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2016 (10) TMI 784 - ALLAHABAD HIGH COURT

2016 (10) TMI 784 - ALLAHABAD HIGH COURT - TMI - Courier service provider - logistics Agreement - inspection of premises - presence of various goods which had not entered the State of U.P on the strength of certain Forms 38/39 - seizure of goods - power of seizure - Held that: - The power to seize goods is not dependent upon the bonafides or characteristics of a past transaction or perceived course of business. It has to be necessarily exercised in the backdrop of whether the goods which are bei .....

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e or refers to any material which may have cast a shadow of doubt on the said recital which stood recorded in the course of the initial seizure proceedings. Further, the view taken by the Tribunal to the effect that the sale would stand completed only upon the payment for the goods and that the payment of price would be determinative of the issue would also, in the opinion of this Court, appear to be an issue which may not be free from debate. This Court however refrains from commenting further .....

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n allowed - decided in favor of revisionist. - Sales/Trade Tax Revision No. 370, 371, 372 of 2015 - Dated:- 3-10-2016 - Hon'ble Yashwant Varma, J. For the Applicant : Parv Agarwal, Bharat Ji Agrawal, Shubham Agrawal For the Opposite Party :- C.S.C. ORDER Heard Sri Shubham Agrawal, learned counsel appearing for the revisionist and Sri B.K. Pandey, learned standing counsel for the respondents. These three revisions are with the consent of the learned counsel for the parties taken up for dispos .....

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the sake of brevity referred to as the "web portal"). In terms of this Agreement, the revisionist was liable to collect consignments from the consignor's address furnished by the web portal. The web portal itself is, in the submission of the learned counsel for the revisionist, an e-commerce site which enables individuals situate throughout the length and breadth of the country to place orders for goods displayed upon the website and obtain delivery thereof on payment of considerat .....

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certain Forms 38/39. Upon the revisionist being put to notice, no reply appears to have been submitted till the stage of initiation of proceedings under sub-section (7) of Section 47 of U.P. VAT Act, 20081. The revisionist raised various fundamental contentions, inter alia, relating to its exigibility to tax under the 2008 Act as also as to whether it was liable to be treated as a "dealer" under the provisions of the 2008 Act. It was further contended before the authorities that the go .....

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f the Tribunal, the various contentions, which the revisionist advanced and which are reiterated before this Court, have been answered against it. The Tribunal, while exercising powers under Section 48 of the Act, has proceeded to return and record the following findings:- A. The revisionist is liable to be treated as a "dealer" under the provisions of the 2008 Act. B. The transaction as effected on the e-commerce web portal and in respect of which moneys are received within the State .....

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d the State of U.P from outside was not disputed by the Department. He submits that at the stage of seizure the revisionist was faulted upon by virtue of the fact that the goods which were found present in the premises did not appear to have entered the State on the back of Forms 38/39. A more serious objection which Sri Agrawal takes is to the findings which stand recorded by the Tribunal with respect to the issue of whether such transactions could be treated to be sales which had taken place w .....

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what was held by the Supreme Court in Commissioner of Income-tax, Delhi Vs. P.M. Rathod and Company (1959) 10 STC 193 was clearly in favour of the revisionist. Shri Agrawal then refers to the definitions of 'business' and 'dealer' as enumerated in clauses (e) and (h) of Section 2 of 2008 Act to submit that the services rendered by a courier company like the revisionist clearly cannot be envisaged to be a business engaged in the sale or purchase of goods. He stresses upon the fact .....

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n agent as envisaged under Section 2 (h) of 2008 Act. On facts Sri Agrawal takes objection to the seizure of the goods on the ground that the shortcomings pointed out pertained to prior consignments and did not relate to the seized goods at all. It was his submission that the seized consignments, which formed subject matter of the two appeals in question presently, were not adversely commented upon and that it was only certain prior transactions which fell for adverse scrutiny and comment and th .....

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er, as such he is liable to be treated as a "dealer". He further submits that even otherwise and in the alternative this Court would be justified in holding that the revisionist fell within the ambit of clause (ix) of Section 2 (h) being a "courier service provider" who had failed to disclose the name and complete addresses of its consignees. Shri Pandey then submits that the Tribunal has committed no illegality in proceeding to hold that the sale was completed upon the recei .....

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t becomes relevant to note, envisages an authorized officer to seize goods where he has reason to believe that the same have not been accounted for by the dealer in his accounts, registers and other documents. A further right is conferred upon the authorized officer to effect seizure of goods where he comes to a conclusion that the goods are not accompanied by a tax or sale invoice or any other document pertaining to the value of the goods or where he comes to a prima facie conclusion that the g .....

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h goods are properly accounted for by any dealer in his accounts, registers or other documents maintained in the ordinary course of business. From the provisions of Section 48 of the Act, this much is apparent that the enquiry which is liable to be undertaken is with respect to whether the goods, which have been seized, have been duly accounted for in the books of accounts, whether their value has been correctly declared or whether they are traceable to a bonafide dealer or whether the authorize .....

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hat the pointed issues which actually fell for or should have fallen for determination and were germane to the exercise of powers under Section 48 of the Act have been lost sight of. More fundamentally the objection which stands raised and which becomes evident from the record is that the Tribunal has completely failed to record any finding with respect to the seized goods having not been duly accounted for in the books of accounts or having not been truly or faithfully recorded in the books mai .....

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ed the subject matter of the instant seizure with the same brush. It is not disputed before this Court by the learned standing counsel that the various discrepancies which were noticed by the Tribunal were not related to the goods seized but pertained to earlier transactions. This in the opinion of this Court was clearly impermissible. The power to seize goods is not dependent upon the bonafides or characteristics of a past transaction or perceived course of business. It has to be necessarily ex .....

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