The Commissioner, Commercial Tax vs S/S Shree Azad Transport Co. Pvt. Ltd.

Ashwani Kumar Mishra, J.—The State as well as the assessee, both, are before this Court in their respective revisions, against an order passed by the Commercial Tax Tribunal dated 10.2.2017, passed in Appeal No.6 of 2017, whereby the assessee''s appeal has been allowed in part, and a direction has been issued to deposit 10% of the value of seized goods as estimated by Mobile Squad, either in cash or bank guarantee, for releasing the goods. A further direction has been issued by the Tribunal that as and when evidence is adduced before the authorities to the effect that goods have actually crossed the State, the bank guarantee or the cash, as the case may be, shall be returned.

Facts giving rise to filing of these revisions are that the assessee herein is a registered transporter, who is operating from Delhi-U.P. Border at Chikambarpur in Ghaziabad. Certain grocery items are stated to have been received by the transporter from the consignor located in Delhi for being sent to the consignee located in the State of Bihar. The goods were loaded in U.P., and were being transported to Patna. The transport vehicle was intercepted by the Mobile Squad, and documents produced were inspected. It was found that Transit Declaration Form (TDF) was available with transport vehicle, and according to the Tribunal, the vehicle was en-route as per details given in the TDF. It is further admitted that the time within which transport vehicle had to exit U.P. had not expired. However, a show cause notice was issued by the authority concerned, doubting the contention of the transporter that goods were being transported from Delhi. According to the department, such goods were being sent from within the State itself. 27GR/invoices produced were examined by the authorities. It was found that 26 out of these 27GR/invoices mentioned Tin numbers, which were found to be non-existent. The authorities, therefore, were of a prima facie opinion that in fact the consignor and consignee were all fictitious persons, and goods were being transported from Ghaziabad in the State of U.P., with the object of evading payment of tax. The show cause notice has been replied by the assessee contending that the details of consignor and consignee, as have been provided to the transporter, have been furnished, and the transporter has no means to verify their genuineness, nor is it warranted in law. The assessing authority, in such circumstances, has allowed release of goods, which is in the nature of grocery items, including dry fruits etc., upon furnishing of cash or bank guarantee to the extent of 40% of the value of goods. An appeal preferred against it was rejected. In second appeal, the Tribunal has modified the order, and a direction has been issued to release the goods upon deposit of 10% amount viz-a-viz estimated value of the goods. It is this order, which is the bone of contention between the parties.

Sri B.P. Pandey, learned Standing Counsel appearing for the State, contends that materials existed on record to doubt genuineness, inasmuch as all supporting documents were prima facie found to be forged, and in such circumstances, the authorities were justified in insisting upon deposit of 40% amount, which is the amount that could be levied as penalty upon the assessee. It is also contended that dealer has not come forward, and it is the transporter, who is throughout contesting the matter. It is stated that this itself supports their apprehension that there is no consingor and consignee, and it is the transporter, who is carrying the goods with an intent to evade payment of tax. Learned Standing Counsel has placed reliance upon the order passed by this Court in Sales/Trade Tax Revision No.456 of 2016 (The Commissioner, Commercial Tax, U.P. Lucknow v. S/S. Bihar Carrying Corporation, as well as another judgment of this Court in Sales/Trade Tax Revision No.460 of 2016 (The Commissioner, Commercial Tax, U.P. Lucknow v. S/S Jai Mata Di Cargo Services Pvt. Ltd.), wherein this Court in similar circumstances interfered with the order of Tribunal, and directed deposit of cash/bank guarantee to the extent of 40% of estimated value.

Learned counsel for the assessee, on the other hand, submits that judgment, relied upon, essentially follows a Division Bench judgment of the Rajasthan High Court in Gill Sandhu Haryana Transport Co. v. State of Rajasthan, (1991) 10 RT JS 335, which arose out of proceedings initiated under the Rajasthan Value Added Tax Act, 2003. Learned counsel with reference to Section 76(2)(d) and Explanation 12 submits that under the relevant enactment, there existed requirement of providing details of consignor and consignee by the transporter, and if it fails to provide such details, it would be presumed that goods have been sold in the State of Rajasthan itself. Learned counsel submits that there exists no pari materia provision in U.P. Value Added Tax Act, and therefore, the judgment is distinguishable. Learned counsel has further placed reliance upon decisions of this Court, particularly in Madhya Bharat Transport Carrier, Gwalior v. Commissioner of Trade Tax, 2003 UPTC 1218, and in S/S Ranchi Carrying Corporation, Ranchi v. The Commissioner, Commercial Tax, U.P. Lucknow, passed in Revision No.59 of 2017, on 15.2.2017, in order to contend that the requirement to deposit amount or furnishing of bank guarantee is wholly unwarranted, in the facts and circumstances of the present case.

I have heard learned counsel for the parties, and have perused the materials brought on record.

From the materials placed, this Court finds that there is a serious issue on facts as to whether the goods have been loaded from within the State of U.P. or were loaded pursuant to its receiving by the transporter from across the State. This would be a matter to be determined only after evidence is led by the parties in that regard. Such an enquiry would have relevance, in case the State decides to initiate penalty proceedings against the assessee. Any observation by this Court, which may adversely effect proceedings to be drawn in future, is liable to be avoided. This is particularly so, as parties would have opportunity to adduce evidence in that regard. However, fact remains that goods were being transported with a valid TDF, and at the time when goods were seized, it was en-route, as disclosed in TDF, and period for the vehicle to exit had not expired.

So far as requirement on part of transporter to possess details of consignor or consignee is concerned, no specific provision akin to the provisions existing in Rajasthan is shown to the court. However, this alone would not be determinative of the cause, inasmuch as where question arises as to whether the goods are being transported from one State to another through U.P., the authorities may be entitled to examine the claim of assessee with regard to genuineness of its plea in that regard. For the purposes of ascertaining as to whether goods have been sent from beyond the State of U.P., the only materials, which would be available with the authorities would be the documents provided by assessee. As is the case herein, 26 out of these 27GR/invoices mentioned tin numbers, which were found to be forged. This would be a relevant circumstance for the purposes of ascertaining as to whether goods in fact had been sent from any place beyond the State of U.P. or not? In such circumstances, the interest of the parties would have to be protected, particularly as proceedings under Section 48 are likely to be initiated in the matter. It is found that goods were being transported pursuant to a TDF, and at the time when goods were seized, they were found to be en-route disclosed in the TDF, and time to exit State had not expired. In such circumstances, the direction issued by the Tribunal to release the goods upon deposit of 10% amount of the estimated value in cash or bank guarantee cannot be said to be bad in law. The question of law is answered, accordingly, in Revision No.75 of 2017.

Law permits levy of penalty to the extent of 40% of the estimated value, if penalty proceedings are drawn, as such, for the remaining 30% amount, the assessee may be required to furnish its indemnity bond, upon which the goods may be released. Such deposit of amount and release of goods shall, however, be subject to appropriate proceedings, which may be drawn, in accordance with law. It is further clarified that this Court has not adjudicated the case of parties, on merits, and therefore, any observation made in this order would not be construed as an expression of opinion on the respective case of the parties, on merits. Since the matter is being disposed of, at this stage itself, the submissions raised with reference to the judgments relied upon are not being dealt with, and is left open to be examined in an appropriate matter.

The Revision No.72 of 2017, accordingly, stands disposed of.