Sherowali Trade & Transport vs Commissioner of Taxes, Government of Tripura and Others

Deepak Gupta, C.J.—By means of this petition, the petitioner has challenged the order dated December 5, 2011/January 5, 2012 passed by the Commissioner of Taxes, while disposing of the revision petition of the petitioner. The undisputed facts are, that the petitioner is a transporter. According to the petitioner, he had sent goods of different consignors through truck No. HR-74-2624. These goods were being transported from Delhi to Tripura. The goods were being transported through the transport company of the petitioner though now it is alleged that the truck did not belong to the petitioner but belonged to somebody else. The truck passed through various States of India and when it reached the Churaibari check-post at the entrance of Tripura, the driver of the truck produced Form-XXVI which covered some items being carried in the truck.

According to the State, the driver did not inform the officers at the check-post about any other materials being carried in the truck and when the truck was physically inspected a number of other articles were found in the truck. Mainly the articles were PVC foot wares , foot mats, stationary, electronic goods and the most important article was 10 (ten) tons of Jira (cumin-seed). Therefore, the officials at the check-post seized the said articles. The Officer-In-charge of the Churaibari check-post held that on search of the truck 564 items of different types of taxable goods were discovered which had not been declared. Thereafter the value of these goods were assessed at Rs. 21,81,500 out of which the value of the Jira was assessed at Rs. 18,00,000. The quantity of Jira was 10 (ten) tons, i.e., 10,000 kilogram. As such, the rate of jira accepted by the officer-in-charge of Churaibari check-post was Rs. 180 per kilogram.

The petitioner filed a revision petition and mentioned in the revision petition that the consignments were accompanied by consignment notes, transit-pass of the Assam Sales Tax Authority and manifest as required under the Tripura VAT Act. It was alleged that the driver was from the State of Haryana and was not well conversant to the procedure and he, therefore, only produced the form XXVI and did not know about the production of the goods which were covered by form XXV. Therefore, it was urged that the mistake was unintentional. It was also alleged that the value of the goods had been fixed at a rate much higher than the market rate. Thereafter the revisional authority passed an order on October 20, 2011 which reads as follows :

"Government of Tripura In the Court of the Revisional Authority (Commissioner of Taxes) Gurkhabasti : P.N. Complex : Agartala

Rev. Case No. 832011, dated 25-7-2011/7522-23 Dt. 20-10-2011

Seizure Case No. 365/CRB/2011-12 dated June 17, 2011

ORDER

27-8-2011

Sri B.N. Majumder, learned advocate, is present on behalf of the petitioner Sri B. Deb, P.O. is also present.

Learned advocate on behalf of the petitioner submitted that it was a mistake on the part of the driver to enter CRB check-post without form XXV. However, there was no mala fide intension on the part of the driver. He pleaded before the court for giving chance to submit form XXV with full details.

In turn, the P.O. submitted that the petitioner tried to bring material without any valid document and permit. The petitioner is very known transporter doing business for more than a decade. Therefore, it cannot plead ignorance about the Rules and Regulations. In fact the petitioner at the time of seizure did not have any documents like CN, invoice and permit, etc. Therefore, the seizure is very much valid.

Heard learned advocate of the petitioner in detail. The petitioner is given a chance to submit the related documents before the authority if any in support of his claim within seven days. The O/C Churaibari Check-post is directed to send sample of seized jira immediately.

The case is adjourned.

Sd/ Commissioner of Taxes Revisional Authority

Copy to :--

The Superintendent of Taxes, Churaibari Check-post, North Tripura.

M/s. Sherowali Trade & Transport, 66 J.B. Road, Agartala."

This order was never been challenged by the petitioner and it accepted the order to be correct. As per this order the counsel had admitted that there was a mistake on the part of the driver to enter the Churaibari check-post without form XXV. It was urged that there was no mala fide intention and the counsel pleaded before the court for giving another chance to produce form XXV with full details. The Commissioner after hearing the counsel gave a chance to the petitioner-company to submit the related document before the authority, if any within 7 (seven) days. Even thereafter, no invoices of the goods were produced. Only a copy of the manifest and the transit certificate issued by the authorities in Assam State was produced.

A transporter is required to have complete records of the goods which he transports and none of these documents were produced before the authority. What was produced before the authority were some invoices of jira which are unrelated to the goods being transported in the present instance.

Section 67 of the Tripura Value Added Tax Act reads as follows :

"67. Establishment of check-posts for inspection of goods in transport.-(1) The Government may, with a view to prevent or check avoidance or evasion of tax, by notification in the official gazette, direct the establishment of the check-post or barrier at such places as may be specified in the notification and every officer who exercises powers and discharges his duties at such check-post by way of inspection of documents produced and goods being moved, shall be in-charge.

(2) The driver or person in-charge of vehicle or carrier of goods in movement shall-

(a) carry with him the records of the goods including challan, bills of sale or dispatch memos and prescribed declaration form duly filled in and signed by the consignee or transporter of goods carried;

(b) stop the vehicle or carrier at every check-post set up under sub-section (1) or at any other place by an officer authorised by the Commissioner in this behalf;

(c) produce all the documents including the prescribed forms relating to the goods before the officer-in-charge of the check-post or the authorised officer;

(d) give all the information in his possession relating to the goods;

(e) allow the inspection of the goods for search of the vehicle by the officer-in-charge of the check-post or any authorised officer.

(3) Where any goods are in movement within the territory of the State of Tripura, an officer empowered by the State Government in this behalf may stop the vehicle or the carrier or the person carrying such goods, for inspection, at any place within his jurisdiction and provisions of sub-section (2) shall mutatis mutandis apply.

(4) Where any goods in movement are without documents, or are not supported by documents as referred to in sub-section (2), or documents produced appeared to be false or forged, the officer-in-charge of the check-post or the officer empowered under sub-section (3), may-

(a) direct the driver or the person in-charge of the vehicle or carrier or of the goods not to part with the goods in any manner including by transporting or re-booking, till a verification is done or an enquiry is made, which shall not take more than seven days;

(b) seize the goods for reasons to be recorded in writing and shall give receipt of the goods to the person from whose possession or control they are seized.

(5) The officer-in-charge of the check-post or the officer empowered under sub-section (3), after having given the person in-charge of the goods a reasonable opportunity of being heard and after having held such enquiry as he may deem fit, shall impose for possession or movement of goods, whether seized or not, in violation of the provisions of clause (a) of sub-section (2) or for submission of false or forged documents in addition to tax leviable, a penalty equal to double the amount of tax, or rupees one thousand, whichever is higher.

(6) During the pendency of the proceeding under sub-section (5), if anyone prays for being impleaded as a party to the case on the ground of involvement of his interest therein, the said officer-in-charge or the empowered officer on being satisfied, may permit him to be included as a party to the case; and thereafter, all provisions of this section shall mutatis mutandis apply to him.

(7) The officer-in-charge of the check-post or the officer empowered under sub-section (3) may release the goods to the owner of the goods or to any person duly authorised by such owner on payment of the tax and penalty imposed under sub-section (5).

(8) Where the driver or person-in-charge of the vehicle or the carrier is found guilty for violation of the provisions of sub-section (2), subject to the provisions of clause (a) of sub-section (4), the officer-in-charge of the check-post or the officer empowered under sub-section (3) may detain such vehicle or carrier and affording an opportunity of being heard to such driver or person-in-charge of the vehicle or the carrier, may, impose a penalty not exceeding ten thousand rupees.

(9) Where a transporter, while transporting goods, is found to be in collusion with dealer to avoid or evade tax, the officer-in-charge of the check-post or the officer empowered under sub-section (3), shall detain the vehicle or carrier of such transporter and after affording him an opportunity of being heard with prior approval in writing of the Commissioner may confiscate such vehicle or carrier."

A bare perusal of section 67 of the Act shows that the Government is empowered to set up check-posts to ensure that goods are transported in the State of Tripura after payment of tax. The driver or person-in-charge of the vehicle in which such taxable goods are being carried is required to carry with him the record of the goods including challans, bills of sale or despatch, memos and prescribed declaration form duly filled in and signed by the consignee or transporter of the goods carried. Therefore, a duty is cast upon the driver or the person-in-charge of the vehicle to carry the challan, bills of sale or despatch memos and prescribed declaration forms duly filled in.

Ignorance of law cannot be pleaded in this regard. In any event, the petitioner is one of the biggest transporter in the State of Tripura and it is the duty of the petitioner when it either hires trucks or transports materials through its own trucks to ensure that the provisions of section 67 are complied with in letter and spirit. The petitioner, transporter company cannot plead that its drivers were not aware of the position of law. Not only this, a driver is required to give information in relation to the goods. Therefore, when the driver is questioned he must inform the officers about all the material being carried in the truck,

Sub-section (3) of section 67 of the Act, empowers the officers to stop the vehicle. Sub-section (4) of the Act deals with those cases where the goods in movement are being carried without any documents or are not supported by documents as are referred to sub-section (2) of the Act. The officer-in-charge of the check-post is entitled to seize the goods or direct the person-in-charge of the vehicle to ensure that the goods are not further transported. Sub-section (5) of the Act, casts a duty upon the officer-in-charge of the check-post to give reasonable hearing/opportunity to the person-in-charge of the goods or the vehicle a reasonable opportunity and thereafter fix the tax payable, penalty payable, etc. Under sub-section (8) of the Act, penalty can also be imposed and under sub-section (9) of the Act, where a transporter is found to be in collusion with the dealer to avoid or evade taxes, the vehicle can also be detained.

Rule having framed under the TVAT Act and rule 49 of the Rules reads as follows :

"49. (1) Every declaration to be given under clause (a) of sub-section (2) of section 67 of the Act shall contain a correct and complete accounts of the goods 167 carried by the transporter and shall be in form XXV in triplicate and duly signed by him.

(2) The officer-in-charge, of the check-post or the barrier on being satisfied about the correctness of the statements made and particulars contained in the declaration in form XXV, shall seal it with his official seal and give a permit. The duplicate and triplicate copies of form XXV shall thereupon be returned to the transporter and the original copy shall be retained by the officer-in-charge and the same shall be forwarded to the concerned Superintendent of Taxes after the end of every month :

Provided that a transporter who has obtained a permit at the first check-post or barrier under this sub-rule shall not be required to make any further declaration at any other check-posts or barriers in respect of only so much of the consignments to which the permit relates.

(3) Registered transporter, carriers or transporting agent under sub-rule (1) of rule 17, shall obtain the form XXV, subject to the provisions of rule 50, from the concerned Superintendent of Taxes on payment of such price as may be notified by the Commissioner. The form shall be in triplicate and serially numbered and account shall be maintained in the office of the Superintendent of Taxes in a Register. No form, other than form XXV supplied from the Office of the Superintendent of Taxes, shall be entertained: Registered transporter shall submit triplicate copy of form XXV to the concerned Superintendent of Taxes at the time of obtaining further supply of the said form :

Provided that the transporter may be supplied with the form XXV in case the Superintendent of Taxes is satisfied that due to reasons beyond control of the transporter it is not able to produce the triplicate copy of form XXV taken earlier and the transporter has submitted an undertaking to produce such triplicate copy within two months.

(4) If the Superintendent of Taxes considers it necessary so to do, he may specify the period on the form XXV so issued by him, for which it will be valid.

(5) if any form XXV obtained by a registered transporter under sub-rule (3) is lost or destroyed or stolen, it should immediately report the fact of such loss, destruction or theft to the Superintendent of Taxes concerned.

(6) When the registration certificate of a transporter is cancelled/suspended, such transporter shall forthwith surrender to the concerned Superintendent of Taxes, all unused form XXV remaining in stock with it and the concerned Superintendent of Taxes shall thereupon cancel and mutilate such form so surrendered."

Sub-rule (1) of rule 49 clearly lays down that every declaration to be given under clause (a) of sub-section (2) of section 67 shall contain a correct and complete account of the goods carried by the transporter and shall be in form XXV in triplicate and signed by him. Thereafter the Officer-in-charge of the check-post or the barrier on being satisfied of the correctness of the statement shall affix his official seal on the same and give a permit to transport the same. Sub-rule (3) of the Act also provides that a registered transporter, carrier or transporting agency under sub-rule (1) of rule 17 can obtain form XXV from the concerned Superintendent of Taxes on such payment of such taxes as may be notified by the Commissioner. The form shall be in triplicate and serially numbered.

Thus, it is the duty of the transporter to obtain form XXV. This has to be obtained in advance and it cannot be obtained at the check-post. It is the duty of the registered transporter, carrier or transporting agency to obtain sufficient numbers of form XXV in advance and see that they are duly and properly filled in prior to the driver entering the check-post. We are unable to accept the submission of Mr. B.N. Majumder that these forms have to be filled in at the check-post.

If we read section 67(2) along with rule 49 of the Act, it is obvious that the driver or person-in-charge of the vehicle is expected to carry with him the record of the goods which record include challan, bills of sale or despatch memos and prescribed declaration form. The prescribed declaration form may be a form XXV or form XXVI but this has to be filled in well in advance. Therefore, when a person carries goods without carrying the requisite documents then a presumption can be raised that his intention is to evade taxes.

In the present case, even when the revision petition was filed neither form XXV was filed with the revision petition nor the bills and invoices of the goods given. What was produced was only a copy of the manifest giving the value of goods and a copy of the transit form issued by the authorities in Assam. Here it would be pertinent to mention that the authority in Assam would be least concerned with the value of goods because they would only be charging transit taxes, if any which would have no bearing with the value of the goods.

In the present case, the Commissioner even gave an opportunity which he was not required to do to the transporter to produce material before him within 7 (seven) days. Even thereafter neither form XXV was produced nor the bills or invoices of the goods which were actually transported in the truck, in question on June 17, 2011 were produced. What was produced were the bills and invoices of jira not related the consignment, in question. In fact these are invoices of jira which had been collected at Agartala but in the petition it is mentioned that these rates reflected in these invoices were accepted by the Churaibari check-post.

Therefore, we are clearly of the view that the action of the officers at the check-post in seizing the goods and holding that they were being transported with a view to evade tax, is justified and calls for no interference.

Having held so, the next issue is whether the goods were properly valued for the purpose of assessing the tax, penalty, etc. In this behalf reliance has been placed by the petitioner on the invoices produced in which invoices the rates of jira vary from Rs. 106 per kilogram to Rs. 121 per kilogram. In the petition as well as in the application filed by the Commissioner of Taxes, the petitioner has clearly mentioned that Form-XXVI wherein the value of the jira was declared to be Rs. 106.99 was declared and accepted by the Superintendent of Taxes. Therefore, the rate of jira would vary between Rs. 107 to Rs. 121 per kilogram and taking even the highest rate we assess the rate of jira at Rs. 121 per kilogram. As far as the other goods are concerned, despite opportunity having been given to him has failed to produce any material as to what was the value of the goods.

Therefore, we allow the petition to the limited extent that the value of jira shall be taken to be Rs. 121 per kilogram and rest of the order of the Commissioner is upheld. The tax, penalty, interest, etc., shall be charged in accordance with the aforesaid rate. With these observations, this petition is disposed of. No cost.