Allahabad High Court
I.C.I. India Limited vs Commissioner Of Sales Tax on 10 March, 2003
Equivalent citations: [2003]134STC286(ALL)
Author: Rajes Kumar
Bench: Rajes Kumar
JUDGMENT Rajes Kumar, J.
1. This is a revision filed under Section 11 of the U.P. Sales Tax Act, 1948 against the order of Tribunal dated September 3, 1990 relating to the assessment year 1982-83.
2. The brief facts of the case are that the applicant was carrying on business of manufacture and sales of chemical fertilisers and was registered under the U.P. Sales Tax Act as well as under the Central Sales Tax Act. Applicant purchased electrical goods worth Rs. 5,75,000 from M/s. Bharat Heavy Electricals Limited, Bhopal and for the import of said electrical goods issued one form XXXI No. FY-101782. When the vehicle reached at Masaura check-post on January 6, 1983 the driver of the vehicle submitted bill, builty and form XXXI No. FY-101782. On verification, check-post officer found that in form XXXI details of the bill, builty was not filled and though there was stamp of the applicant but there was no signature of any officer. However, in form XXXI the description of the goods, quantity and value were mentioned and it was also signed by the office Superintendent of BHEL, Bhopal, the sender of the goods. Check-post officer found that form XXXI was not properly filled and thus goods were seized. Subsequently, the goods were released on furnishing of security. In pursuance of seizure of goods a proceeding under Section 15-A(1)(o) was initiated for the violation of Section 28-A. The applicant filed reply which was not found favour and the assessing authority levied the penalty at Rs. 1,03,500 under Section 15-A(1)(o). The applicant filed appeal before the Deputy Commissioner (Appeal) which was allowed in part. The amount of penalty was reduced to Rs. 86,500. Dealer filed second appeal before the Tribunal which was allowed in part. Tribunal has confirmed the levy of penalty and reduced the quantum of penalty to Rs. 71,000. Being aggrieved by the order of Tribunal, the present revision has been filed.
3. I have heard Sri Bharatji Agrawal, learned Senior Counsel assisted by Sri Piyush Agrawal appearing on behalf of the applicant and Sri M.R. Jaiswal, learned Standing Counsel.
4. Learned counsel for the applicant contended that the applicant was the manufacturer of chemical fertiliser and had imported electrical goods not for sale but for use in its factory and therefore, provisions of Section 28-A was not applicable inasmuch as the electrical goods was not liable to tax in the hands of the applicant. He further contended that inadvertently, some of the columns of form XXXI remained unfilled, though, the description of goods, quantity and value was mentioned and since the bill was submitted along with form XXXI before check-post officer merely because bill and builty numbers were not mentioned in form XXXI it cannot be said that the substantial compliance was not made. Further, since the defect was only procedural in nature no penalty could be levied. He submitted that the assessing authority and the appellate authority were not made out any case of an attempt to evade the tax which is condition precedent for levying the penalty under Section 15A(1)(o). In support of his contention, he relied upon a division Bench case of this Court in case of Jain Shudh Vanaspati Ltd, v. State of U.P. reported in [1983] 53 STC 54 ; 1983 UPTC 198, Commissioner of Sales Tax v. B.N. Rama & Co. (Textiles) reported in 1984 UPTC 999, Garg Associates Pvt. Ltd., Ghaziabad v. Commissioner of Sales Tax reported in 1993 UPTC 79 and Commissioner of Sales Tax v. Burman Udyog, Noida reported in 1998 UPTC 560.
5. In reply to the submission made by the learned counsel for the applicant, learned Standing Counsel submitted that non-filling of some of the columns in form No. XXXI is not procedural lapse and in the absence of complete form XXXI it cannot be said that the goods were imported against form XXXI.
6. I have perused the order of Tribunal and authorities below. Tribunal has recorded the categorical finding that the goods were not for sale. This fact has not been disputed by any of the authority and even by learned Standing Counsel. Since the goods were not for resale, it was not liable to tax in the hands of the applicant. Thus, Section 28-A was not applicable because goods were not liable to tax, in the hands of the applicant. Section 28-A reads as below :
"Section 28-A(1) :
(1) Any person (hereinafter in this section referred to as the importer) who intends to bring, import or otherwise receive, into the State from any place without the State, any goods liable to tax under this Act in such quantity or measure or of such value as exceeds :--
(a)(i) twenty kilograms in the case of food grains, cereals, pulses, soyabeen and all products thereof, and all raw materials including resin, rosin and oil seeds used for extracting oils of any kind ; and
(ii) rupees fifty, in the case of other goods ; or
(b) the quantity, measure or value notified by the State Government in that behalf, in connection with business, shall obtain the prescribed form of declaration on payment of the prescribed fee from the assessing authority having jurisdiction over the area where his principal place of business is situated or, in case there is no such place, where he ordinarily resides :
Provided that where the importer intends to bring, import or otherwise receive such goods otherwise than in connection with business, he may, at his option, in the like manner obtain the prescribed form of certificate."
7. This aspect of the matter came up for consideration before the division Bench of this Court in the case of Jain Shudh Vanaspati Ltd. v. State of U.P. [1983] 53 STC 54 and held that :
"There has been some controversy before us with regard to the meaning, scope and ambit of the expression 'any goods liable to tax' used in Section 28-A(1) of the Act. Use of the expression appears to be unhappy inasmuch as there is no provision in the Act which makes any particular goods as such liable to tax under the Act. A perusal of Sections 3-A to 3-D of the Act shows that it is a dealer who has been made liable to pay tax on the turnover of his sales or purchases of goods. Section 4 of the Act makes a provision for exempting, in certain circumstances, the turnover of sale and purchase of goods from payment of tax. It, inter alia, provides that sale or purchase of any goods by All India Spinners' Association or Gandhi Ashram, Meerut and their branches, or by such other persons or class of persons as the State Government may, by notification in the Gazette, exempt. It thus appears that the Act contemplates that even though the turnover of sale or purchase of goods may be taxable in the hands of a particular dealer, the same goods may not be so taxable in the hands of another dealer. In the circumstances, 'any goods liable to tax under the Act' cannot be identified as any particular goods in respect whereof tax can be levied under the U.P. Sales Tax Act. In the circumstances the said provision has necessarily to be understood in the context of turnover of goods and the person in whose hands such turnover becomes liable to be taxed under the Act. In our opinion, it is only such goods which can, as contemplated by new Section 28-A(1), be said to be liable to tax as are intended to be sold or purchased inside the State by a person in whose hands the turnover thereof is liable to be taxed. In a case where goods are not intended to be sold by a person inside the State, no question of its turnover becoming liable to tax can possibly arise. It will not be possible to consider them as goods liable to tax even though the turnover of similar goods in the hands of some other person may be so liable. It thus appears that one of the necessary conditions for applicability of Section 28-A(1) and for obliging the persons importing goods to obtain requisite declaration is that such person should be importing into or otherwise receiving in the State goods which are intended to be sold inside the State in such circumstances that the turnover thereof can be taxed in accordance with the provisions of Act...."
8. In the case of Garg Associates Pvt. Ltd. v. Commissioner of Sales Tax 1993 UPTC 79 the goods sought to be imported was raw material and was not accompanied by form XXXI. This Court held that no penalty could be levied under Section 15-A(1)(o) because raw material was not liable to tax in the hands of the applicant.
9. In the case of Commissioner of Sales Tax v. Burman Udyog, Noida 1998 UPTC 560 this Court held that if the goods sought to be imported were for use as raw material and not for sale, no penalty could be imposed under Section 15A(1)(o) even if the goods were not accompanied by form XXXI.
10. In the case of Commissioner of Sales Tax v. B.N. Rama & Co. (Textiles) 1984 UPTC 999 weight and value of goods were not mentioned in the declaration form. This Court held that mere omission to mention the weight, value cannot result into a substantial non-compliance of procedural law.
11. In the case of Modi Industries Ltd. v. Commissioner of Sales Tax 1995 UPTC 920 this Court held that mere on technicalities penalty under Section 15-A(1)(o) cannot be levied unless the case of an attempt to evade the tax is made out.
12. In the case of Sri Mewa Lal and Sons v. Commissioner of Trade Tax reported in 2002 UPTC 165 this Court has held that it is necessary for imposition of penalty under Section 15-A(1)(o) to record the categorical findings that there was an attempt to evade the tax.
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 of 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)(o) 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.