M/S Laxmi Rice Mill, Gorakhpur vs The Commissioner of Commercial Tax

Ashwani Kumar Mishra, J.—This revision challenges an order passed by the authorities under the Act imposing penalty upon the revisionist under Section 48(5) of the Act. The order records that by two separate trucks, goods were being transported, and were intercepted by the officer of the department. In respect of year 2013-14, 335 bags of wheat were transported in a vehicle bearing registration No. UP 53T 5680, and upon asking of the Assistant Commissioner, Mobile Squad, none of the documents such as Challan, Bills, Sale invoice etc., were produced. Treating it to be a case of evasion of tax, proceedings were initiated and notice was issued. In response to such notice, the assessee submitted its reply after about four days, stating that goods were being validly sent to one M/s Goel Edible Ltd., Industrial area, and that there was no intention to evade tax. The authorities have considered the explanation and defence of assessee has been discarded after returning a finding that the books of account had not been maintained properly, and that it contains over righting and cutting. A further finding has been returned that transport vehicle was intercepted at the place which did not fall enroute the disclosed purchaser, and as such it is claimed that defence itself was not bona fide and an afterthought.

Learned counsel for the revisionist has relied upon a decision of this Court in Priyanka Alloy Steel and Coal Co. v. C.C.T, 2016 NTN (62) 317, in order to contend that an order under Section 48 (5) of the Act can be passed only if following twin conditions are satisfied:

(a) The authorities are satisfied that goods were omitted from being shown in the accounts, registers and other documents referred to in sub-Section (1) or not traced to any bona fide dealer or not properly counted for by any dealer or that the goods contained wrong particulars or are undervalued to the extent of more than 50% of the value of goods in the local market where the said transaction had taken place.

(b) The authorities are further of the opinion that there was an intention to evade payment of tax.

Learned counsel submits that in the factual scenario of the present case, these twin conditions are not met, inasmuch as proper account had been produced which included the gate pass of mandi Samiti, tax invoices, as well as the stock register etc. Submission is that the order of the authorities, in the facts of the present case, cannot be sustained.

Learned Standing Counsel, on the other hand supports the order with reference to finding returned in the order. It is contended that neither proper books of accounts had been maintained, and even the record which had been produced clearly contains interpolation. It is also stated that the case of assessee has rightly been disbelieved, inasmuch as goods were intercepted at a place at Kushinagar, which does not fall in the way, if the goods were being transported to the alleged purchaser. Reliance has also placed on the statement of the driver that he was not given any documents, and that rice was actually been exported to Bihar.

I have heard Sri Gaurav Mahajan, learned counsel for the revisionist and learned Standing Counsel for the State and have perused the materials brought on record.

Section 48(5) of the U.P. Value Added Tax Act, 2008, which is relevant for the purpose, reads as under:-

"If such authority, after taking into consideration the explanation, if any, of the dealer or, as the case may be, the person in charge and after giving him an opportunity of being heard, is satisfied that the said goods were omitted from being shown in the accounts, registers and other documents referred to in subsection (1) or not traced to any bona fide dealer or not properly accounted for by any dealer or documents issued by a bona fide dealer with respect to the accompanying goods contained wrong particulars or the goods are undervalued to the extent of more than fifty percent of the value of goods prevalent at the relevant time in the local market area where the said transaction had taken place, with intention to evade payment of tax, it shall pass an order imposing a penalty not exceeding forty percent of the value of such goods, as he deems fit. "

Learned counsel for the revisionist is correct in contending that the sub-Section 5 can be invoked only if the authorities are satisfied that the goods in question were omitted from being shown in the accounts register, and other documents referred to in sub Section (1) are not traced to any bona fide dealer or not properly accounted for by any dealer, or documents issued by a bona fide dealer with respect to the accompanying goods contained wrong particulars or the goods are undervalued to the extent of more than fifty percent of the value of goods prevalent at the relevant time in the local market area where the said transaction had taken place, and together with it, there is a further satisfaction of intention to evade payment of tax on part of the dealer before the provision could be attracted.

In the facts of the present case, the authorities have submitted that at that time of seizure of the vehicle, none of the relevant documents were available in the vehicle. It has further been noticed that seizure had taken place at Kushinagar, which does not fall in the way, if the goods were been sent to M/s Goel Edible Ltd, Industrial area at Sant Kabir Nagar. Statements of the driver has also been relied upon, according to which the wheat was being taken to Bihar. The authorities have further found that there was an interpolation in the stock register, and over writing clearly suggest that the assessee subsequently, was trying to alter the records so as to explain the transaction in its own account.

It has further been observed that in the account books, the goods have not been correctly mentioned viz-a-viz the stock register. It is with such findings that the authorities have found that neither the accounts have been properly maintained, and that the transaction itself as is being sought to be made out, was not a bona fide transaction but was merely an attempt to justify an Act undertaken with the intend of evading payment of tax. The twin conditions contemplated in order to attract sub Section 5 have been specifically dealt with, and findings on both the accounts have been returned.

Learned counsel for the revisionist, although has attempted to challenge such findings but the recital of facts mentioned therein, leave no room of doubt for this Court to question such factional issues in this revision. The fact that the goods were seized at a place which does not situate upon the route on which such goods were being transported; the interpolation in the records in the stock register etc. are relevant facts, and opinion based thereupon to hold that the accounts have not been properly maintained, and that there was an intention to evade payment of tax, cannot be said to be erroneous or perverse so as to warrant any interference in exercise of revisional jurisdiction.

Revision accordingly fails, and is consigned to records.