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Judgment
Ashwani Kumar Mishra, J.—Revisionist, a transporter stationed at Delhi, is before this Court in the present revision, questioning legality of an order passed by the Tribunal, upholding seizure of goods and permitting its release upon deposit of security amounting to Rs.3,96,800/-. Revisionist is not a dealer registered under U.P. Value Added Tax Act, 2008 (hereinafter referred to as the ''Act'').
It is alleged that 52 different persons booked consignment with it for transportation from Delhi to Jamshedpur. Invoices were furnished by the consignors and on such basis applicant prepared challan along with GR''s for 484 boxes valued at Rs. 11,41,766/-. The goods were dispatched vide transport vehicle No. HR 37 C-9533. Before entering the State of U.P., applicant-revisionist obtained transit declaration form (TDF-I) No. D20161100247018 as is required under the U.P. VAT Rules, 2008. Entry point of vehicle in the State was shown at Mohan Nagar, Ghaziabad on 21.11.2016, whereas exit point of vehicle was shown as Bindomganj at Sonebhadra on 25.11.2016. On 21.11.2016, just after the vehicle entered U.P., it was checked by mobile squad and the driver of the vehicle produced TDR-1, challan dated 18.11.2016 for 484 boxes valued at Rs. 11,41,766/-; invoices; 52 GR''s and weighment receipts. According to the revisionist, certain discrepancy was noticed and vehicle was detained. The driver left the vehicle and apparently returned to Delhi. A show cause notice was issued on 24.11.2016, fixing 29.11.2016 as the date. Notice also indicated that physical verification of goods is required. The notice was allegedly pasted on the vehicle. None appeared on 29.11.2016. Applicant denies receiving of this notice. A seizure order was passed on 30.12.2016, recording that notices were sent for physical verification of goods and in presence of the applicant''s representative goods were physically verified. It was found that 232 items transported were over and above the goods specified in TDF-1, and 40% of its estimated value was directed to be deposited for release of goods. The revisionist preferred a representation under Section 48 (7) of the Act, which came to be rejected on 2.2.2017. It then preferred an appeal before the Tribunal, which got rejected by the Tribunal vide order impugned. Thus aggrieved, the revisionist is before this Court in the present revision.
It is contended that since a valid TDF form was shown along with relevant documents, required to be possessed with the transport vehicle, the ex-parte proceedings of seizure and direction to deposit 40% of value of such goods towards security is wholly unjustified. It is stated that the proceedings are otherwise bad for non-service of show cause notice. It is asserted that such notice cannot be served by affixing it on vehicle under Rule-72. Grievance is also raised regarding valuation of goods and its physical verification. Submission is that the entire proceedings are unsustainable.
Learned Standing Counsel defends the action contending that details of consignor and consignee were not shown and the goods were being transported without proper documentation.
I have heard Sri Nishant Mishra for the revisionist and Sri Bipin Kumar Pandey, learned Standing Counsel for the State.
Before adverting to the contentions raised, it would be appropriate to notice statutory scheme regulating passing of goods through the State of Uttar Pradesh. Section 52 of the Act provides for passing of goods through State and is reproduced:-
"Section 52. Provision for goods passing through the State:
When a vehicle coming from any place outside the state and bound for any other place outside the state, and carrying goods referred to in sub-section (1) of section 51, passes through the state, the driver or other person in charge of such vehicle shall obtain in the prescribed manner an authorisation for transit of goods from the officer in charge of the first check post or barrier after his entry into the state and deliver it to the officer in charge of the last check post or barrier before his exit from the state, failing which it shall be presumed that the goods carried thereby have been sold within the state by the owner or person in charge of the vehicle;
Provided that the goods carried by such vehicle are, after their entry into the state, transported outside the state by any other vehicle or conveyance, the onus of proving that the goods have actually moved out of the state shall be on the owner or person in charge of the vehicle.
Explanation - For the purposes of this section, the hirer of the vehicle shall also be deemed to be the owner of the vehicle."
Rule 58 of the U.P. Value Added Tax Rules, 2008, is the relevant rule for the purpose and provides as under:-
"58. The Transit of goods by road through the State.-The driver or person-in-charge of a vehicle carrying goods referred to in sub-section (1) of section 50, coming from a place outside the State and destined for a place outside the State, passes through the State, the driver or person-incharge of a vehicle shall carry such documents and follow such procedures as may be determined by general or special order issued by the Commissioner from time to time, failing which it shall be presumed that the goods carried thereby are meant for sale within the State by the owner or person-in-charge in charge of the vehicle."
A circular dated 3.9.2013 has been issued by Commissioner Commercial Tax under Rule 58, which continues to subsist with certain modification and is extracted hereunder:-
i= la0&lpy ny&V~kaftV ikl&2013&14@1341@1314041@ okf.kT; dj
dk;kZy; dfe''uj okf.kT; dj
lpy ny&vuqHkkx
mRrj izns''k
fnukad% 3 flrEcj] 2013] y[kum
vkns''k
bl izdkj ds rF; fujUrj izdk''k esa vk jgs gSa fd ikjxeu i= dh vkM+ esa izns''k esa lqfu;ksftr <+ax ls djkioapu fd;k tk jgk gSA ekuuh; mPp U;k;ky; }kjk loZ Jh lhek ,.Vj izkbftt ckjx<+] mM+hlk cuke dfe''uj okf.kT; dj m0iz0 2013 ,u0Vh0,u0 okY;we&52 237 ds izdj.k esa ikfjr vkns''k esa Hkh bl laca/k esa foHkkx }kjk leqfpr dk;Zokgh fd;s tkus dh vis{kk dh x;h gSA
of.kZr ifjfLFkfr;ksa esa ;g n`f"Vxr j[krs gq;s fd mDr ifjisz{; esa fd;s tk jgs djvioapuk ds iz;klksa dks fu"Qy fd;k tk lds] lkFk gh leqfpr :i ls laO;ogkj djus okyksa dks fuckZ/k :i ls eky dk ifjogu fd;s tkus ds volj Hkh miyC/k jgsa] ;g vko'';d gks x;k gS fd orZeku esa ykxw ikjxeu i= ls lacaf/kr izfdz;k dks la''kksf/kr djrs gq;s ubZ izfdz;k dk;Z:i esa yk;h tk,A
vr% mRrj izns''k ewY; laof/kZr dj vf/kfu;e] 2008 dh /kkjk&52 rFkk m0iz0 ewY; lacaf/kr dj fu;ekoyh] 2008 ds fu;e&58 ds iznRr vf/kdkjksa dk iz;ksx djrs gq, eSa dfe''uj okf.kT; dj] mRrj izns''k] ,sls fdlh okgu ds laca/k esa] tks jkT; ds ckgj ds fdlh LFkku ls jkT; ls gksrs gq;s] jkT; ds ckgj xUrO; ds fy;s tk jgk gks rFkk /kkjk&50 dh mi/kkjk&1 esa fufnZ"V eky dk ikjxeu dj jgk gks] M~kbZoj ;k izHkkjh O;fDr }kjk eky ds ifjogu gsrq fuEukuqlkj fofgr izi=ksa ,oa fofgr izfdz;k dks ;g Li"V djrs gq, vo/kkfjr djrk gwWa fd bldk vuqikyu u fd, tkus dh n''kk esa ;g ekuk tk,xk fd okgu ds Lokeh vFkok izHkkjh O;fDr }kjk ifjofgr eky jkT; esa fcdzh ds mn~ns''; ls yk;k tk jgk gS&
1- mi;qZDrkuqlkj eky ds ikjxeu gsrq izR;sd O;fDr@V~kaliksVZj }kjk ftl okgu ls ,sls eky dk ifjogu fd;k tkuk gS] mls foHkkxh; osclkbV comtaxup.nic.in ij ,sls okgu dks jftLV~j djkuk vfuok;Z gksxkA ;g dk;Z dsoy ,d ckj gh djuk gksxkA blds fy, fuEu rF; mi;qZDr foHkkxh; osclkbV ij viyksM fd, tk;saxs&
1- okgu la0
2- okgu Lokeh dk uke rFkk irk&ifjogu foHkkx }kjk tkjh okgu dh vkj0lh0 ds vuqlkj
3- okgu Lokeh dk PAN
4- okgu Lokeh dk eksckbZy uEcj
5- okgu dk psfll uEcj
6- okgu dk batu uEcj
7- V~kaliksVZ dEiuh dk uke ftlls okgu lEc) gS
8- V~kaliksVZ dEiuh ds Lokeh dk uke o irk
9- V~kaliksVZ dEiuh ds Lokeh dk PAN
10- V~kaliksVZ dEiuh ds Lokeh dk eksckbZy uEcj
11- V~kaliksVZj dh lfoZl VSDl iath;u la[;k
mDr lwpuk viyksM djrs gh lacaf/kr okgu jkT; ds ckgj ls eky dk ikjxeu izkUr esa gksdj vU; jkT; esa ys tkus ds fy;s jftLV~j gks tk,xk vkSj blds fy, ,d jftLV~s''ku uEcj tSujsV gks tk,xk rFkk okgu Lokeh rFkk V~kaliksVZj ds eksckby uEcj ij sms gks tk,xkA ;g jftLV~s''ku uEcj gh izFke ckj ikjxeu ?kks"k.kk i= ds fy;s ikloMZ dk dk;Z djsxk rFkk okgu la0 ykx bu vkbZ Mh dk dk;Z djsxkA ikjxeu ?kks"k.kk i= gsrq jftVs~''ku uEcj rks vifjorZuh; gksxk ijUrq ;g ikloMZ ifjorZuh; gksxkA
;fn vxzsRrj ;g okgu fdlh vU; V~kaliksVZ dEiuh ls lEcU/k gks tkrk gS rks mldh lwpuk osclkbV ij tkdj la''kksf/kr dh tk ldsxh] ijUrq ;fn okgu fdlh vU; O;fDr }kjk dz; dj fy;k tkrk gS] vFkkZr okgu Lokeh esa ifjorZu gks tkrk gS rc lacaf/kr okgu dks iqu% mDrkuqlkj jftLV~j djkuk vfuok;Z gksxkA blds fy, okgu dh ikjxeu i= gsrq jftLVs~''ku la0 ikloMZ rFkk okgu la0 ykx bu vkbZ Mh dk dk;Z djsaxsA
2- mi;qZDrkuqlkj eky ds ikjxeu gsrq izR;sd O;fDr@V~kaliksVZj }kjk foHkkxh; osclkbV comtaxup.nic.in ij miyC/k ikjxeu ?kks"k.kk i= QkeZ& TDF-1 ds izk:i esa Hkjuk vfuok;Z gksxkA bl ikjxeu ?kks"k.kk i= esa okgu dks iz''uxr eky lfgr izns''k ds ftl Hkh lhekorhZ LFkku ls ckgj ys tkuk gS] mldh ?kks"k.kk Hkh djuh gksxhA ;g 37 lhekorhZ LFkku osclkbV ij miyC/k gS rFkk buesa esa ftl Hkh {ks= esa gksdj okgu izns''k dh lhek ls ckgj tk,xk mldk mYys[k ikjxeu ?kks"k.kk i= esa djuk vfuok;Z gksxkA lkFk gh ml le;kof/k dks Hkh vafdr djuk vfuok;Z gksxk ftlesa lacaf/kr okgu izns''k dh lhek esa izos''k ds mijkUr xUrO; ij igqapsxkA bl le;kof/k ds iwoZ lacaf/kr okgu ds fy;s vU; ikjxeu ?kks"k.kk i= iqu% tkjh ugh fd;k tk ldsxkA
3- ikjxeu ?kks"k.kk i= QkeZ& TDF-1 esa ifjogu fd, tk jgs eky dk otu dh Hkh ?kks"k.kk djuh gksxhA blds fy, izkUr dh lhek esa izos''k ds iwoZ fdlh fudVLFk /keZdkaVs ls otu djkdj bldk mYys[k djuk gksxkA ikjxeu ?kks"k.kk i= esa :V (route) dh Hkh ?kks"k.kk djuh gksxh ftlesa izns''k esa izos''k rFkk fudklh ds LFkku ds lkFk&lkFk rhu vU; egRoiw.kZ LFkkuksa dh ?kks"k.kk djuk vfuok;Z gksxk tgka gksdj iz''uxr okgu vUrfuZfgr eky lfgr tk;sxkA
4- izkUr ls gksdj tkus okys eky dks izkUr ds vanj fof''k"V dkj.kksa ls] ;fn ,slk djuk vifjgk;Z gS] rks ,slh fLFkfr esa iYVh fd;k tk ldsxkA blds fy, fuEu izfdz;k ds vuqlkj dk;Z djuk gksxk&
1- ftl okgu ds lkFk vc rd eky dk ifjogu fd;k x;k gS mlds ikjxeu ?kks"k.kk i= gsrq iath;u la[;k ds ikloMZ ds :i esa rFkk ,sls okgu la[;k dks ykx bu vkbZ Mh ds :i esa iz;ksx djrs gq;s foHkkxh; osclkbV ij tkdj lacaf/kr TDF-1 dks [kksydj blesa ml okgu dk mYys[k djuk gksxk ftlesa vc rd iz;qDr okgu dk leLr eky iYVh fd;k tkuk gSA
2- ;g Hkh lqfuf''pr djuk gksxk fd ftl okgu esa eky dks iYVh fd;k x;k gS og ikjxeu i= gsrq foHkkxh; osclkbV ij iathd`r gksA ;fn ,slk ugh gS rks lcls igys mi;qZDr funsZ''k la0&1 esa of.kZr izfdz;k ds vuqlkj okgu dks ikjxeu ?kks"k.kk i= gsrq iathd`r djkuk vfuok;Z gksxkA lkFk gh bl okgu ls lacaf/kr vU; fooj.k TDF-1 esa vis{kkuq:i Hkjus gksaxsA
3- mDr ds mijkUr ml LFkku rFkk fnukad dk mYys[k djuk gksxk tgkWa ;g eky iYVh fd;k x;kA blds mijkUr bl u, okgu ls iz''uxr eky dk ifjogu vxzsRrj fd;k tk,xkA
5- izns''k ds vanj ls xqtjus okyk mijksDRk ifjisz{; dk eky lfgr okgu ;fn ikjxeu ?kks"k.kk i= esa mfYyf[kr :V (route) ls fHkUu :V (route) esa ik;k tk,xk rks izFke n`"V;k ;g fo''okl djus dk vk/kkj gksxk fd dj viopu ds mn~ns''; ls ,sls eky dks izkUr ckgj ls izkUr esa fcdzh ds mn~ns''; ls vk;kr fd;k tk jgk gS] ftlds laca/k esa vko'';d vFkZn.M vkfn dh fof/kd dk;Zokgh dh tk;sxhA ikjxeu ?kks"k.kk i= izns''k ds vUnj dh ?kksf"kr frfFk ls vf/kdre pkj fnuksa ds fy, cS/k gksxkA ;g ikjxeu ?kks"k.kk i= mijksDr foHkkxh; osclkbV ls bls Hkjus ds ckn MkmuyksM fd;k tk ldsxkA
6- ikjxeu ?kks"k.kk i= TDF-1 dks iz''uxr okgu ds eky lfgr izns''k dh lhek esa izos''k ds iwoZ gh Hkjuk vfuok;Z gksxk rFkk izns''k ds ckgj ls izns''k ds gksrs gq, izns''k ds ckgj tkus okys eky ds lkFk eky ls lacaf/kr izi=ksa rFkk fcy@fcYVh vkfn ds vfrfjDr bl ikjxeu ?kks"k.kk i= TDF-1 dks Hkh j[kuk vfuok;Z gksxkA
7- mDr ds lEcU/k esa ;g Hkh vfuok;Z gksxk fd lacaf/kr okgu pkyd@V~kaliksVZj mi;ZqDr TDF-1 esa ?kksf"kr vius eksckby Qksu ls foHkkxh; eksckby ua0 09212357123 ij fuEu izk:i esa ;g SMS dj nsxk fd lacaf/kr ikjxeu i= ls lacaf/kr okgu eky lfgr izns''k dh lhek esa izos''k dj x;k gSA bl eksckby uEcj ij fd;k x;k SMS foHkkxh; osclkbV ij Lor; gh viyksM gks tk,xkA
SMS dk ik:i
iz''uxr ikjxeu ?kks"k.kk i= TDF-1 dk dzekad blds ckn Lisl nsdj 1
1 dk vFkZ ;g gksxk fd okgu izns''k dh lhek esa izos''k dj x;k gSA ;g SMS izns''k dh lhek esa izos''k djus ds rqjUr ckn djuk vfuok;Z gksxkA
8- ;fn fdlh okgu esa dsoy izkUr ds ckgj ls ykrs gq, izkUr ds ckgj tkus ;ksX; eky ?kksf"kr gS rks ,sls okgu dk izFke ckj lapy ny }kjk HkkSfrd lR;kiu fd, tkus ij ikjxeu ?kks"k.kk i= ij lacaf/kr lpy ny vf/kdkjh }kjk viuh lhy lfgr HkkSfrd lR;kiu fd, tkus dh frfFk dk vadu djrs gq, gLrk{kj dj fn;k tk,xk vkSj jkLrs esa vU; lpu ny bdkbZ;ksa }kjk Hkh okgu@eky dh pSfdax dh tk ldsxh fdUrq lkekU; :i ls nks ckj ls vf/kd HkkSfrd lR;kiu ugh fd;k tk,xk vkSj ,d ckj HkkSfrd lR;kiu fd, tkus ds mijkUr iqu% HkkSfrd lR;kiu fd, tkus dh n''kk esa fMVsa''ku [email protected] crkvksa uksfVl esa blds dkj.kksa dk mYys[k fd;k tk;sxkA
9- vku ykbu ikjxeu ?kks"k.kk i= dks MkmuyksM djrs le; V~kaliksVZj dks lcls vf/kd rhu ewY; okyh bUokbl@fcy vkPNkfnr eky ds ewY; ds ?kVrs dze esa ls lacaf/kr dszrk rFkk fodzsrk dk uke] fVu uEcj] lacaf/kr bUokbl@fcy dk dzekad o fnukad rFkk ewY; dks Hkh ikjxeu ?kks"k.kk i= esa vafdr djuk gksxkA ;fn dszrk viathd`r gS rks fVu ds LFkku ij bl QhYM esa 09 fy[kdj blds ckn ukS ckj ''kwU; fy[kuk gksxkA
10- lacaf/kr ikjxeu i= ds lkFk gh ,d vU; ikjxeu [kkfjth izek.k i= TDF-2 ds izk:i esa osclkbV ij miyC/k gksxkA bls iz''uxr okgu ds lacaf/kr eky lfgr izns''k dh mi;qZDr lhek{ks=ksa esa ls p;u fd, x, LFkku ls izns''k dh lhek ds ckgj tkus ds 24 ?kaVs ds vUnj lacaf/kr okgu pkyd@okgu Lokeh dks foHkkxh; osclkbV ij gh Hkjdj ij viyksM djuk vfuok;Z gksxkA bl [kkfjth izek.k&i= TDF-2 esa ml LFkku dk fnukad lfgr mYys[k djuk vko'';d gksxk tgkWa ls bls Hkjdj viyksM fd;k tk,xkA lkFk gh okgu esa ynk eky iwoZor gS blds lk{; Lo:i otu dh dkWaVk iphZ dk Hkh mYys[k djuk gksxkA ;g otu ftl LFkku ls izns''k dh lhek ds ckgj tkuk gS] mlds fudVorhZ /keZdkWaVs ij djkuk vfuok;Z gksxkA foHkkxh; osclkbV ij ikjxeu [kkfjth izek.k&i= TDF-2 viyksM ugha fd, tkus rd] ,sls okgu ds laca/k esa iqu% ikjxeu ?kks"k.kk i= tkjh ugh gks ldsxkA
11- mDr ds laca/k esa ;g Hkh vfuok;Z gksxk fd lacaf/kr okgu pkyd@V~kaliksVZj mi;ZqDr TDF-1 esa ?kksf"kr vius eksckby Qksu ls foHkkxh; eksckby ua0 09212357123 ij fuEu ik:i esa ;g SMS dj nsxk fd lacaf/kr ikjxeu i= ls lacaf/kr okgu eky lfgr izns''k dh lhek ls ckgj pyk x;k gSA bl eksckby uEcj ij fd;k x;k SMS foHkkxh; osclkbV ij Lor% gh viyksM gks tk,xkA
SMS dk izk:i
iz''uxr ikjxeu ?kks"k.kk i= TDF-1 dk dzekad blds ckn Lisl nsdj 2
2 dk vFkZ ;g gksxk fd okgu izns''k dh lhek lhek ls ckgj pyk x;k gSA ;g SMS izns''k dh lhek ls ckgj pys tkus ds rqjUr ckn djuk vfuok;Z gksxkA
12- ;fn vxzsRrj tkWap ij [kkfjt izek.k i= TDF-2 dh ?kks"k.kk =qfViw.kZ ik;h tkrh gS rks ;g ekuk tk,xk fd iz''uxr okgu esa ynk eky izkUr esa gh vuyksM dj fy;k x;k gS vkSj ,slh fLFkfr esa m0iz0 oSV vf/kfu;e] 2008 ds lqlaxr izkfo/kkuksa ds vUrxZr vFkZn.M vkfn dh fof/kd dk;Zokgh dh tk;sxh vkSj ,sls vkjksfir vFkZn.M vkfn dh olwyh Hkw&jkT; dh rjg dh tk;sxhA
13- ;fn fdlh LFkku ls jkT; esa gksrs gq,] jkT; ds ckgj xUrO; ds fy, ?kksf"kr eky ds laca/k esa mi;qZDr vo/kkfjr izfdz;k dk ikyu ugha fd;k tkrk gS vFkok tkWap ij ;g rF; izdk''k esa vkrs gS fd iz''uxr eky vU;Fkk Hkh izns''k esa mrkjk tkuk gS vFkok ,slk eky izns''k esa mrjrs gq, ik;k tkrk gS fd m0iz0 oSV vf/kfu;r] 2008 ds lqlaxr izkfo/kkuksa ds vUrZxr vFkZn.M vkfn dh fof/kd dk;Zokgh dh tk;sxh vkSj ,sls vkjksfir vFkZn.M vkfn dh olwyh Hkw&jktLo dh rjg dh tk;sxhA
mDr ifjis{; esa iwoZ esa tkjh leLr funsZ''k rnuqlkj la''kksf/kr le>s tk;sa rFkk vc tkjh bu funsZ''kksa ds vuqlkj dk;Zokgh lqfuf''pr dh tk;sA ;g funsZ''k fnukad 15 flrEcj 2013 ls izHkkoh gksaxsA
(e`R;qat; dqekj ukjk;.k)
dfe''uj okf.kT; dj
mRrj izns''k"
A subsequent circular dated 5th July, 2016 is also issued, which reads as under:-
i=kad&lpy ny&V~kaftV ikl&2016&17@504 @okf.kT; dj
dk;kZy; dfe''uj okf.kT; dj] mRrj izns''k
lpy ny vuqHkkx
y[kum] fnukad % 5 tqykbZ] 2016
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okg~; izkUr ls mRrj izns''k jkT; ls gksdj fdlh vU; okg~; izkUr ds fy, jktekxZ }kjk ifjofgr gksus okys dj ;ksX; eky oLrqvksa ds fy, ifji= la[;k&lpy ny&V~kaftV ikl&2013&14@1341@1314041@ okf.kT; dj] fnukad 03-09-2013 ds vUrxZr Vh0Mh0,Q0&1 ,oa Vh0Mh0,Q&2 dh O;oLFkk dh xbZ gSA blh ifji= ds izLrj&10 esa ;g izkfo/kkfur gS fd ftu ekeyksa esa Vh0Mh0,Q0&1 fuxZr gS] ds lEcU/k esa Vh0Mh0,Q0&2 viyksM u fd;s tkus rd lEcfU/kr okgu ds fy, Vh0Mh0,Q0&1 tujsV ugha fd;k tk ldsxkA mDr ifji= ds izLrj&12 ,oa 13 esa ;g Hkh izkfo/kkfur gS fd tkap ds nkSjku ;fn Vh0Mh0,Q0&2 dh ?kks"k.kk =qfViw.kZ ik;h tkrh gS ;k ,sls eky ds ifjogu ds fy, vo/kkfjr izfdz;k dk ikyu ugha fd;k tkrk ;k tkap ds nkSjku ;g rF; izdk''k esa vkrs gS fd iz''uxr eky izns''k esa mrkjk tkuk gS vFkok ,slk eky izns''k esa mrkjrs gq, ik;k tkrk gS rks mRrj izns''k oSV vf/kfu;e&2008 ds lqlaxr izkfo/kkuksa ds vUrxZr fof/kd ,oa vFkZn.M vkjksi.k dh dk;Zokgh dh tk;sxh vkSj ,sls vkjksfir vFkZn.M vkfn dh olwyh Hkw&jktLo ds cdk;k dh Hkkafr dh tk;sxhA
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eqds''k dqekj esJke
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State legislature enacted Uttar Pradesh Value Added Tax Act, 2008, introducing value added system of taxation to levy tax on sale and purchase of goods in the State of U.P. Liability to pay tax under the Act arise only upon sale or purchase of goods within the State. No tax is leviable when goods enter the State from any place outside the State and is bound to any other place outside the State of U.P. The authorities of the State are empowered to scrutinize passing of goods through the State with the object of ascertaining as to whether such goods are actually bound for any place outside the State or are to be sold in the State of U.P. itself. Section 50 regulates import of goods into State by road against declaration. Section 50 of the Act is also reproduced:-
"50. Import of goods into the state by road against declaration.- (1) Any person (hereinafter in this section referred to as the importer) who intends to bring, import or otherwise receive into the State from and place outside the State any goods other than the goods named any described in Schedule-I in such quantity or measure or of such value, as may be notified by the State Government in this behalf, in connection with business, shall either obtain the prescribed form of declaration, in such manner as may be prescribed, from the assessing authority having jurisdiction over the area, where his principal place of business is situated or, in case there is no such place, where he ordinarily resides or shall download from official web site of the department in such manner as may be prescribed:
Provided that where the importer intends to bring, import or otherwise receive such goods otherwise than in connection with business, he may, at his option, in the like manner obtain the prescribed form of certificate.
Provided further that the Commissioner may notify the website in which the particulars prescribed to be contained in the declaration referred to in sub-section (1) shall be entered in respect of any specified class of goods or any specified class of dealers or as a result of any specified class of transaction to be notified by him. If the Commissioner notifies the website, the owner or the person in-charge of the goods which are carried by a vehicle, shall enter the prescribed particulars in the notified website and shall produce the proof of entering the particulars in such website, before the officer making search or inspection under this section, in the manner prescribed by the Commissioner.
(2)(a) where such goods are imported, brought or otherwise received into the state by registered dealer, he shall carry such declarations or documents as may be prescribed.
(b) where the goods are imported, brought or otherwise received into the state by a person otherwise than in connection with business, he may likewise carry such certificates and documents as may be prescribed.
(3) The driver or other person-in-charge of any vehicle carrying any goods referred to in the preceding sub-sections shall stop the vehicle when so required by an officer authorised under subsection (I) of section 45 or sub-section (I) of section 48 and keep in stationary for so long as may be considered necessary by the officer authorised under sub-section (I) of section 45 of sub-section (I) of section 48, as the case may be, and allow him to search the vehicle and inspect the goods and all documents referred to in the preceding sub-sections and shall, if so required, give his name and address and the names and addresses of the owner of the vehicle and of the consignor and the consignee of the goods.
(3-A) Notwithstanding anything to the contrary contained in sub-section (2) or sub-section (3), where the owner or the person in-charge of the goods which are carried by a vehicle has entered the above particulars in the notified website and produced the proof of entering the particulars in such website before the officer making search for inspection under this section, in the manner prescribed by the Commissioner, such officer may subject to the provisions contained in sub-section (4) allow the vehicle to pass through.
(4) Where the officer making the search or inspection under this section finds any person transporting or attempting or abetting to transport any goods to which this section applies without being covered by the proper and genuine documents referred to in the preceding subsections and if, for reason to be recorded, he is satisfied after giving such person an opportunity of being heard that such goods were being so transported in an attempt to evade assessment or payment of tax due or likely to be due under this Act, he may order detention of such goods.
(5) The provisions of sub-sections (3), (7), (8), (9) and (10) of section 48 shall mutatis mutandis apply to goods detained under sub-section (4), as they apply to goods seized under that section."
The provision clearly contemplates that any person, who intends to bring, import or otherwise receive into the State from any place outside the State any goods other than the goods described in Schedule-I, is required to make declaration in prescribed form. The Commissioner by virtue of proviso to sub-section (1) has already notified the website at which particulars prescribed to be contained in declaration has to be entered. Sub-section (4) provides where the officer making the search or inspection under this section finds any person transporting or attempting or abetting to transport any goods to which this section applies, without being covered by the proper and genuine documents, the authority concerned may order detention of goods, after recording satisfaction in the matter contemplated, and after affording an opportunity of hearing. The provisions of subsections (3), (7), (8), (9) and (10) of section 48 shall apply to goods detained under sub-section (4). Section 48 contemplates power to seize goods. Sub-sections (3), (7), (8), (9) and (10) of section 48 of the Act reads as under:-
"48. Power to seize goods.- (1) ....
(3) An officer seizing the goods under sub-section (1) shall take all the measures necessary for their safe custody and forward the list, referred to in the proviso to sub-section (1), along with other documents relating to the seizure to the assessing authority concerned.
(7) The officer seizing the goods shall serve on the dealer or, as the case may be, the person in charge an order in writing mentioning the fact of such seizure and indicating the amount, not exceeding such amount as would be sufficient to cover the penalty likely to be imposed, on deposit whereof in cash, the goods so seized may be released in favour of the dealer or, as the case may be, the person in charge:
Provided that the Commissioner or such other officer, not below the rank of a Deputy Commissioner, as may be authorised in this behalf by the Commissioner, may, for sufficient reasons to be recorded in writing, direct that the goods be released without any deposit or on depositing such lesser amount, or furnishing security in such form other than cash or indemnity bond, as he may deem fit:
Provided further that in case of a person, who is not a registered dealer and against whom penalty order referred to in sub-section (7) has been passed, filing of return by such person and assessment of tax on him may not be necessary.
(8) The penalty or such part thereof as remains after adjustment of any amount deposited under sub-section (7) shall be deposited in the prescribed manner within thirty days of the date of service of the copy of the order imposing the penalty. In default, the assessing authority shall cause the goods to be sold in such manner as may be prescribed and apply the sale proceeds thereof towards the penalty imposed, and subject to the provisions of section 40, refund the balance, if any, to the dealer or, as the case may be, to the person-in-charge.
(9) Where the officer seizing the goods, before forwarding the list and other documents referred to in sub-section (3), or the assessing authority at any time thereafter, is of the opinion that the goods are subject to speedy and natural decay or where the tax assessed or penalty imposed, as the case may be, is not deposited in accordance with the provisions of this Act, the officer seizing the goods or the assessing authority, as the case may be, may, without prejudice to any other action that may be taken in accordance with other provisions of this Act, cause the goods to be sold by public auction in the prescribed manner. The sale proceeds of such goods shall be adjusted towards the expenses of tax assessed or penalty imposed. The balance, if any, shall be refunded to the dealer or, as the case may be, the person in-charge in accordance with the provisions of sub-section (8).
(10) If the amount deposited under sub-section (7) is more than the amount of penalty imposed under sub-section (5), the excess amount so deposited shall be refunded to the dealer or, as the case may be, the person in-charge by the authority with whom it was so deposited, in accordance with the provisions of section 40."
Reference, at this stage, may also be had to Section 46 of the Act, which provides for power of search, inspection and seizure, in case of a person other than the dealer. Vide explanation added to Section 46, for the purposes of the section, a transporter or any other carrier or a forwarding agent of goods shall be deemed to carry on activities ancillary or incidental to or in connection with the business of a dealer. The transport vehicle crossing the State has to possess a transit declaration form as well as other documents required to be possessed as per the circular issued by the Commissioner in terms of Section 50 of the Act. The authorities are entitled to verify whether such declaration/documents are available with the vehicle and disclosure made is true, and if it be so, no further scrutiny is warranted. The authorities would be entitled to verify correctness of declarations/documents. For such purposes, the authorities can verify as to whether the goods actually transported are as disclosed in the TDF, and physical verification can be made to ascertain that declaration made is true. The object of enquiry is merely to satisfy that goods declared to be transported are coming from outside the State, and is actually bound to a place beyond the State. If for part of the goods no reference is made in TDF or relevant supporting documents are missing, a rebuttable presumption might arise that such goods are not intended to cross the State, and are likely to be offloaded within the State.
The scope of such enquiry under the provisions of erstwhile U.P. Trade Tax Act was considered by this Court in Madhya Bharat Transport Carrier, Gwalior v. Commissioner of Trade Tax, reported in 2003 UPTC 1218. Sections 28-B and 87 of the U.P. Trade Tax Act regulated passing of goods through State and are reproduced:-
"Section 28-B. Transit of goods by road through the State and issue of authorisation for transit of goods.--When a vehicle coming from any place outside the State and bound for any other place outside the State, and carrying goods referred to in Sub-section (1) of Section 28-A, passes through the State, the driver or other person-in-charge of such vehicle shall obtain in the prescribed manner an authorisation for transit of goods from the officer-in-charge of the first check-post or barrier after his entry into the State and deliver it to the officer-in-charge of the last check-post or barrier before his exit from the State, failing which it shall be presumed that the goods carried thereby have been sold within the State by the owner or person-in-charge of the vehicle :
Provided that where the goods carried by such vehicle are, after their entry into the State, transported outside the State by any other vehicle or conveyance, the onus of proving that goods have actually moved out of the State shall be on the owner or person-in-charge of the vehicle.
Explanation.--In a case where a vehicle owned by a person is hired for transportation of goods by some other person, the hirer of the vehicle shall for the purpose of this section, be deemed to be the owner of the vehicle.
Section 87. The transit of goods by road through the State.--(1) The driver or person-in-charge of a vehicle coming from any place outside the State and bound for any other place outside the State shall present the trip sheet in triplicate to the officer-in-charge of the check-post or barrier, if any, established near the point of entry into the State hereinafter referred to as entry check-post.
(2) The officer-in-charge of the entry check-post shall after examining the document and after making such enquiries as he deems necessary specify on all the copies of the trip sheet the check-post or the barrier (hereinafter referred to as the exit check-post) of the State to be crossed by the vehicle or vessel and the time and date up to which it should be so crossed and deliver two copies of the trip sheet to the driver or person-in-charge of the vehicle retaining one copy himself.
(3) The driver or person-in-charge of the vehicle or vessel shall stop his vehicle at such exit check-post surrender one copy of the trip sheet and allow the officer-in-charge of the check-post to inspect the documents, consignments and goods in order to ensure that the consignments being taken out of the State are the same as mentioned in the trip sheet. The officer-in-charge of the exit check-post shall issue a receipt on the other copy of the trip sheet surrendered by such driver or person-in-charge of the vehicle.
(4) The officer-in-charge of the exit check-post shall have the power to detain, unload and search the contents of the vehicle for the purpose mentioned in Sub-rule (3)."
Paragraphs 8 and 9 of the judgment in Madhya Bharat Transport Carrier, Gwalior (supra) are relevant and thus reproduced:-
"8. On the facts of the present case as stated above, situation to raise presumption of sales of goods inside of the State of U.P. had not arisen. The time for surrender form XXXIV had not expired and inasmuch as, the vehicle was found standing loaded with the goods, the trade tax authority has a jurisdiction to apply the provisions of U.P. Trade Tax Act only in respect of those goods, which are meant for sale inside the State of U.P. In respect of those goods, which are coming from outside the State of U.P. and going through State of U.P., the trade tax authorities can assume jurisdiction to apply the provisions of the U.P. Trade Tax Act only in case, if it is found that form XXXIV, which has been obtained under rule 87 read with section 28-B of the Act has not been surrendered at the exit check-post. No proceeding can be taken under the Trade Tax Act under any provisions of the Act in respect of such goods unless such situation arises.
In my view, for the purpose of Section 28-B, it is wholly irrelevant that consignor or consignee are traceable or non-traceable. Under Section 28-B driver or other person-in-charge or hirer of the vehicle obtains form XXXIV and he has to surrender such form at the exit check-post. Once the goods is booked with the transporter, the transporter becomes the custodian of the goods being a bailee as per the contract between the consignor and transporter and the transporter is required to deliver the goods to the consignee as per the contract. There may be cases where the consignor or consignee are name sake and the goods actually belong to the transporter which it wants to transport for its own purpose and therefore, Legislature was conscious with this situation. The Legislature has put the responsibility on the driver or the person-in-charge or hirer of the vehicle to obtain form XXXIV and to surrender at the exit check-post. In case, if the form XXXIV is not surrendered, it is the transporter against whom the presumption is drawn as contemplated under Section 28-B of the Act and the transporter would be treated as "dealer". It is made clear that transporter may be owner of the vehicle, which includes hirer and person-in-charge and driver represents, owner of vehicle. This situation has also been considered by the honourable Supreme Court in the case of Sodhi Transport Co. case [1986] 62 STC 381 ; 1986 UPTC 721. The honourable Supreme Court observed as follows :
When once a finding is recorded that a person has sold the goods which he had brought inside the State, then he would be a dealer even according to the definition of the word ''dealer'' as it stood from the very commencement of the Act subject to the other conditions prescribed in this behalf being fulfilled. A person who sells goods inside the State of Uttar Pradesh and fulfils the other conditions prescribed in that behalf is a dealer even as per amendments made in 1959, 1961, 1964, 1973 and 1978 to the said definition. There is, therefore, no substance in the contention that a transporter was being made liable for the first time after 1979 with retrospective effect to pay sales tax on a transaction which is not a sale. Tax becomes payable by him only after a finding is recorded that he has sold the goods inside the State though with the help of the presumption which is a rebuttable one."
So far as question of physical verification is concerned, this Court in Madhya Bharat Transport Carrier, Gwalior (supra) took note of Form 34 and the GR, which are referred to therein. It was noticed that there was some difference in the actual goods transported vis-a-vis details mentioned in the bill, but the same was not found relevant, as the transporter was found to have received consignment with reference to the GR and not with reference to actual number of pieces being transported. Paragraphs 11 and 12 of the judgment are also reproduced:-
"11. Now the question is whether on physical verification any difference in goods were found as against the goods mentioned in form XXXIV or GR and on the basis of such difference it can be inferred that the goods do not relate to form XXXIV No. 4135/5309 dated November 23, 2002. At the time of physical verification, the details of the GR number, description of the goods and the goods found on physical verification were mentioned on the papers, which have been signed by the officer concerned and by the transporter which finds place at page Nos. 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96 and 97 of the revision petition. The genuineness of such papers have not been disputed by the learned Standing Counsel. A perusal of the paper shows that no difference in packages and description of the goods were found. The difference was found in number of pieces kept inside the packages, which were opened at the time of physical verification. For example, in GR No. 7719 dated November 22, 2002 ten cartons underwear were disclosed with private marka Nos. 3808 to 3817. In the bill number of pieces disclosed was 4404. On physical verification, ten cartons underwear were found with the private marka Nos. 3807 to 3817 but consisting of 5080 pieces. In the case of GR No. 7703 dated November 22, 2002, the number of packages were six and in the bill quantity mentioned was 3900 pieces. On physical verification, six cartons were found with the same private marka but consisting 3600 pieces. Likewise in all other cases so far as the number of packages and description of the goods are concerned they were found exactly same but the difference in number of pieces were found. It is pertinent to state at this stage that in GR only number of packages are mentioned and not the pieces. In form XXXIV also number of packages are only mentioned and not the pieces. The pieces are only found mentioned in the bill. Learned counsel for the applicant contended that form XXXIV was issued with reference to the GR and only number of packages are mentioned in form XXXIV and therefore, what was required to be verified was the number of packages. He submitted that the transporter has no control on the consignor and it is wholly impossible and impracticable to open each and every package and verify the number of pieces inside the packages at the time of booking. He further submitted that verification should be made with reference to the packages, which is mentioned in form XXXIV and not with reference to number of pieces contained inside the packages and if the authority wants to verify the goods with reference to the number of pieces, such verification should also be made at the entry check-post while issuing form XXXIV and if form XXXIV was issued with reference to the packages and not with reference to the pieces, the verification should only be made with reference to the packages and not with reference to the pieces.
In my view, since on verification same number of packages and same description of goods were found on physical verification as mentioned in GR''s and in form XXXIV, it cannot be said that the goods were not relating to form XXXIV No. 4135/5309 dated November 23, 2002. At the exit check-post, necessary verification should be made only with reference to the details of the goods mentioned in form XXXIV. The details, which are not mentioned in form XXXIV should not be considered at the exit checkpost. If in form XXXIV, number of pieces are not mentioned and only number of packages are mentioned, the verification of number of packages should be made at the exit check-post and not the number of pieces. If the officer of exit check-post can verify the goods with reference to the goods mentioned in form XXXIV only, the officer of the Mobile Squad, who propose to check goods can also verify only with reference to the disclosed goods mentioned in form XXXIV and they cannot travel beyond that. In case if in respect of a particular goods or particular transaction, the officer feels that there may be possibility for opening of packages and change in number of pieces, in transit, it is always open to the officer concerned at entry check-post to take necessary care in this regard, and either put a seal or signature on the packages to overrule the possibility of it being opened, or to make the verification even of the contents of the packages and made the mention in form XXXIV itself to overrule the possibility of any presumption and to give liberty to any officer to exercise any kind of discretion."
A Division Bench of this Court in M/s. Saiya Transport Pvt. Ltd. v. State of U.P. And others, reported in 2006 UPTC 967, again interpreted the judgment of this Court in Madhya Bharat Transport Carrier, Gwalior (supra). Detention of goods on the ground of source and origin of goods and the addresses and registration of consignor and consignee were not approved. Paragraph 4 of the judgment is reproduced:-
"4. The officers of the respondent department in this case appear to have been over enthusiastic in performance of their duties and have detained the goods of the petitioner on the irrelevant reasons about the source and origin of the goods and the addresses and registration of the cosigner and consignee."
Similar view was reiterated in Commissioner, Trade Tax, U.P. Lucknow v. Vikram Tewari, Karol Bagh, Delhi, reported in 2007 NTN (Vol.33) 376. Following observations made therein are reproduced:-
"However, before parting with the case, let us consider a situation that if the driver had obtained transit pass at the entry check post in respect of the goods loaded in the vehicle having an intention to deliver/sell the goods inside the State of U.P. on the garb of the transit pass, be can adopt such situation at the risk of the levy of tax and penalty in case of non-surrender of the transit pass. No owner of the vehicle or transporter can afford to invite the liability of tax and the penalty which is quite substantial by selling the goods inside the State of U.P. and non-surrendering the transit pass at the exit check post. The driver of the transport company can only adopt such a situation when he has hope to get the such transit pass endorsed at the exit check post by collusion/manipulation in the absence of goods. Thus, need is to tighten the departmental machinery at the level of the check post to avoid the collusion/manipulation at the check post. It came to the notice of the Court in some of the cases where penalty under Section 15-A(1) (o) of the Act has been levied and the tax has been assessed on the ground that the transit pass/Form 34 have been got passed by collusion and manipulation with the check post officers and staff and despite the enquiry being ordered, no serious action has been taken. I f the officer sitting at the top would not be able to take proper step to check the manipulation and in case of detection of such manipulation, serious action would not be taken the process of evasion would continue and for the departmental officers are only be held responsible and non-else."
In New Indore Delhi Road Lines v. Commissioner of Commercial Tax, U.P. Lucknow, reported in 2012 NTN (Vol.49) 19, this Court again considered the scope of enquiry by the VAT Authorities, in respect of goods being transported from outside the State, en-route a destination beyond the State. Following observations are made in respect of seizure of goods in transit:-
"It may be relevant to note that seizure of the goods in transit through U.P. Can be made only on the grounds mentioned under section 48 of the Act and the presumption that the goods are meant for sale in U.P. would only be available when they are not accompanied by the requisite documents, i.e. bills and bilties and the transit declaration form.
It is not the case of the department that the goods were not accompanied by the relevant bills, bilties and transit declaration form. It is not even the case that the good have entered from the wrong place or were likely to be taken out from a different place or was not following the disclosed route as contained in the transit declaration form. There is no whisper that toe goods have over stayed in U.P., which may be a reason for the authorities to believe that they were meant for sale in U.P.
The object of providing safeguards or the Transit Declaration Form in connection with the goods in transit through the State of U.P., is to ensure that the goods which enter the State passes out of U.P., and are not sold inside so as to evade payment of tax.
In the light of the above purpose, the existence of the selling and purchasing dealers or their non registration in their respective States would not be a material and a valid ground for seizing the goods.
xxxxx xxxxx xxxxx
Admittedly, in the present case the goods were seized immediately on their entry in the State of U.P. without allowing the time for its exit to expire. In such situation, it is wrong to presume that the goods have been retained for the purposes of sale. Apart form the above, as the goods were duly accompanied by the requisite documents, no presumption arises under law that they were likely to be sold within the State of U.P."
In Seema Enterprises, Canal Avenue, Behind Bus Stand, Bargarh (Orissa) v. Commissioner, Commercial Tax, U.P. Lucknow, reported in 2013 NTN (Vol.52) 237, this Court again examined provisions of the Act as well as scope of enquiry by the authorities regarding goods transported through the State. This Court observed that any discrepancy in respect of an earlier transaction would not be relevant, in following words:-
"Section 48 of the Act gives power to the officer to seize the goods found in the vehicle in case if the goods are not traceable to bona fide dealer and is doubtful that they are accounted for in books of account, register or documents.
In my view each and every transaction has to be examined independently on its own merit and past conduct is wholly irrelevant."
After taking note of the earlier judgments, the enquiry system contemplated under the VAT Act was noticed in following words:-
"Now under Section 52 of the Act read with Rule 48 of the Rules and circular there is a provision for obtaining the Transit Declaration Form by downloading the details of the goods in the departmental website but no mechanism is provides for the surrender of the said transit declaration form. It is very ridiculous. The check posts have been abolished and now the officials sitting in the mobile squad checks the vehicles in route. Everything has been left open on the discretion and the whims of the commercial tax officers of the mobile squad. They have been allowed to act as uncrowned king to operate in any manner in which they may like. It is open to the Mobile Squad to check the vehicle or not and even allow the vehicle to go unnoticed with the unethical understanding and collusion between the transporter/trader and Commercial Tax authorities or for any other reason. There is no mechanism provided under the Act and Rules to verify after the issue of Transit Declaration Form as to whether the goods had crossed the State or not. In such situation, after the issue of Transit Declaration Form, it would be difficult to raise presumption that the goods have been sold inside the State except in cases where the driver is caught unloading the goods inside the State.
In my opinion, this mechanism has left the scope of large scale tax evasion and the scope of corrupt practices.
In view of the above, I direct the Principal Secretary, Financial Institutions to look into the matter and review the mechanism provided under the Act and take steps to provide such mechanism to check evasion and corrupt practices and may think to revive the earlier provision as was available under the U.P. Trade Tax Act."
Commissioner, Commercial Tax U.P. has, in furtherance of such observations issued the circular dated 3.9.2013, which is already extracted in this order.
Importance of transit declaration form as well as truthfulness of declarations made therein were again highlighted in Bright Road Logistic Cargo Company v. Commissioner, Commercial Taxes, Lucknow, reported in 2016 NTN (Vol.61) 309, in following words:-
"In this case, the Transit Declaration Form has not been found to be wanting in any respect. It was also within the validity period. Such being a case, it is open to the department to trail the goods up to the boundaries of the State. The goods seized however, may be released without payment of any security. The goods may be trailed right to the border of the State of U.P. to ensure that no escapement of tax is made within the State of U.P."
The Tribunal, in the facts of the present case, has however relied upon a recent decision of this Court in The Commissioner, Commercial Tax, U.P. Lucknow v. S/S. Bihar Carrying Corporation, dated 11.1.2017, delivered in Sales/Trade Tax Revision No.456 of 2016. In Bihar Carrying Corporation (supra), an order of Tribunal was under challenge at the instance of State in so far as release of goods was allowed, without any security. The provisions of the Act and Rules were noticed, and following questions were framed for consideration:-
"(i) Whether under the facts and circumstances of the case, seizure of goods and demand of cash security for its release under Section 48 of the U.P. VAT Act, 2008 is valid?
(ii) Whether Delhi - U.P. Border area of District Ghaziabad is "no-man''s land"?
(iii) Whether transporters are strangers to the transaction of sale and purchase and totally ignorant about the consignors and consignees?
(iv) Whether fraudulent transportation of goods and colourable devices used to give impression of transportation of goods from outside the State of U.P. to outside the State of U.P. shall fall under Section 52 or would be a case falling under Section 48 of the U.P. VAT Act, 2008?"
Facts of the case were noticed in para-13 of the judgment in following words:-
"13. Thus, these facts clearly indicate conscious indulgence of the respondents in clandestine and fraudulent transportation of the goods in question from Ghaziabad (U.P.), suppressing and misrepresenting the identity of real owner of the goods and place of origination for transportation. When in truth, invoices are bogus, TIN numbers mentioned therein are fictitious, consignors as shown in the invoices and bilties, are non-existent, identity of consignees has been suppressed by not giving their full address and goods really originated for transportation from Ghaziabad (U.P.), then it leads to irresistible conclusion that CST/ VAT shown in the invoices is not real but deceitful act of undisclosed nonbonafide dealer to evade tax under the Act."
In view of such findings, seizure of goods was held valid. After considering the relevant circulars, this Court while answering question no.2 rejected the contention that Delhi-U.P. Border Area of District Ghaziabad is a ''no man''s land''. It was in the aforesaid factual background that question no.3 was answered in following words:-
"22. In view of the above, it cannot be said that transporters are strangers to the transaction of purchases and sales and totally ignorant about the consignors and consignees. In cases like the present case where transactions have been fictitiously carried on in false names and addresses, bogus invoices with fictitious TIN numbers printed therein and TDF-1 is downloaded on the basis of false particulars and forged papers by a transporter then he makes himself party to the episode of fictitious transaction with sole purpose of evasion of tax by undisclosed non-bona fide dealers. By seizure of goods in such cases transporter is not affected if he is really a transporter. Therefore, instead of being torch bearer of dishonest persons, he should allow the real consignors or consignees to come forward and assign reasons for concealing their real identity. The action of the departmental authorities in such cases to unearth evasion of tax is one of their fundamental duties under the Act.
Question No. (iv) Whether fraudulent transportation of goods and colourable devices used to give impression of transportation of goods from outside the State of U.P. to outside the State of U.P. shall fall under Section 52 or would be a case falling under Section 48 of the U.P. VAT Act, 2008?"
Question no.4, noticed above, was then answered in following words in paragraph 29:-
"29. Facts of the present case as noted above, leave no manner of doubt that the alleged invoices accompanying the goods are fake, the TIN numbers printed therein are fictitious, the alleged consignors are nonexistent, the goods originated for transportation from Ghaziabad (U.P.), C.S.T. or VAT shown in the invoices is not real but a deceitful act of undisclosed non-bona fide dealer and identity of real owners of the goods (consignors/ consignees) have been suppressed by the respondents with the only motive to evade tax under the Act or to help undisclosed persons/ non-bona fide dealers to evade tax. It is a clear case of fraud, misrepresentation and suppression of facts by the respondents. This court cannot act to protect perpetuation of legal fraud. The courts are obliged to do justice. Fraud and justice never dwell together (Frans Et Jus Nunquam Cohabitant). This maxim has never lost its temper over all the centuries. The courts are not meant to permit dishonesty even on technical pleas. Dishonesty cannot be permitted to bear the fruit and benefit to the persons who played fraud or misrepresented or suppressed facts and in such circumstances, the court should not allow perpetuation of fraud by entertaining the technical pleas. The very foundation of the case of the respondent is based on falsehood and fraud. The respondents have suppressed material facts and did not disclose it despite being repeatedly asked by the Mobile Squad Authority. Even despite order of this court they declined to file affidavit to bring on record full particulars of consignors and consignees and genuineness of transactions and invoices. They have not disclosed the real person/ owner of the goods in question. Wrong has been clearly committed and, therefore, the respondents cannot be allowed to take advantage of their own wrong on the basis of technical pleas so as to frustrate the law. Once a transportation of goods under the cover of Section 52 of the Act is shown to be fraudulent, sham, bogus, circuitous or a device designed to evade tax under the Act, the statutory authorities under the Act and the court can always examine the substance of the transaction because the legislature never intends to guard fraud. No authority or court may recognise such transportation or transaction on the basis of the provisions of Section 52 of the Act. Law is manifestation of principles of justice, equity and good conscience. Hence section 52 of the Act cannot be interpreted and understood in a manner so as to encourage tax evaders and to discourage those who abide by law. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges. No doubt, when a person transports goods from outside the State of U.P. to outside the State of U.P. in terms of Section 52 of the Act and Rule 58 of the Rules, the authorities under the Act have no power to seize the goods and demand security for release thereof but where, as in the present case, the transaction is sham, not genuine and make-believe and originated from a place within the State of U.P. or intended to be sold within the State of U.P. with intent to evade tax then it would be a case falling under Section 48 of the Act. Provisions of Sections 48 & 52 of the Act, have to be considered in a manner so as to hold that it serves to seek a reasonable result. Protection of Section 52 of the Act cannot be extended for evasion of tax under the Act, to perpetuate fraud or to do something indirectly which cannot be done directly."
The questions formulated and answered in Bihar Carrying Corporation (supra) were in the factual backdrop of the case in question, and the observations made therein would have to be construed in light of the facts of the case. It is settled that if the goods are found not to have originated from a place beyond the State of U.P., Section 52 apparently would have no applicability, and the defense of possessing TDF would otherwise not be available.
In Bihar Carrying Corporation (supra), while dealing with question no.3 i.e. ignorance about consignor and consignee, reliance was placed upon a decision of the Apex Court in A.B.C. (India) Ltd. v. State of Assam and another (2005) 6 SCC 424. Para 22 of the judgment has been relied upon, which reads as under:-
"22. In our view, transporters are not strangers to the sale or purchase of goods, to the contrary are part and parcel and are directly involved in storing the goods purchased or sold by dealers, and in many cases such transactions are fictitiously carried on in false names and addresses besides false classifications vis-a-vis transportation of such goods in and outside the State making themselves party to the episode of such fictitious transactions for the sole purpose of evasion of tax by the dealers purchasing and selling such goods."
Reliance is also placed upon a Division Bench in Gill Sandhu Haryana Transport Co. v. State of Rajasthan, (1991) 10 RT JS 335. Learned counsel submits that Division Bench judgment of Rajasthan High Court purtained to proceedings initiated under the Rajasthan Value Added Tax Act, 2003. Attention of the Court is invited to Section 76 (2)(d) and Explanation 12 to submit that under the Rajasthan enactment, there existed a specific requirement of furnishing details of consignor and consignee by the transporter and failure to do so would result in a presumption that goods have been sold in State of Rajasthan.
The observation made in Bihar Carrying Corporation (supra) cannot be construed as laying down a blanket proposition that authorities under the Act would be entitled in every case to insist upon verifying genuineness of consignor or consignee, and to raise a presumption in its absence that goods are to be sold within the State. The observation in Bihar Carrying Corporation (supra) were based upon the facts of the case, wherein the entire transaction was found to be fraudulent. If the declaration/documents supporting transport of goods are found bogus/fraudulent, the authorities would be justified in examining identity of consignor and consignee to ascertain as to whether goods transported would cross the State or would be offloaded in State without paying tax. Tribunal was not justified in disbelieving assessee''s case, merely because details of consignor and consignee were not correctly furnished. Jurisdiction of State Authorities under the Act is only to verify as to whether goods in transit are actually passing through the State, or under garb of it, are to be sold within the State, without paying tax due. The authorities possess jurisdiction to investigate movement of goods through State only to the extent permitted in law, failing which their action would be open to challenge on the ground that it impedes freedom of trade, commerce and intercourse within the territory of India, as are enshrined in Part XIII of the Constitution of India.
What is permissible to enquire is that the required declaration exists in terms of circular issued under Section 52 and disclosures therein are correct or not? If the declaration made in TDF is correct with reference to the goods transported, and matches with the bill/bilty etc., required as per circular, the authorities would not be justified in proceeding any further or to probe identity of consignor and consignee etc.
When goods for transportation are booked through transporter, it would proceed on the basis of information furnished by the consignor, and while transporting goods, it is not expected to investigate identity of consignor or consignee beyond what is disclosed to it. The only safeguard expected of transporter would be to check that the consignment is booked with bill/bilty/invoice and are correctly filled in the TDF. The circular also specifies particulars to be possessed with the vehicle and the transporter can be expected to verify such details. The vehicle carrying goods from outside the State to a location beyond the State would, therefore, ordinarily not be detained, merely due to alleged error in specifying details of consignor or consignee, if TDF is otherwise possessed along with documents required as per circular. It is only when details mentioned in TDF with reference to goods transported, route specification or time etc. are found incorrect or documents required to be possessed are either not available or bogus/wrong that the authorities may incidentally examine particulars of consignor and consignee to form an opinion that goods were intended to be sold within the State of U.P. The circular issued by the State otherwise takes notice of transport of goods by an unregistered dealer also. Clause 9 of circular requires particulars of consignor and consignee along with its tin number, for three transactions of highest value, and in case consignee is unregistered then in place of tin number, he has to fill 09 followed with nine zeros.
In view of the discussions made, I am of the considered opinion that details of consignor and consignee need not be investigated, at the first instance, if the description of goods mentioned in TDF as well as other details are found correct, nor the authorities would not be justified in detaining or seizing goods merely for the reason that consignor and consignee details are allegedly incorrect. However, where declaration/documents supporting transport of goods are found bogus/fraudulant etc., the authorities may examine details of consignor and consignee with an intent to ascertain whether goods are intended to pass through State or not.
Coming to the facts of the present case, it is to be found that the description of goods mentioned in TDF was found to be at variance with the goods actually transported. Under the circular, authorities have jurisdiction to make physical verification. The authorities have detained only such goods, which are found to be in excess of what was disclosed in the TDF. The valuation of goods transported was also found wrong. To that extent, goods transported are found to be at variance with the declaration made in TDF and the authorities would clearly be justified in detaining goods so as to proceed lawfully against it. Although, it is settled that service of notice has to be in accordance with the Rules of 1972, but on facts, it is found that notices were served upon transporter by the registered post as well. In view of the finding that letters have been sent by registered post on 30th November, 2016, and 10th December, 2016, the argument that proceedings drawn were violative of principles of natural justice cannot be sustained. The facts that goods were detained were otherwise within the knowledge of the transporter, and no application was moved for release of vehicle. It is only on 6th March, 2017 that the transporter has made an application to release the vehicle and the goods transported as per TDF were released along with vehicle, on the very next day. The argument of the counsel that vehicle has been illegally detained for more than three months by the authorities, therefore, cannot be accepted.
The order of seizure of goods, therefore, in so far as it is not backed by disclosure made in TDF is upheld. In the facts and circumstances of the present case, it would be appropriate to modify the order of Tribunal, dated 3.3.2017, and to permit release of goods upon depositing 15% of the value of goods, and furnishing of indemnity bond for the balance 85% amount, subject to appropriate proceedings, which may be drawn, in accordance with law.
With the aforesaid observations/directions, the revision stands disposed of.