Commissioner Commercial Taxes vs S. Bikram Singh

1 The respondent stands served with notice issued by this Court. However, he has chosen not to appear.

2 We have heard Mr. D.C.Raina, learned Advocate General at length and have also perused the record.

This Court is considering a reference made under Section 75 (1) of J&K Value Added Tax Act, 2005 (hereinafter‟ the Act').

The facts giving rise to the filing of the present reference are within a narrow compass. It appears that the respondent was a dealer involved in selling of goods including pressure cookers registered under the Act. On 21st March, 2007, the Assessing Authority, Commercial Taxes Check post, Lakhanpur seized the consignment of goods of 48 pressure cookers consigned by M/S Kay Kay Metals, Delhi to the respondent. The goods were being carried in vehicle No. JK02E- 2304. The seizure was effected under Section 67(5) of the Act for the reason that the bill produced in respect of the consignment was reflecting only 36 pressure cookers, whereas the consignment was found to be consisting of actually 48 pressure cookers. After issuance of a notice in the prescribed form, the Assessing Authority imposed the penalty of Rs.3900/- upon the respondent.

5 Aggrieved thereby, the respondent filed the appeal before the Appellate Authority which came to be dismissed on 12th July, 2007. The order of the Appellate Authority was challenged before the State Sales Tax (Appellate) Tribunal Jammu (hereafter „the Tribunal') which, by its order dated 28th September, 2007, accepted the appeal. The Tribunal by its order dated 28th September, 2007 was of the opinion that the respondent was bound to pay penalty on the value of 12 pressure cookers which was not covered under the bill or invoice for which no document was produced.

6 It appears that thereafter an application was made by the Commissioner Commercial Taxes, J&K under Section 75(1) of the Act. Upon hearing this application, the Tribunal by its order dated 9th December, 2007 has referred the following issue to this Court for opinion.

"Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that the penalty can be imposed on the value of 12 pressure cookers being carried without any document and not on the value of total goods being carried."

7 It is urged by Mr. Raina, learned Senior Counsel that the Tribunal has erred in imposing penalty on only 12 pressure cookers for the reason that the penalty in case of a false statement is required to be imposed under Section 67(5)(a) of the Act and that this statutory provision specifically states that the value of the goods under this sub-section shall mean the invoice value or market value whichever is higher. In this background, it is urged that the penalty was leviable on the total value of 48 pressure cookers.

None as appeared to contest this reference.

We have given our deep consideration to the submissions made and have also examined the available record.

We find that ever before the authorities, no dispute has been raised to the factual matrix set out hereinabove.

For expediency, we may extract the provisions of Sections 67(2)(4)(5)(a) of the Act which read thus:

67(2):

Establishment of Check Posts and Inspection of goods in transit.-

(2) No person shall transport within the State across or beyond the notified area any consignment of goods exceeding such quantity or value as may be prescribed, by any vehicle or any other mode of conveyance unless he is in possession of-

(a) either a bill of sale or delivery note or declaration or certificate of ownership containing such particulars as may be prescribed; and

(b) a way bill in such form and containing such particulars as may be prescribed.

67(4):

(a) In any notified area or at any other place, an officer Incharge of the said area or the Commissioner or any other officer, not below the rank of Inspector, duly authorized by the Commissioner, may require-

(i). the driver or any other person in charge of the vehicle or any other conveyance, as the case may be, to stop the vehicle or conveyance, and put it stationary, as long as may be necessary, for the purpose of examining the goods under transport and other contents of the vehicle including records relating to the goods which are in the possession of the driver or such other person; (ii). any person in charge of a godown or any other premises of transport agency, clearing or forwarding agency, other than a rail head or a post office, to produce for inspection transport receipts, account books and other documents concerning the goods carried, transported, loaded, unloaded, consigned or received for transport maintained in the ordinary course of business and in the prescribed manner.

(b) The Commissioner and any other authority or officer referred to in clause (a) of this sub-section shall for the purpose of investigation have powers to -

(i) search the vehicle or conveyance and the driver or other person incharge of the vehicle or conveyance;

(ii) break open any package or packages under transport in a vehicle or found in godown or premises of the transport agency or the clearing or forwarding agency;

(iii) examine on oath the driver or owner of the vehicle or conveyance or the person Incharge of the transport agency or clearing or forwarding agency;

(iv) seize the goods; and

(v) seize the receipts, account books and other documents: Provided that before seizing, the authority/officer shall record the reasons in writing and make an inventory of the goods seized, a copy of which shall be handed over to the driver or owner of the vehicle or the person Incharge of the transport agency or clearing or forwarding agency as the case may be. The seized records shall be impounded, in 62 the prescribed manner and retained so long as their retention may be necessary for the purpose of the Act.

67(5)(a):

The goods, covered by sub-section (2) whether found in vehicle or other conveyance, or go down or any other premises of any transporter, clearing or forwarding agency, or any other place, but which are not supported by the documents specified in said sub-section, or are supported by documents which are fake , false or suspected to be fake or false in respect of the particulars contained therein, shall be seized by the Officer In-charge, Notified Area or any other officer or authority referred to in sub-section(4) after recording reasons in writing and the owner of such goods shall be liable to penalty which shall be equal to double the amount of tax leviable on such goods or twenty five percent of the value of goods whichever is higher. The value of goods under this sub-section shall mean the invoice value or market value whichever is higher:

Provided that the goods liable to seizure and /or seized may, subject to the security furnished in prescribed form for a value equal to the amount of maximum leviable penalty, be released.

(b):

No order of penalty under clause (a) shall be made unless the affected person is given a reasonable opportunity of being heard. The goods for the value equal to the penalty or the security furnished under sub-section (5), as the case may be, shall not be released unless the amount of penalty levied is paid.

(emphasis by us)

The Tribunal has considered at length the meaning which has to be assigned to the expression „fake and false' adverting to the Webster Encyclopedic Unabridged Dictionary, the Concise Oxford Dictionary and the Law of Lexicon, the Encyclopedic law dictionary, 2nd edition and concluded that in case deceptive or fraudulent or concisement of facts declared in the document are untrue, incorrect or a false statement tending to deceive or mislead deceptive statements is made, the same would be covered within the expression „fake and false" as appeared in Section 67(5)(a) of the Act.

Reading of the statutory provisions would show that the legislature has carefully referred to the circumstance of goods covered by sub-section 2 being found in vehicle, but which were not supported by the documents specified in the said sub section or are supported by documents which are fake, false or suspected to be fake or false in respect of the particulars contained therein being mandatorily shall be seized by the Officer being In-charge and the owners of "such goods" shall be liable to pay penalty which stated that it shall be equal to double the amount of tax leviable on "such goods" or twenty five percent of the value of goods whichever is higher.

13 In the present case, there is no dispute at all that a total 48 pressure cookers were being imported, thirty six of which stood declared in the invoice. Therefore, the same would be outside the purview of seizure or penalty as mentioned in Section 65 (5)(a) of the Act. Only twelve pressure cookers were not supported by the documents, which, as such, would be liable for seizure and penalty. The factual narration contained on record would show that the goods were seized on the ground that the bill produced by the driver of the truck was found fake and false. Be that as it may, the Tribunal has concluded that so far as 36 pressure cookers are concerned, the bill was not wrong. It did not contain any incorrect or false statement qua these cookers, whereas twelve pressure cookers were being imported without any document. The Tribunal has correctly observed that the penalty proceedings are penal in nature and being deterrent would be required for the commission of the default. It was twelve pressure cookers which were being imported by the respondent without any bill or invoice.

14 In this background, the penalty was liable to be imposed only on 12 pressure cookers of an amount equal to double the amount of tax leviable or 25 % of the value of the goods which ever is higher.

We are of the opinion that the penalty can be imposed on the value of such goods which were not supported by the documents and not on the entire consignment.

In view thereof, the reference is answered in the above terms. Let the opinion of this Court be forwarded to the Sales Tax (Appellate) Tribunal Jammu.