Commissioner of Commercial Tax vs Gautam Pandey

Pankaj Mithal, J.—Heard Sri B. K. Pandey, learned standing counsel for the revisionist and Sri Aloke Kumar, learned counsel who has put in appearance on behalf of opposite party. The revision has been preferred by the Revenue against the order of the Commercial Tax Tribunal dated April 7, 2011 directing for release, of seized goods without any security.

The only question raised and argued in this revision is whether the Tribunal was legally justified in directing for release of the goods without any security.

The goods in the nature of TMT bars weighing 40 tons was detained on March 2, 2011 while in transit from Durgapur in West Bengal to Betul in Madhya Pradesh. After service of show-cause notice upon the dealer (vehicle owner/driver) the seizure order was passed on March 18, 2011 on the grounds that the existence of buyer and seller are doubtful; the buying dealer is not registered; TIN of the buying dealer mentioned in the invoice is not correct; and there is possibility of the goods being sold in U.P.

The representation of the petitioner u/s 48(7) of the U.P. Value Added Tax Act, 2008 was rejected on April 4, 2011 whereupon an appeal was preferred before the Tribunal.

Sri B. K. Pandey, learned counsel for the revisionist, has argued that the TIN mentioned on the invoice is of a dealer of Ghaziabad and not of the buying dealer of Madhya Pradesh which gave rise to a legitimate presumption that the goods were not on transit through the State of U.P. but were being imported for sale in the State of U.P. The cancellation of the registration of the buying dealer of Madhya Pradesh and the non-existence of the selling dealer of West Bengal supports the presumption drawn by the Department in passing the seizure order.

It may be important to note that the goods at the time of seizure were duly accompanied by the necessary documents including the transit declaration form and no discrepancy whatsoever was found in the said form. It may be noted that the format of the transit declaration form contains no column which may require disclosure of TIN of the buying dealer.

The goods on transit through the State of U.P. are liable to be seized u/s 52 of the U.P. Value Added Tax Act, 2008, if the driver or the person in charge of the vehicle/goods is not carrying documents as may be prescribed as in such a situation the presumption is that the goods are meant for sale within the State of U.P. Thus, if the goods are accompanied by the documents prescribed, no presumption as envisaged under the above provision can be drawn.

Rule 55 of the Rules framed under the aforesaid Act authorises for inspection of the goods in transit and all documents and records relating to such goods and, if the officer making the inspection finds or has reason to believe that the goods are not covered by the documents or the documents are false, bogus, incomplete or invalid, issue notice calling upon the driver/person in charge of the vehicle to show cause why the goods may not be seized.

The Commissioner, Commercial Tax, U.P., in accordance with the provisions of section 52 read with rule 55(5) of the Rules is said to have issued a circular dated July 30, 2009 prescribing for the downloading of a transit declaration form from the website of the Commercial Tax Department of the U.P. for the purpose of carrying goods through the State of U.P. It provides that at time of entry of the goods in the State a declaration form is to be downloaded and duly filled up, inter alia, giving the route through which the goods are to be carried mentioning the entry and exit points with two important points through which goods would pass. This is in addition to the documents such as bill/builty in connection with the said goods.

The Tribunal in the impugned order has recorded a clear finding that the buying dealer of Madhya Pradesh is a bona fide dealer and it cannot be said that he is not traceable. In fact, he is a registered dealer whose registration was cancelled on March 3, 2011, i.e., on the next date on which the goods were seized. The dealer has applied for restoration of its registration on the very next date. Thus, the very fact that the dealer was registered and its registration was cancelled which is pending restoration indicates that the buying dealer is genuine and bona fide.

As regards the TIN appearing on the invoice is concerned, the Tribunal has accepted the version of the driver/vehicle owner that by mistake the TIN of another dealer of Ghaziabad was entered in the invoice in place of TIN of the Madhya Pradesh dealer. The aforesaid mistake has occurred on account of the fact that the selling dealer was having orders of various firms including that of Ghaziabad dealer and while entering TIN of the Madhya Pradesh dealer by mistake the TIN of the Ghaziabad dealer was mentioned.

The aforesaid finding is a pure finding of fact. I do not find any illegality in recording of the said finding as in normal trading such kind of errors may be common and it cannot be attributed to be with the object of defrauding the Revenue. Simply wrong mention of the TIN on invoice would not give rise to any presumption that the goods were being imported for sale inside the State of U.P. when otherwise the genuineness of the invoice is not in doubt.

The stage of inquiry or any investigation as to whether the goods have been imported in U.P. or are on transit only had not arrived as the detention was made prior to the time stipulated for the exit of goods mentioned in the transit declaration form.

In the case of New Mahavir Transport Company of Bharat v. Commissioner, Commercial Tax, U.P., Lucknow [2010] 30 VST 548 (All); [2009] Tax Law Diary 338 which was also a case of seizure of goods u/s 52 of the U.P. Value Added Tax Act, this court held that the goods cannot be seized on minor technical defects and, as such, directed the goods to be released without security.

In view of aforesaid facts and circumstances and the legal position, I am of the opinion that no question of law arises in the present revision. There is no illegality or jurisdiction error on the part of the Tribunal in passing the order impugned for release of goods without security. The revision lacks merit and is dismissed.