Bikaner Assam Roadlines India Ltd. vs Commissioner, Trade Tax

Rajes Kumar, J.—These two revisions u/s 11 of the U.P. Trade Tax Act (hereinafter referred to as the "Act") are directed against the order of the Tribunal dated 20 September, 2003 both relating to the assessment year, 1988-89.

Revision No. 41 (defective) of 2004 relates to assessment proceeding and revision No. 42 (defective) of 2004 relates to penalty proceeding u/s 15A(l)(q) of the Act.

Brief facts of the case are that the applicant is a transporter. Vehicle No. DL-1G/2664 belongs to the applicant. It is alleged that the vehicle was driven by the driver, Sri Kamlesh Yadav, son of Chennai Ram Yadav, who was the employee of the applicant. In the vehicle 222 cartoons of parchun goods valuing Rs. 3,67,982/- , which were meant for transport from Delhi to Gauhati. The driver of the vehicle obtained transit pass No. 2095 dated 21.04.1998 at the entry T.P. Nagar check post in respect of 222 cartons of parchun goods, which was to be surrendered at Tankuhiraj, district Deoria by 30.04.1998 u/s 28-B of the Act. The case of the applicant is that when the good''s could not reach Gauhati by 26.04,1998 and the applicant had a doubt about the/misappropriation of the goods by the driver of the vehicle on 26.04.1998, a first information report was lodged with the Station Officer Sahibabad, district Ghaziabad. The said F.I.R. was lodged against the driver of the Vehicle, Sri Kamlesh Yadav, son of Sri Chennai Ram Yadav, resident of village and post Chatai Kala, Tehsil Shahganj, district Jaunpur and his assistant Hardeo Singh, son of Arvind Kumar. Said F.I.R. was registered by the police u/s 406 I.P.C. Application and F.I.R are annexed as annexure-2 to the revision. However, on 24.04.1998 the chaukidar of the village Kurari, district Hamirpur found the aforesaid truck standing with fire. He reported to the police, station Hamirpur who had sent information to the police station Ghaziabad. Applicant also informed to the police station Sahibabad about the vehicle being standing at Hamirpur. It appears that on 17.06.1998 report was given by the police that on 01.06.1998 vehicle no DL-lG/2664 was found in the area of police station Kurari, district Hamirpur, in which goods relating to the case was not found and the vehicle was found burnt from the front side. In pursuance of the report, charge sheet has also been filed on 04.03.1998 u/s 406 I.P.C, which is annexure-5 to .the revision. The vehicle was insured and, therefore, on the information being given to the Insurance Company, survey was conducted by Sri S.K. Gupta, Surveyor and Loss Accessor. Report of the surveyor is annexed as annexure-3 to the revision. A perusal of the report shows that it only reported the loss of vehicle and there is no reference to the goods. On the information being received that alleged Form-34 No. 2095 dated 21.04.1998 was not surrendered at the exit check post. Proceeding u/s 7(4) and Section 15-A (1) (q) of the Act were initiated and after consideration of the reply of the applicant, a sum of Rs. 54,375/- was imposed towards tax vide order u/s 7(4) a sum of Rs. 2,00,000/- had been imposed u/s 15-A (1) (q) of the Act towards penalty. Applicant filed two appeals before the Deputy Commissioner, Trade Tax, Ghaziabd. First appellate authority allowed both the appeals in part and reduced the amount of tax to Rs. 43,500/-and amount of penalty to Rs. 60,000/-Being aggrieved by the order of first appellate authority, applicant as well as Commissioner of Trade Tax filed appeals before the Trade Tax Tribunal, Ghaziabad, who vide order dated 20.09.2003 rejected all the four appeals.

Heard learned Counsel fro the parties. Learned Counsel for the applicant submitted that the facts and circumstances shows that the goods were misappropriated by the driver of the vehicle and no case had been made by the revenue that there was any involvement of the applicant in disposing of the goods and, therefore, for the criminal act of the driver, the applicant should not be subjected to liability of tax under the Act and should also not be subjected to penalty. Learned Standing Counsel submitted that admittedly, the vehicle belongs to the applicant and the driver of the vehicle was the employee of the applicant and, therefore, for the act of the driver, the applicant is liable to tax. He submitted that the order of Tribunal both in respect of the assessment and the penalty is liable to be upheld. Learned Counsel for the applicant submitted that there is no finding that the goods have been sold inside the State of U.P.

I have perused the order of the Tribunal and the authorities below. Section 28-B of the Act reads as follows:

Transit of goods by road through the State and issue of [authorization 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 [authorization 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 the Last Check Post or barrier before his exit from the state, falling which it shall be presumed that the goods carried thereby have been sold within the State by 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: In a case where a vehicle gowned by a person, is hired for transportation of goods by some other person, the hirer of the vehicle shall for the purposes of this section, be deemed to be the owner of the vehicle.

Section 15-A (1) (q) of the Act reads as follows:

Penalties in certain cases- (1) If the Assessing Authority is satisfied that any dealer or other person? (q) fails to obtained [authorization for transit of goods] or to deliver the same, as provided in Section 28-B or:

A perusal of the order of the first appellate authority and the Tribunal shows that the fact stated by the applicant that the goods have been misappropriated by the driver in respect of which, F.I.R. was lodged and the vehicle was found at district Hamirpur in a burnt stage and have not been disputed. Perusal of the surveyor report and the police report shows that when the vehicle was found in burnt stage, the goods were not found. No one has reported that the goods were burnt. Even it is not the case of the applicant that the goods were burnt alongwith the vehicle. I do not agree with the submission of the learned Counsel for the applicant that in absence of any positive evidence that the goods have been sold inside the State of U.P. and in the absence of any evidence that in the mis-appropriation of goods, there was involvement of the applicant, liability of tax can not be fastened on the applicant. u/s 28-B of the Act, in case of non-surrender of transit pass, the presumption is that the goods have been sold inside the State of U.P. Hon''ble Supreme Court in the case of Sodhi Transport Co. and Anr. Etc. v. State of U.P. and Anr. reported in 1986 UPTC 721 held that such presumption.isrebuttable, which can be rebutted; by adducing the evidence by the person who has obtained the transit pass ln: the present case, no evidence has been adduced to prove that the goods have not been sold inside the State of U.P. and, therefore, the presumption of sale inside the State of U.P. can not be held, stand rebutted. To rebut the presumption, burden lies upon the party, who has taken Form-34 and not on the revenue. In the present case it was found that the transit pass has not Been surrendered, therefore, under, Section 28-B of the Act, it has been rightly presumed that the goods have been Sold inside the State of U.P in the absence of any evidence to the contrary. Argument of learned Counsel for the applicant that the misappropriation of the goods was made by his driver and not by him and no liability of tax can be created against the applicant can not be accepted. Admittedly, vehicle belongs to the applicant and the driver was an employee of the applicant and, therefore, for the act of the driver, the applicant is liable to tax. Therefore, the tax has been rightly assessed against the applicant.

For the reasons stated: above, I upheld the order of the Tribunal so far as it relates to the assessment.;

Revision No. 41 (Defective) of 2004 is accordingly, dismissed.

So far as revision No. 42 (Defective) of 2004 with regard to penalty is concerned, in my opinion, on the facts and circumstances, the levy of penalty at Rs. 60.000/- is excessive. The facts of the case prima-facie does not establishes the involvement of the applicant in misappropriation of the goods but at the same time the applicant can not be absolved from his responsibility for the act done by its employee. On the facts and circumstances, a sum of Rs. 10,000/-towards penalty would be reasonable.

In the result, revision No. 41 (Defective) of 2004 is dismissed and revision No. 42 (Defective) of 2004 is allowed in part and order of the Tribunal is modified to the extent reducing the amount of penalty from Rs. 60,000/- to Rs. 10,000/-.