Pashupati Castings Limited vs Commissioner of Commercial Tax

Arun Tandon, J.—Heard learned counsel for the assessee and learned standing counsel for the Department. Common order passed by the Trade Tax Tribunal dated June 27, 2011 passed in Second Appeal No. 250 of 2011 and Second Appeal No. 251 of 2011 (assessment year 2010-11) has been challenged by means of the present trade tax revisions.

Facts and pleas raised in both the trade tax revisions are identical and therefore, both are being decided by means of this common judgment.

The assessee is a registered dealer.

In the first case, the Assistant Commissioner (In-charge), Trade Tax, Mobile Squad 2nd Unit, Mathura, intercepted vehicle HR026 GA-5107 and HR-38 D-1648 on 22nd April, 2011. It was found that under bilty No. 1361 dated April 21, 2011 and builty No. 1360 dated April 21, 2011, the assessee was transporting 17.61 metric tonnes of iron and steel. The first vehicle had 8.830 metric tonnes of iron and steel covered by tax invoice No. 0225 dated April 21, 2011. The other vehicle had 8.730 metric tonnes of iron and steel covered by tax invoice No. 224 dated April 21, 2011, i.e., the same date. These consignments did not accompany form XXI and on that basis the goods were seized by means of the Seizure Order No. 55/22 dated April 28, 2011. For release of the seized goods, 40 per cent of the total value of the goods in cash was demanded as security.

In the second case, the Assistant Commissioner (In-charge), Trade Tax, Mobile Squad 2nd Unit, Mathura, intercepted vehicle No. RJ-05, G-3752 on April 5, 2011. It was found that the same was carrying nine metric tonnes of TMT and MS bar. The said consignment was being transported by the assessee under Tax Invoice No. 040 dated April 4, 2011. The said consignment was also seized under Seizure Order No. 55/08 dated April 8, 2011 on the ground that it did not accompany form XXI.

The assessee not being satisfied with the seizure order made applications u/s 48(7) of the Value Added Tax Act in both the cases, which had been rejected vide orders dated April 19, 2011 and dated May 3, 2011, respectively. The assessee filed two second appeals as referred to above. Both the appeals have been rejected under the impugned common order of the Trade Tax Tribunal.

On behalf of the assessee it was contended before the Tribunal that in terms of the circular dated January 7, 2011 on consignment of iron and steel of weight up to nine metric tonnes, requirement of form XXI had been dispensed with and therefore, in the facts of the present case, seizure itself was illegal.

The Trade Tax Tribunal under the impugned order with reference to earlier circular dated January 1, 2011, has proceeded to hold that since the value of the consignment covered by first seizure being. Seizure Order No. 55/22 dated April 28, 2011, was more than Rs. 50,000, requirement of form XXI was mandatory irrespective of the circular dated January 7, 2011 on the ground that the subsequent circular did not annul the earlier circular dated January 1, 2011. Therefore, both would operate irrespective of the other. The Tribunal has also recorded a finding that since the total weight of the goods transported by the same assessee, covered by documents of one and the same date, by two transport vehicles, works out to 17.61 metric tonnes, there was a deliberate intention on the part of the assessee to avoid the requirement of form XXI.

In respect of Seizure Order No. 55/08 dated April 8, 2011, it has been recorded that since the consignment was of nine metric tonnes it was mandatory under the subsequent circular dated January 7, 2011 to carry form XXI along with such consignment.

Challenging the order passed by the Tribunal, it is contended on behalf of the assessee that the order passed by the Tribunal is based on misreading of circular dated January 7, 2011. He submits that it was open to the assessee to have transported the consignment in two different vehicles covered by two different tax invoices. In respect of such transportation of goods, which is less than nine metric tone each it was not necessary that the consignment should have accompanied form XXI. Similarly in respect of second seizure order it is stated that the Tribunal is not justified in recording a finding that for consignment of iron and steel of less than nine metric tone alone were exempted when as a matter of fact from reading of the circular, it is apparently clear that consignments up to the weight of nine metric tonnes, as was the case in hand, did not require any form XXI.

The learned standing counsel for the Department in reply supports the order passed by the Tribunal.

I have considered the submissions made by the learned counsel for the parties and have examined the records of the present revisions.

I have gone through the circular dated January 7, 2011. Relevant portion of the circular reads as follows:

From reading of the aforesaid circular, it is apparently clear that for consignment carrying up to nine metric tonnes of iron and steel, requirement of form XXI has been done away with. In the facts of the present case, prima facie it is apparently clear that consignments, which have been seized, were being transported under three tax invoices by different vehicles. Total weight in each of these consignments was nine or less than nine metric tonnes, which was squarely covered by the exemption clause contained in circular dated January 7, 2011. This count may record that it is always open to the assessee to transport his goods in a manner so that requirement of relevant form XXI stands exempted under circular referred to above. No illegality or any attempt to avoid any legal obligation can be attributed, if the assessee acts in that particular manner. Findings recorded by the Tribunal are therefore, legally not justifiable.

In the totality of the circumstances, on record, this court finds it just and proper to direct that the seized goods may be released on furnishing security other than cash or bank guarantee for the value of the tax leviable on the consignment. Any finding recorded above would not prejudice the penalty proceedings in any manner. Both the trade tax revisions are disposed of accordingly.