TMI Blog2010 (4) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... D. V. SHYLENDRA KUMAR J.-This is a revision petition by the Revenue under section 23(1) read with section 8A of the Karnataka Sales Tax Act, 1957 (for short, the Act ), directed against the order dated April 10, 2008 passed by the Karnataka Appellate Tribunal, Bangalore in S.T.A. No 2285 of 2004, whereunder the Tribunal had allowed the appeal of the respondent-assessee, an appeal filed under section 22 of the Act, which in turn was directed against the order dated August 7, 2004 passed by the first appellate authority, Deputy Commissioner of Commercial Taxes (Appeals and Audit), Mangalore, in Appeal No. KST/AP 6/04-05. The first appeal itself was directed against an order dated April 22, 2004, passed by the\ Commercial Tax Officer, Sales Tax Check-post, Mukka, Mangalore, calling upon the respondent-owner of the vehicle-cum-oil tanker bearing registration No. KA 19 A-4060 to pay a sum of Rs. 24,523 representing the tax liability on 12 kiloliter of superior kerosene oil of the value of 1,63,488, in respect of which the check-post authorities had issued transit pass No. 0107642 dated June 25, 2003 and which transit pass had not been surrendered by the person in-charge of the vehi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal sale and attracting single point tax on such sale at the rate of 16 per cent on the value of the goods and if so, the Commercial Tax Officer, Sales Tax Checkpost, Mukka, Mangalore, instead of taxing and mulcting the owner of the goods career with tax liability and penalty, by reopening the concluded assessment of the consignor invoking section 12A of the Act, should have explored the position as it prevails in law, when a goods subjected to a single point levy of sales tax within the State is sold again within the State for the second time, as an intra-State sale, in which event, the tax liability is nil, as it will be a second sale within the State and, therefore, there was no need to either levy the tax or penalty on the owner of the goods career and if the goods is deemed to have been sold within the State of Karnataka in favour of the respondent, by the owner of the goods career, it will have to be presumed that by not producing the transit pass, it is not the owner of the vehicle who has sold kerosene oil within the State of Karnataka and even if such a presumption is invoked, the owner will not be liable to tax, for the reason that the sale by the owner of the goods caree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter remanded to the Check-post Officer to dispose off the matter in view of the Explanation to section 28AA? and the following additional question of law permitted to be raised as per our order dated October 28, 2009: Whether, on the facts and in circumstances of the case, can it be held that the Appellate Tribunal was right in law in holding that the respondent was a second dealer in superior kerosene and hence entitled for exemption from payment of tax? The revision petitioner-Revenue has contended that the order passed by the Tribunal is not only illegal, but virtually without jurisdiction; that the Tribunal has grossly erred in surmising that the tax liability should be fastened on the consignor, M/s. AVR Overseas Pvt Ltd., and therefore should not be assessed in the hands of the owner of the goods vehicle; that the notification dated March 30, 2002, with reference to section 6B of the Act, would not absolve the respondent from any liability towards payment of tax under the Act; that the Tribunal has committed an error in purporting to apply and follow the decisions of the Supreme Court in the case of Sodhi Transport Co. v. State of U.P. [1986] 62 STC 381 and State of P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal by the first appellate authority, should be restored by allowing this revision petition. On the other hand, Ms. Vani H, learned counsel for the respondentowner of the vehicle in question, has drawn our attention to the provisions of sub-section (1) of section 28AA of the Act and also the provisions of rule 23F of the Karnataka Sales Tax Rules, 1957 (for short, the Rules ), governing the procedure to be followed by a person in charge of a goods vehicle carrying goods which are in transit and passing through the State of Karnataka as part of the inter-State transaction, particularly to the provisions of sub-rule (2) of rule 23F, which reads as under: 23F. The transit of goods by road through the State and issue of transit pass.-(1) . . . (2) The officer-in-charge of the entry check-post or such officer empowered shall, after examining the document and after making such enquiries as he deems necessary issue a pass on the duplicate and triplicate copies of the application, retaining the original himself. The pass shall specify the check-post or the barrier (hereinafter referred to as the exit check-post) of the State to be crossed by the vehicle if any established, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that transit pass could not be surrendered by the transporter, as, according to the transporter, the transit pass, even if it had been issued, had been collected by a representative of the consignor who was accompanying the goods, levying sales tax on the transporter under sub-section (4) of section 28AA of the Act and further levy of penalty under sub-section (5) is totally unwarranted and is illegal and therefore submits that the Tribunal has rightly interfered with the matter and urges for dismissal of the revision petition. Ms. Vani also draws our attention to the provisions of sub-section (4) of section 28AA of the Act and submits that the presumption in this proviso does not arise against the respondent-owner of goods career, particularly for subjecting the owner of the vehicle to tax and penalty only for the reason of non-production of transit pass and submits that for this reason also, the revision petition is to be dismissed. The learned counsel for the respondent would also submit that the reasoning of the Tribunal to allow the appeal before it by following the decision of the Supreme Court in the case of Mulakh Raj Nand Lal [1982] 50 STC 101 is apt, justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities at Silvassa to indicate that the consignee had duly accounted for the receipt of superior kerosene oil worth Rs 1,63,488. On November 5, 2003, there was an inspection at the consignee's premises and it was noticed that the consignee had not filed its returns till November 5, 2003 and a further information thereafter indicated that there was no person carrying any transactions in superior kerosene oil at the address and no name board was exhibited at the place. The Commercial Tax Officer, Sales Tax Check-post, Mukka, Mangalore, thereafter, has given an endorsement to the respondent to the effect that the confirmation letter filed by the respondent about the goods having been delivered at the consignee's place and the consignee having received it, is not an acceptable piece of evidence and as a follow-up action, indicated that there was no person by the name of consignee carrying on business at the address furnished by the respondent. It was thereafter, the Commercial Tax Officer, Sales Tax Check-post, Mukka, Mangalore passed an order on April 22, 2004 levying tax and imposing penalty. In this state of facts, it is very obvious that there is failure of the mandatory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not comply with sub-section (2), it shall be presumed that the goods carried thereby have been sold within the State by the owner of the vehicle and shall, notwithstanding anything contained in sub-section (5) of section 5, be assessed to tax by the officer empowered in this behalf in the prescribed manner. (5) If the owner of the vehicle having obtained the transit pass as provided under sub-section (1), fails to deliver the same as provided under sub-section (2), he shall be liable to pay by way of penalty a sum not exceeding double the amount of tax leviable on the goods transported. (6) The amount of tax and the penalty levied under this section shall be recovered in the prescribed manner. (7) Where the owner of the vehicle who is assessed to tax under sub-section (4), is carrying after such assessment, any goods taxable under this Act in a goods vehicle from any place outside the State or movement from within the State, as the case may be and bound for any other place outside the State and is passing, through the State, the prescribed authority may demand from such owner an amount equivalent to two times the tax leviable on such goods under this Act as security. (8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds into the State, for meeting the liabilities incurred in terms of subsections (4) and (5) of section 28AA of the Act. Even after a thorough examination of the records and a detailed consideration of submissions made at the Bar, we have not found any material to support the versions of the respondent-owner of the vehicle that either the goods have been actually delivered at the place of the consignee or to say that the very goods in fact have been moved out of the State and in a different vehicle. No material was placed before the authorities and the lower appellate authority to substantiate a justification for extension of time to surrender the transit pass, but more importantly, even after extension of time for surrendering the transit pass, it has got to be surrendered and a nonsurrender inevitably attracts the consequence of sub-sections (4) and (5) of section 28AA of the Act. A flimsy excuse on the part of the respondent-transporter that a representative of the consignee/consignor had collected the transit pass and that can be either verified or collected from the said representative, is neither here nor there and at any rate does not relieve the owner of the goods v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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