TMI Blog2017 (1) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 52 of the Act, with intent to evade tax under the Act. Under the circumstances, seizure of the goods under Section 48 of the Act and demand of cash security by the Mobil Squad Authority for release of the goods, does not suffer from any illegality. Whether Delhi - U.P. Border area of District Ghaziabad is "no-man's land"? - Held that: - the circular dated 31.01.1987 is non-existent. That apart, it has no relevance in view of the facts found and the constitutional provisions mentioned. Delhi - U.P. Border area of District Ghaziabad is not "no man's land" rather it is part of District Ghaziabad (U.P.). Whether transporters are strangers to the transaction of sale and purchase and totally ignorant about the consignors and consignees? - Held that: - 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 him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OON being transported through truck bearing Registration No.UP53T6492 were intercepted on NH28 near Barwa Forest, Kushinagar, by the Assistant Commissioner (Incharge) Commercial Tax, Mobile Squad, Padrauna, Kushinagar. Total value of goods as per invoices accompanying the eleven bilties of the respondent was ₹ 10,84,500/-. In the invoices, addresses of the alleged consignees were mentioned merely as Chhapra, Bihar . However, in the bilties name of consignees were mentioned as SELF . Value of goods mentioned in the invoices ranged from ₹ 20,500/- to ₹ 3,73,000/-. In these invoices, TIN number of consignees are not mentioned although in several invoices, central sales tax has been shown below the price of goods. Weighment slip dated 07.09.2016 of Jai Dharm Kanta, 142, Prakash Industrial Estate, Ghaziabad was also found accompanying the goods. On inquiry the TIN numbers mentioned in each invoices were found to be fictitious. Consignors were found non-existent. Thus, invoices were found to be fake and bogus. In the paper sheet (manifest) of the respondent, the transportation of goods is shown from U.P.B. to Chhapra or Siwan. Respondent could not prove from who they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Commissioner of Trade Tax U.P. Lucknow Vs. Vikram Tewari, Karol Bagh, Delhi, 2007 NTN (Vol. 33) - 376 and the Division Bench judgment in the case of Saiya Transport Pvt. Ltd. Vs. State of U.P. 2006 U.P.T.C. 967 and single judge judgment in the case of Madhya Bharat Transport Carrier, Gwalior Vs. Commissioner of Trade Tax, 2003 U.P.T.C. 1218, New Indore Delhi Road Lines Vs. Commissioner of Commercial Tax, U.P. Lucknow, 2012 NTN (Vol 49) -19, M/s Haryana Freight Carriers Pvt. Ltd, New Delhi Vs. Commissioner of Commercial Tax, U.P. Lucknow 2009(46), STJ 461, Seema Enterprises Vs. The Commissioner, Commercial Tax, 2013, Tax Law Diary - 246 (para 29, 32, 39), Om Logistic Ltd. Vs. Commissioner, Commercial Tax (TTR 326 of 2011) decided on 27.7.2016 and the circular of the Commissioner dated 31.1.1987, Commissioner, Commercial Tax, U.P. Lucknow Vs. Panch Kanya Road Carriers, Ghaziabad, 2012 NTN (Vol.49)-22 and the Hon'ble Supreme Court judgment in the case of Sridhar Vs. Nagar Palika, Jaunpur and others, 1989(2) AWC, 1433 (para 3). Lastly, learned counsel for the respondent submits that this revision may be finally decided on the basis of submissions made and he does not wish to ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods seized under this sub-section shall be prepared by such officer and be signed by the officer and not less than two witnesses. (2) Where any officer referred to in sub-section (1) has reason to believe that the goods found in any vehicle, vessel, building or place are not traced to any bonafide dealer or documents issued by a bonafide dealer with respect to accompanying goods contains wrong particulars or that it is doubtful if such goods are properly accounted for by any dealer in his accounts, registers or other documents, maintained in the ordinary course of his business, he shall have power to seize such goods, and the remaining provisions of this section shall mutatis mutandis apply in relation to such seizure. (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. (4) The said assessing authority shall serve on the dealer or, as the case may be, the person in charge of the goods at the time of seizure (hereinafter in this section referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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-incharge. (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... himself about their correctness and completeness, sign and stamp with his official seal, retain the original portion of the declaration or the certificate and return to the registered dealer or the person other than the registered dealer, as the case may be, the duplicate portion thereof after endorsing thereon a receipt for the retained original portion. The assessing authority may, in his discretion, direct the dealer or the person concerned to furnish copies of bill or cash memorandum or challan or invoice received by him from the selling dealer or the consignor of the other State for verification of the contents of the declaration or the certificate. (3) The concerned authority of rail, air, or post shall not deliver the consignment to the dealer or person concerned unless the declaration or certificate dully endorsed as aforesaid, is furnished before him. (4) The provisions in rule 54,and rule 56, except sub-rules (1), (6), (8) and (11) thereof and of rule 57 except subrule (1) and (6) thereof shall mutatis mutandis, apply in regard to the declaration or certificate, as the case maybe, referred to in sub-rule (1). (5) The commissioner may from time to time is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r its release under Section 48 of the U.P. VAT Act, 2008 is valid? 10. Undisputedly, the TIN numbers mentioned in the invoices, were found fictitious, consignors were found non-existent, addresses of the alleged consignees have not been mentioned in the invoices, below the name of alleged consignees for address, merely the words Chhapra, Bihar has been written, TIN numbers of consignees have not been mentioned in the invoices although the value of goods in the invoices ranged from ₹ 20,500/- to ₹ 3,73,000/-. Thus, invoices are apparently fake and bogus. In the invoices, C.S.T. or VAT has been shown to deceive the authorities as if sales of goods have been subjected to tax. The facts that consignors are non existent, TIN numbers mentioned in the invoices are fictitious, invoices are fake/ bogus, CST/ VAT shown in the invoice is deceitful act of undisclosed non-bonafide dealer and the goods originated for transportation from Ghaziabad (U.P.) as evident from the weighment slip and statement on oath of the driver of the truck dated 09.09.2016 and the TDF-1; leave no manner of doubt that the entire transaction and transportation is being carried fraudulently so as to gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtation 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 non-bonafide dealer to evade tax under the Act. 14. The findings of the Tribunal that Delhi - U.P. Border area of District Ghaziabad is no man's land as per circular of the Commissioner Sales Tax, dated 31.01.1987, is perverse and unsustainable in view of the answer to the question No.(ii) by this court in subsequent paragraphs of this judgment. Similarly the findings of the Tribunal that the fact of consignees to be non-existent and non-bonafide are not relevant, is also not sustainable in view of the answer to Question Nos.(iii) and (iv) in subsequent paragraphs of this judgment and the facts and findings recorded above. The finding of the Tribunal that there was no evidence of loading of the goods within U.P. is perverse in view of the facts and findings recorded in paras-10, 11, 12 and 13 above. In fact, the Tribunal even being the last fact finding Authority has completely failed to discharge its statutory obligation and recorded its findings without proper examination of facts and the papers before it, namely the bil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 03.09.2013 providing for the procedure for vehicles passing through the State which person incharge of the vehicle is bound to follow. Paragraph-6 of the aforesaid circular dated 03.09.2013 provides as under: 17. The circular dated 31.01.1987 has been heavily relied by the respondents on the basis of certain judgments of this court contending that the area of Chikambarpur, Ghaziabad is a no man's land as per the circular. It is relevant to note that even the said circular has been cancelled by the Commissioner of Commercial Tax by circular dated 29.08.2016, which is reproduced below: 18. Thus, the circular dated 31.01.1987 is non-existent. That apart, it has no relevance in view of the facts found and the constitutional provisions mentioned above. Delhi - U.P. Border area of District Ghaziabad is not no man's land rather it is part of District Ghaziabad (U.P.). Question No. (iii) Whether transporters are strangers to the transaction of sale and purchase and totally ignorant about the consignors and consignees? 19. The ignorance shown by the respondents about the consignors and consignees, cannot be accepted in view of the observations of H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal 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? 23. In the case of Vodafone International Holdings BV Vs. Union of India and another, (2012) 6 SCC 613 (paras 323, 331) Hon'ble Supreme Court considered the effect of adoption of colourable devices and held as under: 323. McDowell has emphatically spoken on the principle of Tax Planning. Ranganath Mishra, J. on his and on behalf of three other Judges, after referring to the observations of S.C. Shah, J. in CIT v. A. Raman and Co. AIR 1968 SC 49, CIT v. B. M. Kharwar (1969) 1 SCR 651, the judgments in Bank of Chettinad Ltd. v. CIT, (1940) 8 ITR 522, Jiyajeerao Cotton Mills Ltd. v. CIT, Bombay AIR 1959 SC 270; CIT v. Vadilal Lallubhai (1973) 3 SCC 17 and the views expressed by Viscount Simon in Latilla v. IRC, (1943) AC 377 : 25 TC 107 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a conduct either by letter or words, which induces the other person, or authority to take a definite determinative stand as a response to the conduct of former either by word or letter. 17. It is also well settled that misrepresentation itself amounts to fraud. Indeed, innocent misrepresentation may also give reason to claim relief against fraud. 18. A fraudulent misrepresentation is called deceit and consists in leading a man into damage by willfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad. 25. Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res-judicata. 37. It will bear repetition to state that any order obtained by practising fraud on court is also non-est in the eyes of law. (Emphasis supplied by me) 26. In the case of S.P. ChengalVaraya Naidu (dead) by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt to misrepresentation and fraud on the employer and, therefore, it would create no equity in his favour or any estoppel against the employer while resorting to termination without holding any inquiry. 29.4 A candidate having suppressed material information and/or giving false information cannot claim right to continue in service and the employer, having regard to the nature of employment as well as other aspects, has the discretion to terminate his services. 29.5 Purpose of calling for information regarding involvement in any criminal case or detention or conviction is for the purpose of verification of the character/antecedents at the time of recruitment and suppression of such material information will have clear bearing on the character and antecedents of the candidate in relation to his continuity in service. 29.6 The person who suppressed the material information and/or gives false information cannot claim any right for appointment or continuity in service. 29.7 The standard expected of a person intended to serve in uniformed service is quite distinct from other services and, therefore, any deliberate statement or omission regarding a vital informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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