Calcutta Express Transport Co. vs Commissioner of Trade Tax

Abhinava Upadhya, J.—Heard Shri Kunwar Saxena, learned Counsel for the applicant and Shri B.K. Pandey, learned standing counsel for the department

The present revision has been filed against the order of the Tribunal dated 21.07.2001 passed in Second Appeal Nos. 651 of 2000, relating to the assessment year 1998-99.

The brief facts of the case are that the applicant is a transporter. On 24.11.1998 a survey was made in the godown of the applicant. During the survey 56 token slips and 2 challans being No. 78 and 79 of Vehicle No. WB-03A/4751 were seized. The said vehicle belongs to the transporter. The goods mentioned in the challans and token slips were not found recorded in the account book of the transporter. On the basis of these documents, assessing officer held that these goods were imported from out side the State of U.P. in the garb of challan Nos. 78 and 79, and thereby proceeded against the transporter, u/s 15-A(1)(o) of the U.P. Trade Tax Act by imposing penalty to the tune of Rs. 3,18,440/- being 40% of the value of the goods which was estimated at Rs. 7,96,100/-. Upon the aforesaid seized documents an enquiry was made and out of 56 token slips seized, by way of sample 9 were sent to the hand writing expert for verifying the hand writing on the aforesaid token slips, and the documents submitted by the transporter himself at the check post, Naubatpur, Varanasi being the challan No. 222299. It was reported that the hand writing was the same, and therefore, an inference was drawn that the said goods mentioned in the 56 token slips were also transported by the applicant. However, since no goods were found in the godown, it was presumed that the said goods must have been sold by the applicant or must have been delivered to unknown consignee.

Shri Kunwar Saxena, learned Counsel for the applicant has put forward a case that there was no material before the concerned authority to impose penalty as the conclusion drawn by the authorities was based on conjuncture and surmises and for the aforesaid purpose any finding arrived at on the basis of suspicion and surmises cannot be used for the purpose of imposing penalty. Shri Kunwar Saxena for the aforesaid purpose has relied upon the decisions in the case of Narayan Swaroop Jain v. Commissioner of Trade Tax, U.P., Lucknow, reported in 1980 U.P.T.C. 99 and Har Swaroop Shiv Nandan Kumar, Bareilly v. Commissioner of Sales Tax, U.P., Lucknow, reported in 1995 U.P.T.C. 419, wherein it has been held that penalty cannot be imposed on the basis of mere suspicion, there has to be concrete proof with the department to proceed. Shri Kunwar Saxena has further relied upon a decision in the case of Flowsene Fragrances, NOIDA v. Commissioner of Trade Tax, U.P., Lucknow, reported in 2003 U.P.T.C. 626.

Upon imposition of penalty, an appeal was filed before the first appellate authority, and the first appellate authority dismissed the appeal filed by the applicant. Aggrieved thereby, a second appeal was preferred before the tribunal and the tribunal upon the materials available on record has recorded a finding that the materials relied upon by the assessing authority for imposition of penalty do suggest that the said unaccounted goods have been transported by the applicant within the State of U.P. and have been sold or delivered to unknown consignee. The tribunal, however, doubted the valuation of the goods as estimated by the assessing authority and thereby granted some reliefs to the assessee by reducing the quantum of penalty from Rs. 3,18,440/- to Rs. 1,59,220/-, while dismissing the appeal.

According to the learned Counsel for the applicant, penalty has been imposed for alleged violation of Section 28-A of the Act. He submits that the provision of Section 15-A(1)(o) of the Act, comes into play only where any goods are seized and only when there is material available to indicate the intention of the dealer to evade tax. Therefore, according to him two things are relevant to be present that is some goods must be seized and the goods must be imported in violation of 28-A of the Act with the intention to evade assessment or payment of tax. But he submits in the present case there is no seizure of goods and there is no material to establish the intention to evade tax. According to him, this is further proved by the fact that till date no assessment has been made for the alleged evaded tax. Learned Counsel for the applicant has further urged that by mere discrepancy in the bilty number, it was not justified for the revenue authority to conclude evasion of tax by the dealer.

Shri B.K. Pandey, learned standing counsel on the other hand, has drawn my attention to the order of penalty and the finding recorded therein which is as follows:

On 24.11.1998, a survey was conducted at the godown of the applicant at Lahartara in Varanasi. On a table of one Yadav who was the employee of the transporter-applicant, two challan Nos. 78 and 79 were kept along with 56 token slips, and on two separate sheets a list of the aforesaid token slips have been mentioned which according to the report was used as bilty. On these documents the Truck No. WB 03A/4751 was written and the date of preparation of the documents is written as 20.11.1998. The starting point of the goods has been indicated as Calcutta and final destination has been written as Varanasi. It has also been mentioned that the transporter Shri S.R. Barnwal or his employee, Yadav refused to make any statement regarding these documents, therefore, on prima-facie presumption, the said documents were seized as a proof of evasion of tax. The report also mentions that further enquiry disclosed that the aforesaid Vehicle No. WB 03A/4751 in the same morning of 24.11.1998 had crossed the Naubatpur check post and from the records of the check post it was found that the some taxable goods have been transported covered by six bilties and some non-taxable goods i.e. cloth, as declared by the applicant, were brought-in covered by two separate bilties. It is also reported that the goods mentioned in the 56 token slips were not declared at the check post. It has further been noted that the bilties against which non-taxable goods (cloth) was transported were builty Nos. 330231 and 330237, wherein 9 and 11 packets of cloths weighing 1350 Kg and 1650 Kg respectively were declared.

According to the order of penalty such declaration of weight was for the purpose of covering up for the weight of the undeclared taxable goods as mentioned in the 56 token slips, and in fact, undeclared taxable goods have been imported against the documents, namely builties Nos. 330231 and 330237, meant for non-taxable goods. The order further suggests that after further investigation into the matter it came to light that on the challan No. 222299 of the transporter submitted at the check post in respect of some other transaction and on the 9 token slips, as confirmed by hand writing expert was found to be of the same person. It was also been found that the aforesaid non taxable goods i.e. cloth, allegedly imported against bilties Nos. 330231 and 330237 stated to have been delivered to a consignee in Varanasi and also in Jaunpur was also fake. Therefore, it was held that this was a conclusive evidence that undisclosed taxable goods have been brought within the State of U.P. in the truck of the transporter No. WB 03A/4751 on 24.11.1998, against the papers in respect of non-taxable goods and have been sold within the State and the goods having not been declared in the books of account, nor being found is in itself a clinching proof that there was intention for evasion of tax.

Learned standing counsel has submitted that even if the transporter is not taken to be a dealer for the purpose of violation of Section 28-A of the Act, the proceeding of imposition of penalty u/s 15-A (1)(o) of the U.P. Trade Tax Act will be justified as sub section (6) of Section 28-A as well as clause (o) of sub section (1) of Section 15, envisage action inter-alia, not only against the dealer or a person making the import, but also against the person who abates in the import or transport of any goods in contraventions of the provisions of Section 28-A of the Act.

There appears to be some substance in the arguments raised by the learned standing counsel, the first appellate court as well as the tribunal have dealt with the finding in quite detail and in view of the facts indicated in the order passed u/s 15-A(1)(o) of the U.P. Trade Tax Act and the findings as recorded and assessed by the tribunal, it does appear that the goods have been transported within the State of U.P. without proper documentation and it is also established that the goods have been brought in the manner as they have been for the sole purpose for the evasion assessment or payment of tax.

Upon the facts and circumstances of the case, no interference is called for in the order of the tribunal and the tribunal was perfectly justified in modifying the order of penalty imposed u/s 15-A(1)(o) of the Act.

The present revision lacks merit and is accordingly dismissed.