Khurana Enterprises vs Commissioner of Commercial Tax

Surya Prakash Kesarwani, J.—Heard Sri N.C. Gupta, learned counsel for the applicant and Sri B.K. Pandey, learned standing counsel for the respondent. This revision has been filed against the order dated July 7, 2014 passed by the Member, Commercial Tax Tribunal, Kanpur Bench-I, Kanpur in Appeal No. 322 of 2014-15 arising from the proceedings under section 48(7) of the U.P. Value Added Tax Act, 2008 (hereinafter referred to as "the Act").

Briefly stated the facts of the present case are that truck No. HR-55-B-0749 was intercepted on June 10, 2014 by the Assistant Commissioner, Commercial Tax (Mobile Squad) Unit, Kannauj. It was found that the truck was carrying 600 bags of PVC dana showing in transit declaration form transportation from Delhi to Patna (Bihar). On verification it was found that neither the alleged consignee is a registered dealer nor the Suvidha number shown by the applicant has been generated by the said dealer.

As per departmental website between June 5, 2014 to June 9, 2014, the applicant had used ten transit declaration form showing sale of PVC dana to alleged purchaser of Bihar for Rs. 1,26,48,000 and out of this seven TDF were used showing sale of Rs. 85,58,000 to the consignee in question, i.e., M/s. Durga Trading. Despite being asked the applicant did not furnish his ID proof. On these facts and also for detail reasons recorded by the assessing authority, the goods in question were seized and cash security of Rs. 6,00,000 was demanded for release of the goods vide seizure order No. 451 dated June 18, 2014. The application under the proviso to section 48(7) filed by the applicant before the Joint Commissioner (SIB), Commercial Tax, Etawah Zone, Etawah, was rejected by the Joint Commissioner vide order dated June 24, 2014. Against this order the applicant filed Appeal No. 322/2014 for the year 2014 before the Member, Commercial Tax, Tribunal, Kanpur Bench-I, Kanpur, which was dismissed by the impugned order dated July 7, 2014.

Aggrieved with this order, the applicant has filed the present revision questioning the correctness of seizure of the goods in question and demand of security for release of the goods.

Sri N.C. Gupta submits that the applicant is a genuine dealer and the goods in question were being transported from Delhi to Patna, i.e., from outside the State to outside the State of U.P. covered by genuine documents and a valid transit declaration form. Therefore, the seizure of the goods in question was void ab initio and in breach of the provisions of section 50 of the U.P. Value Added Tax Act, 2008 (hereinafter referred to as "the Act").

Sri B.K. Pandey submits that in view of the detail facts noted in the seizure order, the order passed under the proviso to section 48(7) of the Act, and the impugned order of the Tribunal, it is clear that the authority has lawfully demanded security of 40 per cent of the estimated value of the goods for release. The impugned order of the Tribunal does not suffer from any error of law or fact. The applicant has not only failed to establish the transaction to be genuine and covered by proper and valid documents but also filed a false affidavit before this court. He, therefore, submits that this revision deserves to be dismissed.

I have carefully considered the submissions of the learned counsel for the parties.

Before I proceed to discuss merits of the case, it appears appropriate to mention some of the orders passed by this court on different dates.

On July 18, 2014, this court directed that an affidavit of purchasing dealer be filed disclosing all relevant details and information to demonstrate that the goods were purchased by him and were being transported to his destination place at Sasaram (Bihar).

On July 28, 2014, an affidavit of one Sri Sanjeev Mehta son of Shiv Kumar Mehta, resident of 16/3, Near Bus Stand, Sasaram (Bihar) dated July 26, 2014 was filed as proprietor of consignee M/s. Durga Trading. In paragraph 3 of this affidavit it is stated that the order for 600 bags of PVC Dana was given to the applicant, after an application was given to the Commercial Tax Department, Sasaram, for adding "PVC dana" in the certificate of registration.

On the request of the learned standing counsel, the matter was adjourned for August 1, 2014 to enable the respondents to file reply.

On August 11, 2014, on the request of the learned counsel for the applicant, the matter was adjourned for August 13, 2014. On August 13, 2014, the matter was again adjourned on the request of the learned counsel for the applicant for filing rejoinder affidavit to the counter-affidavit filed on August 11, 2014. On the next date fixed, i.e., August 21, 2014, this court passed the following order:

"(1) Heard Sri N.C. Gupta, learned counsel for the applicant and Sri B.K. Pandey, learned standing counsel for the respondent.

(2) Today the applicant has filed an affidavit sworn on August 18, 2014. In paragraph No. 3 of the affidavit, it is stated that for the first time the applicant received order for supply of 600 bags to M/s. Durga Trading, Kochas, Sasaram, Rohtas, Bihar and received Rs. 1,00,000 as advance.

(3) In the order dated June 24, 2014 passed by the Joint Commissioner (SIB), Commercial Tax, Etawah Zone, Etawah, it is recorded that as per departmental website, between June 5, 2014 to June 9, 2014, PVC dana of Rs. 1,26,48,000 is shown to have been sent to two purchasers of Bihar to under ten transit declaration forms, out of which goods of value of Rs. 85,58,000 through seven IDF within three days is shown to have been sent to the alleged purchaser, M/s. Durga Trading. Under the circumstances, the petitioner was asked to produce the particular of payment and Suvidha number, etc., but the applicant stated that he has nothing to say on this issue and he can neither give details of payment nor Suvidha number. These facts have also been noted by the Tribunal in the impugned order dated July 7, 2014.

(4) As per counter-affidavit, dated August 11, 2014 of Sri Ved Prakash Shukla, Assistant Commissioner, Commercial Tax, Mobile Squad, Unit-I, Kannauj, an enquiry was made in which the name of the proprietor of the alleged purchasing dealer, M/s. Durga Trading was found to be one Sri Ravindra Nath Pathak as per certificate forwarded by the Deputy Commissioner, Commercial Tax, Sasaram, Bihar and not Sri Sanjeev Mehta whose affidavit dated July 26, 2014 as proprietor of M/s. Durga Trading has been filed in this revision. Apart from this, the enquiry also revealed that no application for amendment by the alleged purchasing dealer was given for adding PVC dana in his registration certificate as per records of the Deputy Commissioner, Commercial Tax, Sasaram, Bihar.

(5) The applicant has taken u-turn and now has stated in paragraph No. 7 of the affidavit filed today that the purchasing dealer has not filed correct affidavit. In paragraph No. 10 it is stated that if any mistake on the part of the deponent has been made then, he apologizes for the same and the goods may be permitted to be taken back to Delhi.

(6) The affidavits filed on behalf of applicant and the facts recorded in the order of the Joint Commissioner as well as the Tribunal indicates willful and deliberate suppression of facts by the applicant and his involvement in evasion of tax.

(7) Let a fresh affidavit be filed by the applicant disclosing true and correct facts including the description of payment allegedly received from the purchasing dealer and the details of 10 TDF which have been used by him between June 5, 2014 to June 9, 2014 for PVC dana worth of Rs. 1,26,48,000. Copies of all the relevant records shall also be filed along with the affidavit. Learned standing counsel shall also produce the original records of the case of the seizing authority and the Joint Commissioner, on the next date fixed.

(8) Put up on August 26, 2014."

On August 26, 2014 on the request of the learned counsel for the applicant, the case was adjourned for August 28, 2014.

This court has noted in detail the willful and deliberate suppression of facts by the applicant and his prima-facie involvement in evasion of tax. Even despite time granted, the applicant did not comply with the order of this court dated August 21, 2014. Even, he has not filed affidavit disclosing certain details and facts, as was directed by this court in paragraph 7 of the order dated August 21, 2014. Pursuant to the order dated August 21, 2014, the learned standing counsel has produced the original record of the case. The original record has also been shown to the learned counsel for the applicant. In the said record information of ten TDF in two pages down loaded from departmental website is available. These two pages are singed by the officers also. Perusal of it shows that ten transit declaration forms for PVC dana were downloaded by the applicant within a short span of four or five days. This paper contains complete details, namely, truck number name of selling dealer and value of goods, etc. This document is undisputed and has not even been denied by the applicant despite the direction given to him vide para 7 of the order dated August 21, 2014. The stand taken by the applicant in the affidavit dated August 18, 2014, that for the first time the goods in question were being sent by the applicant to M/s. Durga Trading, Sasaram (Bihar) and only a sum of Rs. 1 lac as advance was received proves to be incorrect in view of the information available on the official website of the Department which has not been even denied despite order dated. August 21, 2014.

All the authorities including the Tribunal have recorded a finding that the goods in question was brought to evade payment of tax. I find that prima-facie, the facts and circumstances of the case and evidences available on record shows that under the cover of TDF attempt to evade payment of commercial tax was made showing dispatches to a non-existing/non-bona fide dealer of Bihar with the help of manipulated paper and false declaration.

In view of these facts and circumstances, I do not find any infirmity in the impugned order of the Tribunal. No question of law arises from the order of the Tribunal. The revision is wholly misconceived and, therefore, deserves to be dismissed. In the result, the revision fails and is hereby dismissed with costs of Rs. 25,000. Competent authority shall pass penalty order in accordance with law without being influenced by any of the observation made in this judgment.