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M/s. Tata Motors Limited Versus The Commissioner, Commercial Taxes, U.P. Lucknow

2016 (9) TMI 611 - ALLAHABAD HIGH COURT

Levy of tax - Section 28-B of the U.P. Trade Tax Act, 1948 - imposition of penalty - Section 15A(1)(g) of the 1948 Act - sale of vehicle on hire-purchase - Form - 34 - whether the rebuttable presumption which stood raised under Section 28-B stood discharged or not? - Held that: - Under a rule of rebuttable presumption all that a person is obliged to do is to establish by way of evidence that the real fact is not as presumed. The respondents had before them not just the invoices of sale executed .....

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harged. - Whether Naseem Ahmad is treated to be the owner of the vehicle for all practical purposes or is viewed as the person in charge of the vehicle, the liability of tax and penalty foisted upon the assessee is unjustified and cannot be sustained. - Revision set aside - decided in favor of assessee. - Sales/Trade Tax Revision No. 557, 558 of 2011 - Dated:- 2-9-2016 - Hon'ble Yashwant Varma, J. For the Applicant :- Krishna Agrawal For the Opposite Party : C.S.C. ORDER Hon'bl .....

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in the business of manufacture and sale of motor vehicles, chassis and other parts. For the purposes of effecting sales of the articles manufactured by it, it establishes regional sales offices in various States throughout the country. During the assessment year in question a motor vehicle was sold by the revisionist to M/s Motor & General Sales Limited, Karnal, Haryana vide Bill No. 30698 dated 24 March 1992. The aforesaid vehicle is stated to have been sold by M/s Motor & General Sales .....

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rade Tax Act, 1948 1948 Act. By a separate order (challenged in Trade Tax Revision No. 558 of 2011) a penalty of ₹ 1,24,800 came to be imposed upon the revisionist in terms of the provisions of Section 15A(1)(g) of the 1948 Act. Sri Krishna Agarwal, learned counsel for the revisionist has assailed both the levy of tax as well as the imposition of penalty and has advanced the following submissions. Sri Agarwal submits that admittedly the vehicle in question had been sold to M/s Motors and G .....

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mary purpose of financing the purchase of assets or equipment. While in law, the hirer may continue to be the owner of the asset or equipment, for all practical purposes the borrower becomes the owner of the property and enjoys full rights over the asset or equipment including the right to take delivery, enjoy use of occupation, maintain, operate and bear risks of loss or damage. He has also placed reliance upon a judgment rendered by a learned Single Judge of this Court in Commissioner Trade Ta .....

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d sale of the vehicle or the infraction of registration laws by him could by any stretch of imagination be said to attach a liability of tax upon the revisionist. Sri Pandey, learned Standing Counsel while countering the above submissions has contended that a hire purchase agreement by its very nature does not result in a sale or a transfer of property in goods. He, therefore, submits that the revisionist continued to be the owner of the vehicle and was consequently correctly held liable to be p .....

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ighted the findings recorded in the order of the Tribunal to the effect that the vehicle had come to be registered with the transport authorities at Gorakhpur while the address of the selling dealer was shown to be at Azamgarh. This, Sri Pandey submits, has compelled the Tribunal to correctly come to a conclusion that the vehicle had been sold within the State of U.P. He further placed reliance upon Clause (2) of the hire purchase agreement to submit that the owner of the chassis in question was .....

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ming 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 incharge of such vehicle shall obtain in the prescribed manner a transit pass 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 exist from the State, failing which i .....

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on of goods by some other person, the hirer of the vehicle shall for the purposes of this Section, be deemed to be the owner of the vehicle." As is evident from a reading of the above provision, the section imposes an obligation upon the driver or other person in charge of a vehicle to obtain a transit pass at the first check-post barrier after entry into the State of U.P. and surrender the same to the officer in charge of the last check-post or barrier before exiting the State of U.P. The .....

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on to obtain a transit pass is placed upon the driver or other person-in-charge of the vehicle, it becomes apposite to note that the presumption of sale stands raised against the owner or the person in charge of the vehicle. The Explanation appended to the provision provides that in a case where the vehicle in question is hired for transportation of goods, the hirer of the vehicle shall for the purposes of the provision be deemed to the owner of the vehicle. It becomes pertinent to note here tha .....

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s that production of any other evidence to dislodge the conclusion to be drawn on proof of certain facts. But when it is rebuttable it only points out the party on whom lies the duty of going forward with evidence on the fact presumed, and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed the purpose of presumption is over. Then the evidence will determine the true nature of the fact to be established. The rules of presumption are d .....

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buttable presumption which is clearly a rule of evidence has the effect of shifting the burden of proof and it is hard to see how it is unconstitutional when the person concerned has the opportunity to displace the presumption by leading evidence. 17. We are of the view that the words contained in Section 28-B of the Act only require the authorities concerned to raise a rebuttable presumption, that the goods must have been sold in the State if the transit pass is not handed over to the officer a .....

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the State without effecting a sale within the State etc. It is only where the presumption is not successfully rebutted the authorities concerned are required to rely upon the rule of presumption in Section 28-B of the Act. It is, therefore, not correct to say that a transaction which is proved to be not a sale is being subjected to sales tax. The authority concerned before levying sales tax arrives at the conclusion by a judicial process that the goods have been sold inside the State and in doi .....

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. A person who sells goods inside the State of Uttar Pradesh and fulfills 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 .....

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test of "preponderance of probability". We do not think so. It is well settled that a decision is an authority for the point it decides. It is equally well settled that the text of the decision cannot be read as if it were a statute. That apart the expression used by this Court is "evidence fairly and reasonably tending to show", which signifies that it is not just any evidence, howsoever shaky and nebulous, that would satisfy the test of preponderance of probability to rebu .....

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s in our view applicable for two distinct reasons. The first and foremost is that the presumption is raised in relation to a fiscal statute. While the amount payable is not a tax, it is nevertheless a statutory levy which is attracted the moment the transaction of sale takes place within the market area. Goods admittedly produced within the market area and not consumed within such area are presumed to be leaving pursuant to a transaction of sale unless the contrary is proved. That the goods are .....

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e knowledge of the appellants or the persons to whom such goods are being dispatched. In other words, the circumstances in which the transactions, which the statute presumes to be sales, but which the appellants claim are simple transfer of stocks are within the exclusive knowledge of the appellants. The entire evidence relevant to the transactions, being available only with the appellants and the true nature of the transactions being within their special knowledge, there is no reason why the re .....

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es enunciated in Sodhi Transport. It, of course, with reference to fiscal statutes holds that the degree of proof must be clear and convincing. From the material that was placed before the respondent authorities, this Court finds that a vehicle sales invoices-cum-delivery challan dated 24 March 1992 also existed. This invoice established a sale of the chassis by the revisionist to Motor and General Sales Limited Karnal. The vehicle was identified both by chassis number as well as engine number. .....

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executed on 29 June 1992. The issue which therefore primarily arises is whether the rebuttable presumption which stood raised under Section 28-B stood discharged or not. As was noted in Sodhi Transport a rebuttable presumption is not evidence and is only indicative of the person upon whom the burden of proof initially lies and rests. A rebuttable presumption is clearly distinct from one which is conclusive in character. Under a rule of rebuttable presumption all that a person is obliged to do is .....

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act. The respondents in the present case had before them not just the invoices of sale executed by the revisionist in favour of Motor and General Sales Limited but also the delivery and sale invoice executed in favour of Naseem Ahmad. These documents evidenced a sale by way of hire purchase outside the State of U.P. The documents and evidences so led clearly tended to dislodge the rebuttable presumption raised. Whether the test of "tending to show" is applied or the test of "prepo .....

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