Allahabad High Court
S.G. Express vs Commissioner Trade Tax on 23 July, 2010
Author: Pankaj Mithal
Bench: Pankaj Mithal
Reserved Case :- SALES/TRADE TAX REVISION No. - 1693 of 2006 Petitioner :- S.G. Express Respondent :- Commissioner Trade Tax Petitioner Counsel :- Kunwar Saksena Respondent Counsel :- S.C. Hon'ble Pankaj Mithal,J.
The assessee is a transporter. He has filed this revision against the order of the tribunal dated 2.8.2006 passed in second appeal no.134 of 2006, Commissioner, Trade Tax, U.P. Vs. S/s. S.G.Express, Vishnu Gali, Vishwas Nagar, Sahadara, Delhi whereby the tribunal after setting aside the order of the first appellate authority allowed the appeal and upheld the penalty of Rs.80,000/- imposed by the assessing authority in exercise of the power under Section 13A(4) of the U.P. Trade Tax Act (hereinafter referred to as "the Act").
The dispute of penalty relates to assessment year 2005-06. The assessee was transporting 1026 suit cases allegedly from Delhi to Guwahati vide trucks no. HR 55 B/3185 and DEL 1E/3625. He produced the relevant documents at the central check-post, T.P. Nagar, Ghaziabad showing the name of the consigner as Ashish Attachi Centre, 12/6 Mangolpuri, Delhi and insisted for issuance of the necessary Transit Form 34 in accordance with Section 28-B of the Act. The officer-in-charge of the check-post instead of issuing Transit Form detained the goods on the ground that the consigner as disclosed in the documents produced is fake and non-existent. The goods so seized were directed to be released on furnishing security of Rs.80,000/-. On second appeal to the tribunal, though the seizure was upheld but the security was reduced to Rs.20,000/-. The assessee on furnishing security and on release of the goods applied for Transit Form whereupon Transit Pass No.2859 dated 8.9.2005 was issued by the officer-in-charge of the check-post after due verification of the documents which were found to be proper and in order. The assessee surrendered the aforesaid Transit Pass at the exist check-
2post while leaving U.P. on 8.9.2005. Even though the assessee was issued a Transit Pass which he had validly submitted at the exit check- post, penalty proceedings under Section 13A(4) of the Act were drawn against him and a penalty of Rs.80,000/- was imposed. The said penalty order on appeal was set aside by the Joint Commissioner (Appeal), Trade Tax, Ghaziabad vide order dated 15.2.2006. However, on the second appeal preferred by the department, the penalty order has been restored. Thus, this revision under Section 11 of the Act has been preferred by the assessee.
I have heard Sri Kunwar Saxena, learned counsel for the assessee and Sri Bipin Kumar Pandey, learned Standing Counsel for the respondents.
Sri Saxena has argued that once the Transit Form was issued to the assessee and the same was duly submitted at the exist point, the presumption is that the goods have passed through U.P. on valid documents and, as such, there is no question of imposing penalty.
The submission of learned Standing Counsel in reply, is that as the consigner on enquiry was found to be fake and non-existent the authorities rightly believed that the goods were being transported from within the State of U.P. to outside with the intention to avoid trade tax.
Section 28-B of the Act is not a charging Section but it provides for a machinery to check evasion of trade tax and to ensure that the goods which are being carried from one place to another through the State of U.P. are not sold within the State of U.P. The aforesaid Section reads as under:
"28-B. Transit of goods by road through the State and issue of authorisation for transit of goods. - When a vehicle coming from any place outside the State and bound for any other place outside the State, and carrying goods referred to in sub-section (1) of Section 28-A, passes through the State, the driver or other person-in-charge of such vehicle shall obtain in the prescribed manner an authorisation for transit of goods from the officer-in- charge of the first check-post or barrier after his entry into the State and deliver it to the officer-in-charge of 3 the last check-post or barrier before his exit from the State, failing which it shall be presumed that the goods carried thereby have been sold within the State of the owner or person-in-charge of the vehicle:
Provided that where the goods carried by such vehicle are, after their entry into the State, transported outside the State by any other vehicle or conveyance, the onus of proving that goods have actually moved out of the State shall be on the owner or person-in-
charge of the vehicle.
Explanation. - For the purpose of this section, the hirer of the vehicle shall also be deemed to be the owner of the vehicle."
From a plain reading of Section 28-B of the Act it is evident that for drawing the presumption of sale of goods within the State of U.P. two conditions are necessarily to be satisfied. First, the owner or the person-in- charge of the vehicle have failed to obtain the transit pass from the first check-post or barrier; or/and secondly he has failed to deliver it to the officer-in-charge of exit check-post while leaving the state of U.P. The aforesaid provision nowhere provides that any irregular or incorrect description in the documents submitted for the purpose of obtaining transit form or non-existent of the consigner would also attract the presumption laid down in the aforesaid provision or any penalty. At best, in the event of above irregularities, the officer-in-charge of the check-post can only detain the goods or refuse to issue transit form.
In the case at hand admittedly, a transit form was subsequently issued to the assessee meaning thereby that the issuing authority was satisfied that the goods are coming from outside U.P. for being carried through U.P. to a destination again outside U.P. It was duly produced at the exit check-post within time and no discrepancy in its production was found. Therefore, the twin conditions laid down under Section 28-B of the Act for drawing the adverse inference of sale of the goods in the State of U.P. were duly satisfied. Thus, the penalty provision of Section 13-A(4) does not get attracted.
In view of above discussion, I am of the opinion that whether the consigner or transporter are fake or are not traceable is not a material consideration for drawing any adverse inference when the person-in-4
charge of the vehicle has obtained a valid transit pass at the entry check- post and had duly produced the same at the exist check-post within time. Here the obtaining of transit pass and its surrender is in conformity with the provision of Section 28-B of the Act.
In Madhya Bharat Transport Carrier, Agra Vs. Commissioner of Trade Tax, U.P. 2003 NTN (Vol.23) 1009 it has been held that all that is required to be seen is whether the goods have actually been brought from outside of U.P. and taken outside of U.P. and that the goods must tally with the accompanying documents and as such it is wholly irrelevant whether the consignor or consignee are traceable or not.
In M/s Murliwala Agrotech Ltd. Vs. Commissioner of Trade Tax, U.P. Lucknow 2005 NTN (28) 198 it has been held by this Court that the goods being transported through U.P. cannot actually be seized at the entry check-post, not even on the ground that the goods were different from the goods declared in documents produced for obtaining transit form.
In view of the above, the validity of the seizure itself becomes doubtful and as such the imposition of penalty on the ground of seizure can not also be justified. It may be noted that it is not the case of the department that the goods as per the transit pass were unloaded within the State of U.P. or found to be different or not tallying with those mentioned in the form or that they were not properly accounted.
Apart from the above, it is well recognised that for imposting penalty there must be a clear intention to evade payment of tax and mere seizure of the goods cannot be sufficient in itself for imposing of penalty.
The tribunal has not recorded any finding of intention to evade tax on the part of the assessee in resorting to the order of penalty and has not even taken into consideration the impact of the subsequent issuance of the transit pass to the assessee which impliedly indicates that the officer- in-charge was satisfied that the goods were coming from outside U.P. for being transported through U.P. to a destination outside U.P. In the above background of facts and circumstances, no presumption can legitimately be drawn that the goods were not actually 5 coming from outside U.P. Thus,, the penal provision of Section 13-A(4) of the Act does not get attracted.
In view of above facts and circumstances, the impugned order of the tribunal dated 2.8.2006 is unsustainable and is hereby set aside and that of the Joint Commissioner (Appeal), Trade Tax, Ghaziabad dated 15.2.2006 is restored and affirmed.
The revision accordingly stands allowed with no order as to costs.
Order Date :- July 23, 2010 BK