaining authority to indicate that the goods are being imported in an attempt to evade assessment or payment of tax due or likely to be due under the Act. The instant case, therefore, in our opinion, clearly falls outside the ratio of the case of Check Post Officer v. K. P. Abdulla & Bros. [1971] 27 STC 1 (SC) as decided by the Supreme Court.
29. The first question that arises for consideration is whether the expression "attempt to evade assessment or payment of tax due or likely to be due" can be said to be vague and whether the power conferred upon the Check Post Officer in this regard can be said to be arbitrary. In our opinion, the expression "attempt, to evade assessment or payment of tax due or likely to be due" cannot be said to be an expression conveying vague ideas. It is, in our opinion, an expression having a definite connotation. An attempt to evade assessment or payment of tax due or likely to be due can take place in so many different ways that it is not possible for any legislature to specify all such methods of evasion in the Act. The expression does not become vague merely because all the circumstances in which such an attempt to evade assessment or payment of tax due or likely to be due have not been enumerated therein."
14. Learned counsel for the respondent has placed reliance on the judgment passed by this Court in the case of I.C.I. India Limited Vs. Commissioner of Sales Tax, (2003) 134 STC 286 (All), wherein in similar circumstances the Court has held as under :-
"13. In the present case, dealer's books of account was accepted. Tribunal recorded the finding to this effect. Admittedly, bill and builty were produced at the time of the checking at the check-post and form XXXI had also been submitted along with bill and builty. The purpose of form XXXI is, to bring to the notice of the department about the import of the goods so that the imported goods may not be escaped from consideration at the time of assessment. Merely because some off the columns of form XXXI were not filled which was merely a procedural defect it cannot be said that the provisions of Section 28-A has not been complied. No finding whatsoever has been recorded by any of the authority that there was any attempt on the part of the applicant to evade the tax. Inasmuch as goods were not for resale and were not liable to tax in the hands of the applicant it cannot be said that there was any violation of Section 28-A. In the circumstances, the penalty under Section 15-A(1)(0) is not sustainable.
14. In the result, the revision is allowed. The order of Tribunal dated September 3, 1990 is set aside and the penalty under Section 15-A(1)(o) is quashed."
15. Learned Single Judge of this High Court in Sales/Trade Tax Revision No. 441 of 2014 - The Commissioner, Commercial Tax, U.P,. Lko Vs. S/S Dabur India Ltd. 22 Site-4, Ind. Area Sahibabad and other connected revisions (decided on 25.09.2014), wherein similar controversy is involved, has taken same view in respect to unfilled Form-38.
16. Learned Standing Counsel for the revisionist has placed reliance on the judgment of Apex Court in the case of M/s Guljag Industries (supra), whereby he has invited attention of this Court towards the observations made by the Apex Court in para 22 of the judgment, wherein it has been recorded as under :
"22. ...... Section 78(2) is a mandatory provision. If the declaration Form 18A/18C does not support the goods in movement because it is left blank then in that event Section 78(5) provides for imposition of monetary penalty for non-compliance. Default or failure to comply with Section 78(2) is the failure/default of statutory civil obligation and proceedings under Section 78(5) is neither criminal nor quasi-criminal in nature. The penalty is for statutory offence. Therefore, there is no question of proving of intention or of mens rea as the same is excluded from the category of essential element for imposing penalty. ........"
17. Perusal sub Section 6 of Section 28A itself indicates that penalty can be imposed only after giving opportunity of being heard that the goods were being so transported in an attempt to evade payment of tax due or likely to be due under the Act and therefore mens rea becomes essential ingredient, and therefore the facts in the case of M/s M/s Guljag Industries (supra) are distinguishable in respect to the provisions of the Act, 2008 applicable in the State of Uttar Pradesh.
18. Non-filling up of column no. 6 i.e. not mentioning of bill / cash memo / chalan / invoice number may lead to an inference that in case of non-checking of goods the declaration form may be re-used for importing goods of same quantity, weight and value to evade payment of tax but it cannot be the sole ground to impose penalty under Section 54(1)(14) of the Act, 2008. Satisfaction has to be recorded after giving opportunity to the dealer / person and after considering all the relevant materials / evidences on record that there was an intention to evade payment of tax. The guilty mind is necessary to be established to impose penalty under Section 54(1)(14) of the Act, 2008. If the last fact finding authority i.e. the tribunal has recorded a finding of fact that there was no intention to evade payment of tax, same cannot be interfered with in revision under Section 58 of the Act, 2008 provided the finding is perverse or it is based on consideration of irrelevant material or non consideration of relevant material.
19. In the present case also the vehicle was accompanied by Form 38 and all other documents were being carried along with other documents and only due to human error column would remain unfilled. It was the duty of the Officer managing the Check Post who after discovering that some column of Form 38 found unfilled should have filled the same himself in the light of Circular dated 03.02.2009 and should have allowed the vehicle to proceed alongwith the goods. It is undisputed that the goods transported were the same which were mentioned in the various documents (bill/builty/challan etc.) carried by the driver of the vehicle.
20. The judgment passed by this Court in the case of I.C.I. India Limited (supra) has clearly spelt out the law in this regard and a circular issued by the Revenue clearly indicates that the Officer managing the check post after verifying the goods on the basis of other documents available at that point of time and have filled up the blank column of Form 38 and there was no occasion for imposing penalty, as has been done by the Assessing Officer.
21. No question of law arises in this revision for consideration of this Court.
22. In the light of above, this Court finds no merit in the contention raised by learned Standing Counsel appearing on behalf of the revenue. The revision lacks merit and is accordingly dismissed at the admission stage itself.
23. The impugned order dated 14.05.2013, passed by the Tribunal is hereby affirmed.
Order Date :- 10.1.2020 A. K. Singh