Nimco Traders vs The Commissioner of Taxes, Govt. of Tripura and Others

Deepak Gupta, C.J.

By means of this petition, the petitioner has challenged the order dated 27.12.2013 passed in Revision Case No. 46 of 2013 and also the seizure order dated 09.07.2013 and has further prayed that the respondents be directed to refund the tax and penalty deposited by the petitioner pursuant to the order of the revisional officer.

The undisputed facts of the case are that the Deputy Inspector General of Police, Group Centre, CRPF, Guwahati issued a notice inviting tenders for supply of various materials including plain knitted round neck short sleeves cotton vests. It appears that the petitioner submitted its tender and thereafter a supply order was placed on the petitioner on 29th January, 2013 for supply of 1,18,187 Nos. cotton vests @ Rs. 68/- per cotton vest and the total amount was Rs. 80,36,716.00, VAT payable as per the Assam VAT Act was 5% and the total amount payable was Rs. 84,38,552.00.

It appears that out of these 1,18,187 cotton vests, 12,412 cotton vests were to be supplied in the State of Tripura. Thereafter, the petitioner transported 12,412 cotton vests valuing Rs. 8,44,016.00 with VAT of Rs. 42,200.80 i.e. total amount of Rs. 8,86,217.00 through M/s. Speed Cargo Carriers, a registered transporter in the State of Tripura.

The truck carrying the materials belonging to M/s. Speed Cargo Carriers bearing registration No. AS-01-AC-0911 was detained by the revenue authorities at Churaibari Check Post on 09.07.2013 and 25 cartons of hosiery goods were detained on the ground of non-declaration. In the seizure list itself, it is mentioned that the value of the goods is Rs. 8,44,016.00 which is exactly what is stated in the bill/invoice and the basis of value determination is shown to be according to the prevailing market price. The exact figure of Rs. 8,44,016.00 clearly indicates that the bill/invoice was available with the truck. The other documents which were seized were Form No. XXV, consignor note copy and invoice copy. These are all the documents which are required to be carried in the vehicle. It appears that the Officer-in-Charge of the Check Post was under the impression that since VAT had not been paid and even these goods had not been declared to be payable under the Tripura VAT Act, therefore, there was non-disclosure of material garments.

In Ruchi Soya Industries Ltd. v. State of Tripura and others, , (2015) 1 TLR 482, we have dealt with the provisions of Section 67 of the Act in detail and we held that the power of seizure under sub-section 4 of Section 67 of the Act is available only when the documents are not produced or the documents produced appeared to be false or forged.

In the present case, the supply was being made not to a private party but to the authorities of the CRPF. The supply was being made on the basis of the tender issued by the DIG, CRPF based in Assam and they are purchased the goods in Assam, paid tax thereon in Assam and thereafter the goods was being transported on behalf of the CRPF to its various offices in Tripura. This sale cannot be taxed under the Tripura VAT Act. This is not a sale taking place within the State of Tripura. In fact, as far as the present case is concerned, the sale was complete in the State of Assam itself and no part of the transaction took place in Tripura. Furthermore, the documents as required under law including Form No. XXV was seized. This clearly shows total non-application of mind on behalf of the seizing authority and also on behalf of the Commissioner of Taxes who has just rejected the revision petition on the ground that the goods were not declared. This is totally incorrect. It is not that the goods were not declared but shown to be declared as non-taxable. There is a difference between ''goods not been declared'' and ''goods wrongly been shown as non-taxable''. If goods are shown to be non-taxable and prima facie they are found to be taxable, the authority may have the right to take action in accordance with the decision rendered in Ruchi Soya but in a case like the present one where on the face of it, it is apparent that no part of the sale has taken place within the State of Tripura, it was not proper for the authorities to have seized the goods.

We, therefore, set aside the order of seizure and also the order of the Commissioner of Taxes dated 27.12.2013 passed in Revision Case No. 46 of 2013. During the pendency of the proceedings the petitioner has deposited the amount of tax and penalty assessed. The State is directed to refund this amount along with statutory interest latest by 31st May, 2016 and in case the amount is not paid back to the petitioner latest by 31st May, 2016 then with effect from 1st June, 2016 it shall carry interest @ 12% per annum.

The State shall also bear costs of the petition assessed at Rs. 5000/-.