Karnataka High Court
Stm Geetha Bhat D/O Keshava Bhat vs The Additional Commissioner Of ... on 29 September, 2010
Bench: Manjula Chellur, K.Govindarajulu
Banga1'o;e¥560 009
IN THE HIGH COURT or' KARNATAKA, BANGALORE
DATED THIS THE 291*" DAY op' SEI3'FEMBER;.
PRESENT
THE HON'BLE MRS. JUs1'IcE»MANJrjLQ§ u
AND '
THE HONBLE MR. K.A.G0VE-NVDAEQ-AJ'UioU
SALES TAX .APP1:AL--f1\;~o§'2o OF' 2009':
BETWEEN
Smt. Geethafl-hat.
D/0 Keshavig 13:13: _ " _ V V
Suresh Bhat »C.o'f:'1'pouh.d-- , V. "
Dongerakeiii "
Mangalofe T. o fl;
... APPELLANT
{By K. Sri. P. E. Umesh,
M / s. Globéaie Law hlide. Advocates]
_ » The A(1ditio;f1*a.1_ Commissioner
' of_sComvinQe1'Cia1Taxes
Zone--I, T erige Bhavan
Ga.ndh_i11a_gTar
RESPONDENT
~Sri."T. K. Vedamurthy, HCGP) M This Appeal is filed u/s 24(1) of the KST Act
-»-aigainst the Revision Order dated 25.10.2008 passed in l\.) No.ZAC~l/MNG/SMR~8 8: 8A/0"/~08, T. No.666/08-09 on the file of the Addl. Commissioner of Commercial Taxes, Zonewl, Bangalore, revising and setting aside the appeal order and restoring the orders of assessmserntiand penalty of the check post authority and _a__cco1'«dir1g_l.y concluding the revision proceedings. Manjula Chellur J ., delivered the follovvi'ng:.;< . «_ _s This Appeal coming on for JUDa'3}__1}._4EIl§T'-2['ll V On our direetion, ._ learned Hl"Government Advocate placed before the forigiifilifile pertaining to the assessm;ent*£o"f sa:i.esita§< for::lt'l51evy.ear 200102, 2002 03 Ltd. {for short 'M/ s.
is perused. The questions of law raised are as on the facts and lllVcirsc1umstances of the case the ' llprloceedings initiated against the Appellant under Sections 28w./AA of the Karnataka Sales Tax Act, 1957 are void ab initio in view of the fact that the goods had become part of local stock of the consignor, who is also a registe_i=ed««.l"".,A dealer under the said Act, before were transported outside.the:
Whether on.' circumstances the "case, }the Respondentfhas c;_}min_itte'd_an error in ignoring ,~t~hef- 's1_1bzn1'"'s_siaon"' of the _ pcilarit the sions of Section A of the Sales Tax Act.
-- lQ5.7'»._vEi"f§»lI1($t""ap}illiCabl€ to the facts of the prelsentdcase ?
mi .Whether A on the facts and " C'i~rVciu1lpstances of the case the 'lvtlfltespondent is right in rejecting the contention of the Appellant that the proceedings initiated against the Appellant under Section 28--AA of the
iv) Karnataka Sales Tax Act, 1957 is Void-
ab--i1'1tio in View of Explanation to the---._ said Section according to which ~ the goods vehicle is presurnedtoibefjgitsé h owner and not the registered own_.er_o__f the Vehicle '?
Whether on facts, ...v'and circumstances case the V i'1o;': ding that for 5 of _E§';p1_anation to Section
- Karnataka Sales Tax Act, of the goods cannot be convsid_e_re.d as the "hirer" of the goods '«.g'«._\?ehic1e and the said Word, "hirer" is it ' afjhlicable to only a transporter who V obtains goods vehicle on hire in case he does not own a goods Vehicle '?
V) Whether on the facts circumstances of the case Respondent is justified in presumption that the"go--ods have been sold only reason transit.
not been s1irren.deree_d4 the check post 'V or that the as '.fGf . consignor order passed
-------- ~ the Karnataka it 1957 given a finding it"t11.élt'».t*he"'- same goods as that the present case have been "tran~sported out of the State of ' Karnataka ?
it The admitted facts in the present case are the appellant is a transporter engaged in the business of ";.{"3+'j" . "
6
transportation of goods. In the month of July 2002, the consignment belonging to a. Company by narne«.:yiv[A/s Vivek Petro -- a registered dealer under Tax Act, 1957 transported consignmeéntthyvtyotfii,gt xprodliettt called 'naptha' from Mangalorefw cont:ention"
department was, the transitijatss vtthiela.wa,sVV"1:éVqfiired to be taken by the driver o1:t"tirer':';p'ei*.s'on Aineharjge of the vehicle at the entry affa.f\*.::§:émmencement of the transit exit check post.
Therefore; '*Sub--section 4 of Sectir)'n"28i.V:};!'tv htofllzd that the consignment did not rnoye' but was sold within the State, f:§.".111:Vti1e present case, the transit pass was issued H I:-y"KanriA{iyr eheckpost, Kannur and the exit checkpost was Attijoelée near Hosur. Adrnittediy, the goods were to reach. the destination outside the State of Karnataka i;e., Pondicherry. On. the basis of non~receipt of transit pass {TP] at Attibele exit within the prescribeti time under the above said provision, they not onl§,.*"~irripo.sed tax but also levied penalty on the The Contention of the appellant,/apssesslelere'f\f.rasfiapartl' from the driver there was authorisetl the consignor i.e., Viveliléetifo, was incharge of the goods. fro'rr1"'th_:e e'orn1nencem'ent of the journey till it reachelcilthel and he was the one who pass but was entrusteClly\tithpiAthle._ over the same at exit of the vehicle was not liablehto «pay or the penalty imposed. Hofwever,lll'thVe or(:ier".clated 24.12.2003 by the Assessing goes tollflshow that the said defence was not " they proceeded to impose tax of 15,is~2iQ"/§ and another Rs.l5,920/-- as penalty. This ..wasu(:h:allenged before the appellate authority in KST No.230/O3-O4.
4. The appellate authority in the present case after taking into consideration that the assess'1n.ent'..on the return submitted by the owner of the"
Vivek Petro, Mangalore, concluded. that "was no i evasion of any tax. 'Fherefor.e, lassurnptionl cannot be levied in the liglitiofp the able to establish the mQ'i"3.I.11er1,tl"'oi'."goods, outs'ide"the State and not sold within v»A'..y¥;;cording to the appellate authority, passed under by the Assistant Comirnissiolncr Taxes, Mangalore, indicatesll of any taxes and all the goods irn}l5ort:ed..byl"MV/ls Vivek Petro were the subject "a,ssessrrlent and all the consignments which ,._.\X7ere"to=..reach'_}~Pondicherry unit belonged to the very owner vl_\:'I/sfvlivek Petro but did in fact reach Pondicherry "alas evident by the Very endorsement of the ,l'S'uperintendent of Central Excise, Pondicherry dated ~-9i:9.2003. It also refers to the release of goods, namely, . 3/;
9 naptha in favour of the consignor and also 1etters__issued by the Deputy Commercial Tax Officer of The assessing authority had come to the entries effected by the consignor theu ' State. Based on this finding,.""th:e_tappellate, allowed the appeal in fa\V}ou"r~.V_%Qt' the._'"s'etting'V' aside the Orders thfi""'CVha¢T?£"e..postA"offieer dated 24.12.2003. The took up the matter by issued a show cause upon him to explain the assessee appeared before"--.th.e and submitted the explanation. However": the revisional authority found th'e...":o1i:der"i--of thewatppellate authority as improper and interest of the State revenue for the following reaisorisz " The appellant is the owner of goods vehicle has obtained transit Pass No.O185016 dated 15.06.02 for transportation of Naptha from ST CP Kannur, but faiied to surrender the Transit pass at the Exit Check Post at Attibele within 17.06.02. On enquiry through correspondence with CTO Attibele Check Post the CTO Kan11.u:'1=.._l'~v._ ascertained that the records of post do not show passage o«f:."goodsl"'l vehicle No. KA.14--8699 thro_uigh..':C.heck-AV Post and the transitfpass«was .also«.1_1o_t"' surrendered and there 'icoritravened-..°Tf Section 28AA[2) of KS'l'----Act 195c7;'~'irip ' The has al1ovv'e'd'" the Appeal in'--_s'o_far gas tax and penalty 1.1/s 28AA(5) coricernedr""<.vhich._',_is"_ aagainst the Jud"i1nerit¥_ of Hon, "S_i.1p_r__e.iI1e Court of ,T_.r'1dia';jin;_ the case of civil Appeal No.3787 of,-""'20"Os. "ix/;I;;/s" is:.ooi>ALA KRISHNA V AND OTHERS vs STATE' or t {PxRNA:,TAKF'i.'l.VV'ith. CA Nos.3'788w384-4 of
-. '2006:"-daltedl'--_2:3--.07.2007. Therefore it is '--her'e,by'..:prop¢o's<ed to set aside the said "appeal o'rd"er_}in so far as the provisions df._Sect'ion- 28AA {4} & (5) are concerned ElI1(l.""*[,()V___'I_'_C1IllJ[ the matter to the Check "Post Office for fresh consideration in 'view of above mentioned Judgment. A A FAA has misread the provision of ' -Section 28(6) of KST Act while allowing the appeai as the said provisions relate to conclusion of provisional assessment order by the inspecting authority which is independent of provisions of section 28AA(4). The proceedings u/s 28(6) and 28AA (4) are independent and the "x\M 1. gf .
powers are confirmed with the inspecting authority and the CPO respectively. On the basis of orders passed u/s 28(6) by the ACCT {Ins} Mangalore the FAA should not hav-ep:'--.c. linked this provisional order W_ith"th-e___"
quantification of taxes made u,"'-st" it (4) made by CPO. Therefore;'»~o::n..this--_ _ count also, the appeal"order._passVed_ by" . FAA suffers from illegalityzand. liable b<~:<1uashed." V "* ' t ' Ultimately the orders of were revised and set--aside.._ Th.'elllloi'djerst'-.of assessment and penalty of the check post Ayauthoritylvve_:?el.'i'estored.
5. tljie Sales Tax Act reads it by road through the State l"a.nd tissue of transit passw [l]Where a vehicle p is carrying goods taxable under this Act- l [a] from any place outside the State and bound for any place outside the State and passes through this State; or [b] and which goods are imported into the State from any place outside the country and such goods are being carried to any place outside the State, the driver or any other persondnwehargep vehicle shall furnish the necessary and obtain a transit pass in duplicate eontaii1iV_rigd"g such. particulars as may.Jbey_prese'ribed_v,. 'f1"o4r'nV it officerdnwcharge of the first o1'V:b.aI*r;er after his entry intopathe St'ate=-- or aft'er:v'rri'oVenient'»rV has commenced fronigthe State. as _"t=he'.ease may be, or from the,officer.enj'poWered 'for-th.e'3purposes of subsection. [3}--_p it 28wA, upon interception of thyeigoovds yefn'ieIe~V..'aft'er its entry into the Statsepfir after niovefiiént___1i{as commenced as the _ease rfziay. be.
the personwinwcharge of the vehie.1e'vsha.11d'dei'itrer within the stipulated time a ueopy of"'--.the___ptyransit pass obtained under sub- to the officerwimeharge at the last ' or barrier before his exit from the State. If for any reason, the goods carried in a goods Vehicle are, after entry into the State (or " after Commencement of movement, as the case may be] not moved out of the State within the time stipulated in the transit. pass, the owner of the goods Vehicle shall furnish to the officer empowered in this behalf the reason for, such delay and other particulars, if any, the1*e:'off"'ar1d such officer shall after due enqui1jy§_:"elXteiid'. time of exist by suitably t_ransitr'.._ pass:
Provided that where Vehicle are, after their.' entry Vint_of'f..the_j'"State, (ori after commencement f4fo«f;:mVoverricntl,'l as} the case may be} State by any other Vehicle or 'onus of proving that goods Lact-Liallygirioved out of the Statebeljflion iowriermlof the vehicle who "goods into the State.
the d.fiy'er5or any other personwinwcharge of l the V€lV1lCl:€Hd()gfi'S not comply with sub--section [2], it presumed that the goods carried thereby fbefen sold within the State by the owner of therlliyehicle and shall, notwithstanding anything 2 , lcoritained in sub--section [5] of section 5, be assessed to tax by the officer empowered in this behalf in the prescribed manner.
(5)if the owner of the Vehicle (having obtained the transit pass as provided under s'ub--s.ection_ (1) fails to deliver the same as provided:'un_de_r' S€CtiOI1[2), he shall be liable to penalty a sum not exceed_in.g.d4ouble'.ofV ' tax leviabie on the goods {6)The amount an'd.__tl':eglVpenalty 'levied' under this Section recovered in the prescribed II1E1111'iEI'.
(7)W'_l1--ere t.11err--eIwnerjrs.ryor vehicle who is assessed }7t'o_.t.:ax.ul:1der,s1:b'--sec'tion (4), is carrying after a'ssess'i:1e1'1t; any goods taxable under vehicle from any place outside the from within the State, as thepasvellinaypgtzelfand bound for any other place "outside . State and is passing through the State,' the «prescribed authority may demand from _ an amount equivalent to two times the A on such goods under this Act as security.
[8]The prescribed authority after being A satisfied that the goods carried in the goods Vehicle in respect of which the security amount under sub~section[7) was collected, has passed through the State, shall refund such...Vseeu_rity amount to the owner.
[9)The prescribed authority :na'yss'ijbyfltlan order adjust the whole' or..plAan'yj security amount towards anygmounvtpof or penalty payable under this such owner).
Explanatiolng In a. a vehicle owned by 'hired for
transp;ortat'ion.v of if V some other pers"on_._l-lllthelhirer7.ofi't'l1.e ifehiele shall for the deemed to be the
6. 'Pr_4etsurription" under sub--section (4) of sec. 28- Actf ur1d_i__s_pVutedly is a rebuttable presumption. » Rebuttable.éprepsumption would mean the person against ifV2ih'on1v.Vthejjnfnpugned order came to be passed by the cheelopost officer must be able to satisfy the authorities A th;at~«tthere was no evasion of payment of tax. If the l intention of the legislature were to be that irrespective of lfi payment of tax on the goods in question, rebuttable presumption was available to the assesseefi-._then Whether those goods were subjected to or not would be irrelevant. In View rebuttable evidence was allowecllto on by the party in question, _it_ woiildlllbe openljfor establish that in fact TP wasfimaeatfat Check post or that the goorls'~p._in out of the State. Therefore, the State would not in ease, the contention of the appellantteonvsist_e'nVt1y.:vigtas to the effect that along with the«.idriv=er ofnlthevhvehicle, the owner of the goods also »t:raveIl.ed'.be_oause the consignor and the consignee were one-«and thely'a1same. Therefore, the entire formalities at theéfcheelghpost were looked after by the representative of the"«-goolds. Hence. the driver who normally would be ' illiterate would not know the details. Apparently in this case, the goods had to move from Mangalore to Pondicherry which is outside the State. Sub~secI'----.[2] of section 28~AA contemplates that the goods the owner if moved out of the State, transit pass, i.e. the driver or;"theuporsoni'in_.:of the vehicle. The presumption "under siibsecf} already stated is a rebuttaole preslurnlptyionhi and the appellant relies uponnthe o.rder,ffof_V'the«.assessrnent of the consignor or the consignieep oftlie fg'ood~si,v'~
8. It revenue that in View {of --_ by the check--post officer pertainingto_M'/slit 4Petro, investigation was made withigregard to'-..the_&accounts of M/s. Vivek Petro and wing of the revenue also made a H-1 investigation both at Mangalore and so far as the business of M / s. Vivek Petro. fj'»'l'he«-.n1aterial that was placed before the assessing officer at the time of final order of assessment indicates whatever goods that were imported, Le. a product calied 'naptha' was in fact sent to Pondhicherry and was accounted at Pondicherry. It was even Central Excise Department at Pondicherrghjtt noted that whatever duty that was Central Excise Department was alsopaid and"thee-5e'"are--..L the findings of the assessing.'authority "'\Vi1eVr;;4 once the V assessing authority': ._ the" assessment process as a part of the --'ijnt'o the missing of / or non--acc;'oLi'?;j.ting:3of '1-['F's. at.v_e>i'it»-check post, so far as M/is it it was satisfied that ail the goods. that which were meant to be sent. to Porichicherryf reach Pondichery and not even ' Aaistinigie '"incidentWAwhere the revenue was able to it was soid within the State. He was jtistified' inndsaying that the assessee i.e. M/s. Vivek Petro had accounted ali the goods that were imported by it and nothing escaped from the tax. In that View of
-*'--'the matter, when once by way of rebuttal evidence, the I 9 appellant relies upon the assessment order pertaining to M/s. Vivek Petro, in the absence of the establising that the consignment in ques'ti*on.:ly::did'r move outside the State, revisional'authority vvas}n'ot ' justified in setting aside the °o.;~di{1_¥éfl authority. As a matter of the revisional-Jaiithorityll did not even refer to.»x§rhatQ..'vvaslfthes.rebiittablel evidence relied upon by the owlnerlof vehicleand whether the order of thetassessing an_thorityl.j_h.ad:freaehed finality or not.
the learned Government Advocate'--ii_s"fair" bring to our notice that the order of assessmentypertaining to M/ s. Vivek Petro was su.];aj«ect"matter of suo moto revision under section re-visional authority confirmed the said order of assessment of the assessing officer. When once the if of assessment of M/s. Vivek Petro has reached ' finality, it would not be open to the Department to say 20 that the presumption under sub--sec. [4] of Sec. 28f_AA is still available and the same is not rebutted. the above discussion and reasoning, we."are.y:"oft opinion, the appeal deserves to:be"allowepd._:v." Accordingly, the app-eal..__is alltowedyseitti'1:gvasid'e ' order of the revisional If any amount has the appellant either towards». shall be refunded date of receipt of a copy '.
JUDGE p s&/-
t JUDGE