Commissioner, Commercial Tax vs S/S Irfan Ali

Ashwani Kumar Mishra, J.—Despite service of notice upon the assessee, none has appeared. These three revisions have been taken up for hearing, and are being disposed of after hearing the learned Standing Counsel, and upon perusal of the materials brought on record.

The assessee herein is a Railway Container Contractor, who has been found to have not maintained adequate records, which may depict as to for whom the goods itself had been brought in State of Uttar Pradesh. The Assessing Authority, in such circumstances, has proceeded to treat the assessee as dealer, by virtue of Section 2(h)(ix) of the U.P. Value Added Tax Act, 2008. An appeal preferred by the assessee was rejected. However, the second appeal filed before the tribunal by the assessee has been allowed, primarily on the ground that there is no specific provision in the U.P. VAT Act or the Rules, containing any specific provision, which obligates the Contractor to maintain record in a particular manner, regarding the identity of consigner and consignee, and to submit such records before the authority. The tribunal has also placed reliance upon the judgment of the Apex Court in State of Haryana v. Sant Lal, reported in 1993 (91) STC 321. The tribunal has taken the view that the assessee being a Railway Contractor, its job was confined only to transport the goods from the railway station of origin to the destination station, and they could not have been held to be dealer. The revenue is aggrieved by such determination of the tribunal and has preferred the instant revision under Section 58 of the Act.

Sri B.K. Pandey, learned Standing Counsel has invited attention of the Court to Section 2(h)(ix) of the U.P. VAT Act, which reads as under:-

"2.(h) "dealer" means any person who carries on in Uttar Pradesh (whether regularly or otherwise) the business of buying, selling, supplying or distributing goods directly or indirectly, for cash or deferred payment or for commission, remuneration or other valuable consideration and includes,-

(i) �

(ii) �

(ix) a railway container contractor, an air cargo operator, a courier service provider, who fails to disclose the name and complete address of consigner or consignee or if discloses such name or address of consigner or consignee is found bogus, forged or not verifiable, or the owner or person in-charge of a vehicle who obtained authorization for transit of goods from the officer in-charge of entry check post but failed to deliver the same to the officer in-charge of the exit check post;"

Reliance has also been placed upon Rule 38(7) of the Rules framed under the Act, which deals with registration of Railway Container Contractor. Clause 7 of Rule 38 reads as under:-

"Rule 38. Registration of railway container contractor, an air cargo operator, a courier service operator, owner or person in-charge of godown or cold storage or warehouse other than transporter-

(1) .........

(2) .........

(7) Every person under this Rule shall maintain following records:-

(a) A register in respect of all consignments of goods received by him for transportation or storage;

(b) Office copy of goods receipt or consignment note issued in respect of goods received by him for transportation or storage;

(c) Office copy of goods challan prepared by him for delivery to the person in charge of the vehicle or driver of the vehicle;

(d) a goods receipt and delivery register in respect of all consignments of goods received and delivered by him;"

From the aforesaid provisions, it is clear that every Railway Container Contractor is required to obtain registration and must maintain records in respect of consignments of goods received by him for transportation or storage. Sub-rule 7 of Rule 38 is categorical, inasmuch as the nature of information required to be possessed by the Railway Container Contractor has all been specified in the rule itself. The tribunal in its order has not properly dealt with Rule 38 (7) of the Rules. The tribunal, on the other hand, has referred to the provisions of Sections 17 and 21 of the Act, in order to contend that there is no requirement in law viz-a-viz a dealer, who is working as Railway Container Contractor to maintain records in a specified manner. This view of the tribunal is apparently misconceived. Section 2(h) of the Act deals with a specific exigency, inasmuch as a Railway Container Contractor in law would acquire the status of a dealer, only if it fails to furnish details with regard to movement of consignment and disclose the identity of the consigner and the consignee. In case, such records are maintained, the Railway Container Contractor is not to be treated as a dealer. Rule 38 is a specific provision dealing with a Railway Container Contractor, and requires such contractor to be compulsorily registered. A positive obligation is then imposed by virtue of Sub-rule 7 for the Railway Container Contractor to maintain records as is specified therein. Any failure on part of contractor to furnish details, which it is required in law to maintain, would enable the revenue to treat such contractor as a dealer, and thereby impose obligation of payment of tax upon it. The tribunal in its order has completely failed to notice the statutory scheme itself, and specific requirement of rule has been given a go-by, which renders the view of tribunal unsustainable in law. Further observation by the tribunal that the Railway Container Contractor was actually not found in possession of the goods, is again misconceived. The transportation of goods by the Contractor is not in issue. Once that be so, it is not necessary that only when the contractor is found in possession of goods that he can be proceeded with and not otherwise. Once the movement of consignment through the Railway Container Contractor is not disputed and is established, the obligation in law was upon the contractor, to furnish details of the consigner and consignee, so that the interest of revenue could be safeguarded, is clearly imposed. The failure on part of contractor to maintain the records, therefore, would entitle the revenue to proceed as per law.

Before parting, it would also be appropriate to observe that decision of the Apex Court in State of Haryana (supra) apparently has no applicability, in the facts and circumstances of the present case, inasmuch as the Hon''ble Supreme Court in such matter was dealing with the statutory scheme, existing in the State of Haryana, and it has not been shown that any provision of the like nature, as it exists in Rule 38, existed therein also. The observations, therefore, made by the Hon''ble Supreme Court in such matter were not available for being relied upon by the tribunal to grant relief.

The questions of law formulated in the revision, thus, is answered by holding that the Railway Container Contractor is required in law to get itself registered and maintain records, as is clearly specified under Rule 38 (7) of the Rules, and in case such records are not made available under the statutory scheme, the contractor acquires status of a dealer, so as to attract relevant provisions of the U.P. Value Added Tax Act, 2008, for the purposes of levying tax.

These revisions are, accordingly, disposed of.