Suma Oil Agencies vs The Commissioner of Commercial Taxes in Karnataka

Jawad Rahim, J.—Petitioner, a proprietary concern registered under the provisions of Central Sales Tax Act, 1956, and also under the provisions of the Karnataka Value Added Tax Act, 2003 is in writ action against the action of the respondent-Revenue in blocking the downloading/generating e-Sugam forms by the petitioner at the commencement of transportation of goods. Petitioner seeks direction in the nature of mandamus to the respondents to remove the restriction and allow it to generate e-Sugam for each transaction relating to transportation of goods. As the issue falls in a narrow compass, I had requested Sri S.V. Girikumar, learned Additional Government Advocate, to take notice.

Heard both sides.

From the narration of facts in the petition and the submission of learned Counsel on both sides, it could be seen, petitioner is engaged in purchase and sale of edible oils from registered dealers within the State of Karnataka and also outside the State. For that purpose, necessarily it is engaged in transportation of merchandise from the factory premises to the different destinations and the carrier has to carry relevant documents which shall accompany the goods, as envisaged u/s 53(2) of the Karnataka Value Added Tax Act.

It is not in dispute Section 53(2) of the Act compels the owner in charge of the goods vehicle or a boat, ship or similar vessel to carry with him the goods vehicle record, trip sheet or a log book, as the case may be. Besides under Rule 157(1)(a) of the Karnataka Value Added Tax Rules, 2005, the document referred is: delivery note in Form VAT 505 issued by the owner or the consignor of goods in respect of such goods as may be notified by the Commissioner and where the goods are carried as a result of sale, a tax invoice or bill of sale. However, as envisaged in clause (b) of Rule 157(1) of the Rules, a tax invoice or a bill of sale where the goods are carried as a result of sale are not covered by clause (a). Besides under the amended provisions of the Act, the new system of generating e-Sugam is mandatory before commencement of transportation of goods.

Petitioner in this case claims to have complied with all the relevant provisions of the Act with regard to transportation of goods and has been generating e-Sugam. In furtherance of its business activity, however, petitioner could not download e-Sugam forms as its account was blocked. Consequently the goods could not be transported as it will be in contravention of Section 53(2) of the Act.

The learned Government Advocate could not point out to any provision under the Act which empowers the functionaries in the Act to restrain generation of e-Sugam by the dealer even if the assessee is in default of payment of tax in respect of other assessments. In the circumstances, without prejudice to the power of the respondents to recover arrears of tax, if any, and other revenue liability, there shall be a mandamus directing the respondents to remove the restriction imposed on generating e-Sugam forms forthwith.

Petition is allowed in terms of this order.