TMI Blog2014 (11) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... o be held is depracated. There is nothing on record in support of conclusion drawn by the authority concerned that the documents produced were prepared by the same person. Mere self styled observations without anything more on record, it cannot be said that documents produced were false and forged. Therefore, the decision of concerned authority regarding imposition of penalty is wholly arbitrary and unsustainable in the eyes of law. Moreover, mere presumption that both documents are written by same person by itself do not tantamount that documents so produced were false or forged. Such slip showed consequences on the part of concerned authority, speaks volumes about vindictiveness in the matter of exercise of powers entailing penal consequences. Seeking release of tanker and amount of ₹ 1,68,679/- with interest deposited by the petitioner under coercion - Ownership of consignee - whether the goods dispatched by the petitioner/consignor while in transit, can be said to be the goods of the ownership of the consignee - Held that:- the question whether a contract for the sale of goods does or does not pass the property in the goods from the buyer to the seller must in all case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r transportation and delivery of edible oil (mustered oil) to M/s Jai Durga Oil Industries, Deenapur, Bhind (M.P.) (Consignee) on the basis of oral agreement to sale had loaded the same in Tanker No. UP-83 T 2915 of the ownership of Maa Bhagwati Roadlines, Transport Nagar, Agra on 22/7/2014. The aforesaid goods were having a weight of 140.50 qtl valued at ₹ 9,30,110/-. The sale bill as well as bilty based thereupon were also prepared and were with the driver of the vehicle while the tanker was dispatched from Sabalgarh for Deenapur on 22/7/2014. On the way at Jora-Morena Road, respondent No. 3 stopped the tanker. On being asked, the driver has submitted that following documents:- (1) Bill NO. 102/22-07-2014 of M/s Hariom Floor and Oil Mill, Sabalgarhy for ₹ 9,30,110/- in favour of M/s Jai Durga Oil Industries , Deenapura, Bhind Affixing rubber stamp Local Good for Sabalgarh. Entry Tax not paid. (2) GR No. 111 dated 22-07-2014 Sabalgarh to Bhind of Maa Bhagwati Roadlines, Transport Nagar, Agra containing Mustered Oil-140.50 qtl. To pay freight ₹ 7,000/- by Tanker No. UP-83 T 2915 consignor M/s Hariom Floor and Oil Mill, Sabalgarh and Consignee M/s Jai Durga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sub-section (1); (c) furnish all the documents including prescribed declaration forms relating to the goods before the check post officer; (d) give all the information relating to the goods; and (e) all the inspection of the goods by the check post officer or any other person authorised by the check post officer; provided that the documents including prescribed declaration forms shall be required to be carried and/or furnished only in respect of the goods as may be notified by the State Government. Provided further that if the transporter transporting goods by a road on which check post or barrier is not established, furnishes the documents including declaration form specified in clause (a) at the nearest Commercial Tax Office, immediately after entry into the State of Madhya Pradesh or before exit from the State, he shall be deemed to have complied with the requirement made under clause (b). (3) xxxx xxxx (4) xxxx xxxx (5) Where any goods are in movement within the territory of the State of Madhya Pradesh, any officer, not below the rank of an Assistant Commercial Officer, as may be authorised by the Commissioner, may for the purposes of this Act, stop t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty has been imposed under sub-section (8), may opt to pay in lieu of penalty a lump sum amount, which shall be (three times) the amount of tax referred to in sub- section (8) and once the transporter has exercised the option he shall not have any right to challenge the order of penalty in any forum. Explanation:- (i) Vehicle or carrier means:xxxx (ii) Transporter shall include the owner of the vehicle carrying the goods, whether an individual, a firm, association, society or company, and the manager, if any, of such owner; Aforesaid provisions provide for a detailed procedure to be followed for inspection of goods while in movement and imposition of penalty in the event of evasion of tax. As such, in fact and in effect, provisions contained therein besides being part of fiscal statute, also contained mandate of penal consequences. As such provisions are required to be given strict literal interpretation unless the context otherwise required. The provisions quoted hereinabove prescribe:- (i) that the driver or the person, in charge of vehicle shall carry with him an invoice, bill or challan or any other document and prescribed declaration forms issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ped for checking by the concerned officer. It is submitted that the concerned officer neither issued any notice to the transporter or to the petitioner and contrary to the procedure prescribed in Section 57 of VAT, passed the order of penalty. That apart neither any enquiry was held nor documents found to be forged and false were verified. On mere surmises and conjectures conclusions were drawn prejudicial and detrimental to the interest and right of the transporter and the petitioner. Petitioner on being informed by driver, had rushed the place where he was forced to deposit an amount of ₹ 1,68,679/- on 26/7/2014. Even then, the vehicle was not released and same was attached on 31/7/2014. Such circumstances led him to file this petition. It is further contended that apart from the fact that concerned authority has done violence with the statutory provisions contained in various sub-sections of Section 57 of VAT relating to procedure prescribed for imposition of penalty, has in fact and in effect abdicated his authority in the matter of imposition of penalty as cyclostyled printed orders with fill in the blanks have been passed having penal consequences. Learned counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). One fails to understand how learned CTO without holding any inquiry these documents produced by assessee/driver of the vehicle at the time of checking, the invoice of prior date could not per se be treated as non- genuine or forged document. This Court summoned the record of the case and perused the original record. The documents including the declaration issued by the Sales Tax Authorities of both the states clearly establish that transit and transaction was perfectly genuine and there was absolutely no reason fro the Assessing Authority to just go by fidget of his imagination that merely because the invoice bears the date prior in point of time, such document should be held to be non-genuine so as to attract heavy penalty of 30% of the value of goods under Sec. 78(5) of the Act. Such flimsy and unjustified stand on the part of authorities of sales tax department seriously impede and jeopardize the free flow of trade in the country which is the constitutional guarantee under Article 19(1)(d) of the Constitution of India. The course left open to the assessee after imposition of such illegal penalties is nothing but to approach the higher appellate forums and more often than not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced appear to be false or forged as contained in sub-section (8) of Section 57 of VAT, make the transporter liable for penalty to the extent of maximum 5 times of the amount of tax payment on goods. 12. According to Black's Law Dictionary (6th Edn.), the word 'alse' has two distinct well-recognised meanings: (I) intentionally or knowingly or negligently untrue; (2) untrue by mistake or accident, or honestly after the exercise of reasonable care. A thing is called 'false' when it is done, or made, with knowledge, actual or constructive, that it is untrue or illegal, or is said to be done falsely when the meaning is that the party is in fault for its error. 13. Hon. Supreme Court in the matter of Commissioner of Sales Tax, Uttar Pradesh vs. Sanjiv Fabrics, (2010) 9 SCC 630 had held that while examining whether mens rea is an essential element of an offence created under a taxing statute, regard must be had to the following factors:- (i) the object and scheme of the statute; (ii) the language of the section; and (iii) the nature of penalty. 14. VAT is a piece of fiscal legislation for imposition of tax, a compulsory exaction of money with no cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The aforesaid requirements are mandatory in nature to establish the allegations related to submission of false or forged documents in relation to goods in movement. Neither, the notices to the transporter nor satisfaction to be recorded after due enquiry as contemplated under sub-section (8) can be said to be a empty formality which can be waived by the concerned authority by issuing an order in a cyclostyle format mechanically. The concerned authority is obliged to issue notice to the transporter for making a representation to produce documents and lead evidence so that he may avail the opportunity to put forth his submission and produce oral and documentary evidence to assert that documents in relation to goods in movement were not false and forged. These twin requirements flowing from the aforesaid provisions are sine qua non of principles of natural justice, as well. 16. The enquiry as contemplated under Section 57(8) of VAT is an enquiry of a serious nature and not a empty formality. The concerned authority has to apply its mind to the evidence brought on record during the course of enquiry by the transporter and thereafter upon critical evaluation of the same, the authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is nothing on record that reasons were recorded by the concerned authority under Section 57(6) of VAT that documents produced were false or forged. Both notice dated 26/7/2014 and order dated 26/7/2014 bore the reason for passing of penalty order to the following effect:- 19. The penalty order (Annexure R/8) is a cyclostyle form with fill in gapes. There is no record of enquiry produced or referred to in the counter affidavit in the context of aforesaid decision. It appears that aforesaid part in the impugned order is extracted from the so called statement of driver allegedly recorded on 22/7/2014. 20. In view of the aforesaid facts and circumstances, this Court is of the considered opinion that concerned authority has acted in an arbitrary manner and in fact abdicated its authority in the matter of passing of order of penalty without enquiry and without adhering to the procedure as contemplated under Section 57(8) of the VAT. It is shocking to note that order imposing penalty has been passed in a printed format by showing the amount of penalty which at no stretch of imagination can be said to be an order required to be passed under Section 57(8) of the VAT. This C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the seller to the buyer, the contract is a sale'. The question whether a contract for the sale of goods does or does not pass the property in the goods from the buyer to the seller must in all cases be determined by the intention of parties to the contract, nature of transactions and terms and conditions of contract. Sale of Goods Act under various chapters and provisions contained thereunder deals with different situations to answer the aforesaid question, and therefore, by figment of thought to ascertain the ownership of goods which is involved in the realm of business transaction shall always be a dangerous phenomenon. Mere dispatch of goods by the seller therefore cannot lead one to form the opinion that the buyer has become owner of the goods as has been done in the instant case. This notion formed by the concerned authority suffers from misconception, lacking common sense and de hors the provisions of Sale of Goods Act. Therefore, in the opinion of this Court, the goods in transit in absence of any evidence as regards terms and conditions of sale for dispatch of the goods, cannot be said to be of the ownership of the consignee. Hence, the attachment of the tanker for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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