Gauhati High Court
M/S Sugam Parivahan Ltd vs Assam Board Of Revenue & 3 Ors on 19 January, 2017
Bench: Hrishikesh Roy, Nelson Sailo
THE GAUHATI HIGH COURT AT GUWAHATI
(The High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh)
PRINCIPAL SEAT AT GUWAHATI
Revision Petition No.19/2014
1. M/S SUGAM PARIVAHAN LTD.
MASJID ROAD, SHANTIPARA, AGARTALA, WEST TRIPURA,
REP. BY ITS MANAGER AND ITS AUTHORISED SIGNAGATORY OF
THE SAID COMPANY AND RESIDENT OF GUWAHATI,
KAMRUP, ASSAM.
...... Petitioner.
-Versus-
1. ASSAM BOARD OF REVENUE,
GUWAHATI, KAMRUP, ASSAM, REP. BY ITS CHAIRMAN.
2. THE COMMISSIONER OF TAXES
KAR BHAWAN, G.B. ROAD, DISPUR,
GUWAHATI, KAMRUP, ASSAM.
3. SUPERINTENDENT OF TAXES
CHURAIBARI CHECK POST, CHURAIBARI.
4. THE STATE OF ASSAM
REP. BY THE COMMISSIONER AND SECRETARY TO THE GOVT. OF ASSAM,
DEPTT. OF FINANCE, DISPUR, GHY- 6.
...Respondents.
BEFORE
HON'BLE MR. JUSTICE HRISHIKESH ROY
HON'BLE MR. JUSTICE NELSON SAILO
Advocates for the petitioner: Ms. M. Hazarika, Sr. Advocate.
Mr. S.K. Agarwal, Advocate.
Advocates for the Respondents: Mr. B. Choudhury, Standing Counsel,
Finance & Taxation Department.
Date of hearing & judgment: 19.01.2017.
JUDGEMENT AND ORDER (ORAL)
(Hrishikesh Roy, J).
Heard Ms. M. Hazarika, the learned senior counsel appearing for the petitioner. Also heard Mr. B. Choudhury, the learned Standing Counsel for the Finance & Taxation Department, representing the respondent Nos.2--4.
Revn. Petition No.19/2014 1 of 8
2. The issue in this case relates to presumptive tax liability under Section 76(6) & 76(7) of the Assam Value Added Tax Act, 2003 (hereinafter referred to as "the VAT Act"), imposed on account of the failure of the transporter, to discharge the rebuttable presumption of the truck laden with goods entering Assam being transported out of the State, without being unloaded through appropriate endorsement of the Transit Permits (TPs) at the exit check post.
3. This petition is filed under Section 81 of the VAT Act to challenge the assessment order dated 18.3.2010 (Annexure-IV) of the Superintendent of Taxes, Churaibari Check Post, Assam for the assessment year 2005-06, under Section 76(6), read with Section 76(7) of the VAT Act. Under the impugned order, tax was levied for goods carried by five trucks of the Transporting Company. The company paid the tax, interest and penalty for the goods in respect of two trucks and therefore, we are concerned here with levy on the goods carried by the other 3 trucks bearing Regn. No.AP-16/U 6287 (Gunny Bags), TR-02/1743 (Sheet Rubber) and TR-02/1620 (Sheet Rubber) respectively.
4.1 Previous to the impugned exercise, the first assessment was made on 31.12.2007 (Annexure-I), on account of non-furnishing of the endorsed T.Ps. at the exit check post of Assam Border, for goods carried by 13 trucks, as is mandated under Section 76(6) of the VAT Act. This was challenged by the transporter, where they contended that they be given the opportunity to rebut the legal presumption of tax evasion, drawn under Section 76(6) of the VAT Act. The specific case of the transporter is that they collected the necessary certificates of crossing the exit check gate in respect of eight vehicles and therefore, there can be no presumption of evasion of tax in respect of the commodities carried in the said eight vehicles.
4.2 For the remaining five trucks, the petitioner contended that the truck bearing Regn. No.AP-16/U 6287 was not being operated by the transporter and therefore they should not be made liable under the VAT Act for the gunny bags carried by that truck.
4.3 In so far as the two trucks bearing Regn. No. TR-02/1743 and TR-02/1620 are concerned, the transporter contended that the said two loaded trucks went missing and therefore, an FIR was lodged on 10.11.2005 for the missing goods and trucks, leading to registration of East Agartala P.S. Case No.164/2005, under Section 407/420/468/379/102(B) of the IPC. Accordingly, it was submitted that the Revn. Petition No.19/2014 2 of 8 transporter be given due opportunity the rebut the legal presumption, on evasion of tax.
5. The Commissioner of Taxes, Assam under his order of 9.2.2010 (Annexure- III) set aside the earlier order of assessment made on 31.12.2007 and directed the Superintendent of Taxes, Churaibari to re-do the exercise, after providing due opportunity to the transporter to rebut the legal presumption.
6. Following the order passed by the Revisional Authority, the Assessing Officer noted that the transporter could produce the certificates from the exit check post, for eight truck loads but found that they failed to produce such supporting document for the commodities in the remaining 5 other trucks and accordingly, for the goods carried on these five trucks, assessment to tax, interest and penalty under the VAT Act, was made by the Assessing Officer, under his second assessment order dated 18.3.2010 (Annexure-IV).
7. The transporter paid the assessed tax, interest and penalty for the sheet rubber and bamboo sticks carried by truck Nos.AS-01/M5411 and AP-21/U4466 but contested the assessment of tax under the presumptive section, in respect of the commodities carried by the three other trucks, which were made subject to tax, under Section 76(6) of the VAT Act. In their Appeal, filed under Section 80 of the VAT Act, the transporter contended that the presumption that the goods have been sold within the State of Assam, when T.P. is not submitted with due endorsement of the exit check gate is a rebuttable presumption. The transporter specifically distanced themselves from the truck No.AP-16/U 6287, laden with gunny bags and said that they have no connection with that truck and the goods. Therefore, levy of tax, interest and penalty is unjustified.
8. The tax liability for the other two trucks i.e. TR-02/1743 and TR-02/1620 which carried raw rubber sheet, was contended to be unjustified in the hand of the transporter under the presumptive clause, as the concerned laden trucks were stolen during transit, for which the FIR was filed by the transporter and the trial in the criminal case i.e. G.R. Case No.955/2005 is now in progress in the Court of the learned Chief Judicial Magistrate, Agartala, for the missing goods and trucks against the charge sheeted accused.
9. The Assam Board of Revenue considered the above projection and found that the truck bearing Regn. No.AP-16/U 6287, from which the transporter had Revn. Petition No.19/2014 3 of 8 distanced themselves, can't absolve them from the liability of tax under the presumptive clause, as the T.P. for the goods in this truck was issued at the entry check gate, in the name of the transporter. Moreover on account of the failure of transporter to produce proof that the rubber sheets carried in the other two trucks, have not crossed the exit check gate of Assam, the Revenue Board concluded that assumption was correctly made under the presumptive provision, as the transporter failed to rebut the legal presumption, through appropriate evidence. Thus by the impugned judgment of 28.4.2014 (Annexure-V), the Case No.30 STA/2010, filed by the transporter was dismissed, by the Revenue Board.
10.1 Assailing the tax liability under the presumptive clause of the VAT Act, Ms. M. Hazarika, the learned senior counsel submits that the Assessing Officer discharges a quasi judicial function, under Section 76(7) of the VAT Act and such exercise has to be performed with responsibility with due regard to the rebuttable nature of the legal presumption, to be drawn against the transporter or the truck driver.
10.2 She submits that the petitioner is not a dealer under Section 2(15) of the VAT Act and is not covered by normal levy of tax, under Section 7 of the VAT Act. But when such non-dealer is assessed to tax under the presumptive Section 76(6) for their failure to produce the T.P.s with the endorsement to the exit check gate, the tax liability can be also on the driver or the person in-charge of the goods vehicle and not necessarily, on the transporter of the goods. Therefore the senior counsel argues that the Assessing Authority should have applied his mind to the case projected by the transporter, before they were made liable to the tax burden, interest and penalty, under the presumptive provision of the VAT Act.
10.3 The petitioner submits that after conclusion of the investigation of the East Agartala P.S. Case No.164/2005, for the two missing trucks and the commodities, charge sheet was filed against 7 accused including the drivers of the trucks. The senior counsel reads the charge sheet to project that the wrongful loss of the goods carried by the transporter worth Rs.13,89,750/- approx. was taken into account against the accused in the charge sheet and accordingly, it is argued that without conclusion of the G.R. Case No.955/2005 which is under trial in the Court of the learned Chief Judicial Magistrate, Agartala, the fastening of tax liability on the transporter, would be wholly irrational.
Revn. Petition No.19/2014 4 of 8 10.4 As regards the liability on account of the gunny bags carried by the truck
No.AP-16/U 6287, the learned senior counsel submits that when the transporter has no connection with this particular truck, it is well neigh impossible for them to rebut the presumption drawn against them and therefore, it is argued that pursuant to the direction issued by the Commissioner of Taxes on 9.2.2010, the quasi judicial authority should have applied his mind to the documents produced at the entry check gate for the gunny bags carried by the truck, to determine whether the petitioner has any connection at all with the goods or the truck No.AP-16/U 6287.
10.5 The transporter submits that the normal practice is to produce all the supporting documents at the entry check gate for the goods carried by any truck and if a particular goods vehicle is not being operated by a transporter, they will have serious difficulty to rebut the legal presumption, drawn against them. Therefore it is argued that the connection of the truck with the transporter will have to be verified by the Assessing Authority on the basis of the documents produced at the time of entry of the truck to Assam, at the entry check gate at Churaibari.
11.1 Representing the Revenue, Mr. B. Choudhury, the learned standing counsel submits that unless the legal presumption is rebutted by the party who is assessed to tax under Section 76(7) of the VAT Act, they can't escape the liability of tax, interest and penalty and accordingly the departmental lawyer argues that the assessing authority had committed no error, in making the presumptive assessment to tax.
11.2 The respondents contend that unless proof is produced that the loaded goods have crossed the Assam border from the exit check gate with appropriate endorsement on the T.Ps., the person responsible for entering the Assam boundary with the loaded vehicles from the entry check gate, is liable to discharge the tax burden unless of-course, the legal presumption is rebutted with appropriate material.
12. As earlier noted, the levy of tax here is not under Section 7 of the VAT Act, which is applicable for registered dealers only. But those who bring in goods into Assam but fail to produce appropriate endorsement from the exit check gate to show that goods have left Assam boundary, can be subjected to tax under the presumptive provision of Section 76(6) of the VAT Act. But in Sodhi Transport Co. vs. State of U.P. reported in (1986) 2 SCC 486, it is clarified by the Supreme Court on the distinction between actual facts and presumption, in the following words:
Revn. Petition No.19/2014 5 of 8
"..........................
14. A presumption is not in itself evidence but only makes a prima facie case for party in whose favour it exists. It is a rule concerning evidence. It indicates the person on whom the burden of proof lies. When presumption is conclusive, it obviates the production of any other evidence to dislodge the conclusion to be drawn on proof of certain facts. But when it is rebuttable it only points out the party on whom lies the duty of going forward with evidence on the fact presumed, and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed the purpose of presumption is over. Then the evidence will determine the true nature of the fact to be established. The rules of presumption are deduced from enlightened human knowledge and experience and are drawn from the connection, relation and coincidence of facts, and circumstances. ............................."
13. The above ratio makes it clear that when a transporter brings goods inside a State, he would be treated to be a dealer for the purpose of levy of tax, when he fails to establish that the goods are transported out of the State, through the exit check gate. In such event, a presumption can be recorded that the goods were sold inside the State with the help of legal presumption. In that situation tax becomes payable by the transporter unless he rebuts the legal presumption, with cogent material.
14. For the sheet rubber, carried in two trucks, an FIR was lodged within a few days of the loaded goods being dispatched from Agartala and the charge sheet of the East Agartala P.S. Case No.164/2005 reflects that 6/7 accused are charged for misappropriation of the sheet rubber, valued at Rs.13,89,750/- approx, which matches the value of goods, in the assessment order. The liability under the presumptive provision of Section 76(6) & (7) of the VAT Act is, inter alia, can be drawn against the driver, the person in-charge of the goods vehicle or the transporter and therefore, without conclusion of the trial in the G.R. Case No.955/2005 progressing now in the CJM's Court, burdening the transporter with the tax liability under the presumptive section, can't be said to be a bonafide discharge of power by the Assessing Officer. Unless the driver or the person in- charge of the goods vehicle, are absolved of the charge of misappropriation of the sheet rubber, carried by the two trucks (TR-02/1743 and TR-02/1620), the fastening of the tax burden on the transporter may not be justified, as the transporter can't be expected to be personally present in every goods vehicle, operating under them. Therefore, the assessment of tax for the sheet rubber, carried by the two trucks for which the resultant G.R. Case No.955/2005, under trial, is not yet concluded, would not be justified. But even while giving this finding, Revn. Petition No.19/2014 6 of 8 it must be said that if the driver or the person in-charge of the goods vehicle are acquitted, the transporter can be made liable to tax under the presumptive clause of the VAT Act in accordance with law.
15. When the transporter claim that they have no connection whatsoever with the gunny bags and the truck No.AP-16/U 6287, it is natural for them to contend that they are not in a position to produce any documents pertaining to this truck, to rebut the legal presumption. However if the petitioner's name is actually incorporated in the T.P. at the entry check gate for the gunny bags, valued at Rs.28,83,355/-, a mistaken entry in the T.P. in the rush of things, cannot entirely be ruled out. But the supporting documents, on the basis of which T.P. was issued for the gunny bags, must have been produced by the driver at the entry check gate at Churaibari. Hence if copies of these documents, which will reflect the date on which the goods commenced its journey from Tripura, are made available to the transporter, they may in turn, produce their business records to rebut the legal presumption, drawn against them. The opportunity that was required to be given to the transporter on account of the order passed by the Commissioner of Taxes on 9.2.2010, must be an effective opportunity and not just a formality and it appears that proper rebuttal opportunity was not provided, in this instance.
16. Hence, all the documents available for the gunny bags carried by the truck No.AP-16/U 6287 should be furnished to the petitioner to enable them to rebut the legal presumption drawn against them and if satisfactory proof is produced to show that the transporter had no connection with the gunny bags and the truck No.AP- 16/U 6287, which entered the Churaibari Check Gate of Assam on 5.8.2005, it will not be logical to hold that the presumption is conclusive against the petitioner. After all, a fair and reasonable opportunity must be afforded to the party to show that actual fact is not as presumed and this is possible only when, all the documents carried by the truck No.AP-16/U 6287, are furnished to the transporter.
17. In so far as the two missing trucks are concerned, if in fact, the driver or the in-charge of the vehicles were responsible for misappropriating the loaded sheet rubber, carried in the two missing trucks (TR-02/1743 and TR-02/1620), to burden the transporter with tax liability in such situation will be an unwarranted exercise. The appropriate stage at which the liability of the transporter can be assumed here is when there is absolvement of the driver and the other accused through acquittal, in the G.R. Case No.955/2005. Otherwise on account of the misdeeds of the driver Revn. Petition No.19/2014 7 of 8 and his cronies, the transporter may be wrongly subjected to tax, whereas the target of the authority should be the persons, who are actually responsible.
18. In view of the above discussion, we set-aside the assessment order dated 18.3.2010 (Annexure-IV), passed by the Superintendent of Taxes, Churaibari Check Post, in respect of the gunny bags carried by truck Nos. AP-16/U 6287 and also the sheet rubbers loaded on the TR-02/1743 and TR-02/1620, respectively. The impugned judgment of the Revenue Board dated 28.4.2014, to this extent is also quashed. However it is made clear that the Assessing Officer is at liberty to re-do the exercise in respect of the sheet rubber, carried by the two trucks, subject to the outcome of the G.R. Case No.955/2005. As regards the tax assessed on gunny bags against the petitioner, they be provided the requisite documents in respect of the goods and the truck No.AP-16/U 6287, available with the authorities of the entry check gate, to facilitate a fair and reasonable opportunity to the transporter, to rebut the legal presumption drawn against them. After due consideration on the relevant materials, the assessment order for the gunny bags can be affirmed or set aside. As the petitioner is seeking benefit of the G.R. Case No.955/2005, they are made responsible to produce the final Court verdict in the G.R. Case No.955/2005. They must also keep the Assessing Officer informed on the progress of the trial, from time to time.
19. With the above order, this Revision Petition stands allowed in the manner indicated, by leaving the parties to bear their respective cost.
JUDGE JUDGE Barman Revn. Petition No.19/2014 8 of 8