TMI Blog2017 (6) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... rom any place outside the State and is bound to any other place outside the State of U.P. - The transport vehicle crossing the State has to possess a transit declaration form as well as other documents required to be possessed as per the circular issued by the Commissioner in terms of Section 50 of the Act. The authorities are entitled to verify whether such declaration/documents are available with the vehicle and disclosure made is true, and if it be so, no further scrutiny is warranted. The authorities would be entitled to verify correctness of declarations/documents. For such purposes, the authorities can verify as to whether the goods actually transported are as disclosed in the TDF, and physical verification can be made to ascertain that declaration made is true. The object of enquiry is merely to satisfy that goods declared to be transported are coming from outside the State, and is actually bound to a place beyond the State. If for part of the goods no reference is made in TDF or relevant supporting documents are missing, a rebuttable presumption might arise that such goods are not intended to cross the State, and are likely to be offloaded within the State. After conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER 1. Revisionist, a transporter stationed at Delhi, is before this Court in the present revision, questioning legality of an order passed by the Tribunal, upholding seizure of goods and permitting its release upon deposit of security amounting to ₹ 3,96,800/-. Revisionist is not a dealer registered under U.P. Value Added Tax Act, 2008 (hereinafter referred to as the 'Act'). 2. It is alleged that 52 different persons booked consignment with it for transportation from Delhi to Jamshedpur. Invoices were furnished by the consignors and on such basis applicant prepared challan alongwith GR's for 484 boxes valued at ₹ 11,41,766/-. The goods were dispatched vide transport vehicle No. HR 37 C-9533. Before entering the State of U.P., applicant-revisionist obtained transit declaration form (TDF-I) No. D20161100247018 as is required under the U.P. VAT Rules, 2008. Entry point of vehicle in the State was shown at Mohan Nagar, Ghaziabad on 21.11.2016, whereas exit point of vehicle was shown as Bindomganj at Sonebhadra on 25.11.2016. On 21.11.2016, just after the vehicle entered U.P., it was checked by mobile squad and the driver of the vehicle produced TDR- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing through the State: When a vehicle coming 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 51, passes through the state, the driver or other person in charge of such vehicle shall obtain in the prescribed manner an authorisation for transit of goods 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 exit from the state, failing which it shall be presumed that the goods carried thereby have been sold within the state by the owner or person in charge of the vehicle; Provided that the goods carried by such vehicle are, after their entry into the state, transported outside the state by any other vehicle or conveyance, the onus of proving that the goods have actually moved out of the state shall be on the owner or person in charge of the vehicle. Explanation - For the purposes of this section, the hirer of the vehicle shall also be deemed to be the owner of the vehicle. 7. Rule 58 of the U.P. Value Added Tax Rules, 2008, is the relevant rule for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no such place, where he ordinarily resides or shall download from official web site of the department in such manner as may be prescribed: Provided that where the importer intends to bring, import or otherwise receive such goods otherwise than in connection with business, he may, at his option, in the like manner obtain the prescribed form of certificate. Provided further that the Commissioner may notify the website in which the particulars prescribed to be contained in the declaration referred to in sub-section (1) shall be entered in respect of any specified class of goods or any specified class of dealers or as a result of any specified class of transaction to be notified by him. If the Commissioner notifies the website, the owner or the person in-charge of the goods which are carried by a vehicle, shall enter the prescribed particulars in the notified website and shall produce the proof of entering the particulars in such website, before the officer making search or inspection under this section, in the manner prescribed by the Commissioner. (2)(a) where such goods are imported, brought or otherwise received into the state by registered dealer, he shall c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the State from any place outside the State any goods other than the goods described in Schedule-I, is required to make declaration in prescribed form. The Commissioner by virtue of proviso to sub-section (1) has already notified the website at which particulars prescribed to be contained in declaration has to be entered. Sub-section (4) provides where the officer making the search or inspection under this section finds any person transporting or attempting or abetting to transport any goods to which this section applies, without being covered by the proper and genuine documents, the authority concerned may order detention of goods, after recording satisfaction in the matter contemplated, and after affording an opportunity of hearing. The provisions of sub-sections (3), (7), (8), (9) and (10) of section 48 shall apply to goods detained under sub-section (4). Section 48 contemplates power to seize goods. Sub-sections (3), (7), (8), (9) and (10) of section 48 of the Act reads as under:- 48. Power to seize goods.- (1) .... (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 accordance with the provisions of sub-section (8). (10) If the amount deposited under sub-section (7) is more than the amount of penalty imposed under sub-section (5), the excess amount so deposited shall be refunded to the dealer or, as the case may be, the person in-charge by the authority with whom it was so deposited, in accordance with the provisions of section 40. 12. Reference, at this stage, may also be had to Section 46 of the Act, which provides for power of search, inspection and seizure, in case of a person other than the dealer. Vide explanation added to Section 46, for the purposes of the section, a transporter or any other carrier or a forwarding agent of goods shall be deemed to carry on activities ancillary or incidental to or in connection with the business of a dealer. The transport vehicle crossing the State has to possess a transit declaration form as well as other documents required to be possessed as per the circular issued by the Commissioner in terms of Section 50 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person, the hirer of the vehicle shall for the purpose of this section, be deemed to be the owner of the vehicle. Section 87. The transit of goods by road through the State.--(1) The driver or person-in-charge of a vehicle coming from any place outside the State and bound for any other place outside the State shall present the trip sheet in triplicate to the officer-in-charge of the check-post or barrier, if any, established near the point of entry into the State hereinafter referred to as entry check-post. (2) The officer-in-charge of the entry check-post shall after examining the document and after making such enquiries as he deems necessary specify on all the copies of the trip sheet the check-post or the barrier (hereinafter referred to as the exit check-post) of the State to be crossed by the vehicle or vessel and the time and date up to which it should be so crossed and deliver two copies of the trip sheet to the driver or person-in-charge of the vehicle retaining one copy himself. (3) The driver or person-in-charge of the vehicle or vessel shall stop his vehicle at such exit check-post surrender one copy of the trip sheet and allow the officer-in-charge of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the responsibility on the driver or the person-in-charge or hirer of the vehicle to obtain form XXXIV and to surrender at the exit check-post. In case, if the form XXXIV is not surrendered, it is the transporter against whom the presumption is drawn as contemplated under Section 28-B of the Act and the transporter would be treated as dealer . It is made clear that transporter may be owner of the vehicle, which includes hirer and person-in-charge and driver represents, owner of vehicle. This situation has also been considered by the honourable Supreme Court in the case of Sodhi Transport Co. case [1986] 62 STC 381 ; 1986 UPTC 721. The honourable Supreme Court observed as follows : When once a finding is recorded that a person has sold the goods which he had brought inside the State, then he would be a dealer even according to the definition of the word 'dealer' as it stood from the very commencement of the Act subject to the other conditions prescribed in this behalf being fulfilled. 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound with the same private marka but consisting 3600 pieces. Likewise in all other cases so far as the number of packages and description of the goods are concerned they were found exactly same but the difference in number of pieces were found. It is pertinent to state at this stage that in GR only number of packages are mentioned and not the pieces. In form XXXIV also number of packages are only mentioned and not the pieces. The pieces are only found mentioned in the bill. Learned counsel for the applicant contended that form XXXIV was issued with reference to the GR and only number of packages are mentioned in form XXXIV and therefore, what was required to be verified was the number of packages. He submitted that the transporter has no control on the consignor and it is wholly impossible and impracticable to open each and every package and verify the number of pieces inside the packages at the time of booking. He further submitted that verification should be made with reference to the packages, which is mentioned in form XXXIV and not with reference to number of pieces contained inside the packages and if the authority wants to verify the goods with reference to the number of pie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appear to have been over enthusiastic in performance of their duties and have detained the goods of the petitioner on the irrelevant reasons about the source and origin of the goods and the addresses and registration of the consigner and consignee. 16. Similar view was reiterated in Commissioner, Trade Tax, U.P. Lucknow Vs. Vikram Tewari, Karol Bagh, Delhi, reported in 2007 NTN (Vol.33) 376. Following observations made therein are reproduced:- However, before parting with the case, let us consider a situation that if the driver had obtained transit pass at the entry check post in respect of the goods loaded in the vehicle having an intention to del iver/sel l the goods inside the State of U.P. on the garb of the transit pass, be can adopt such situation at the risk of the levy of tax and penalty in case of non-surrender of the transit pass. No owner of the vehicle or transporter can af ford to invite the liabi lity of tax and the penalty which is quite substantial by sel ling the goods inside the State of U.P. and nonsurrendering the transit pass at the exit check post. The driver of the transport company can only adopt such a situation when he has hope to get the such tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght of the above purpose, the existence of the selling and purchasing dealers or their non registration in their respective States would not be a material and a valid ground for seizing the goods. xxxxx xxxxx xxxxx Admittedly, in the present case the goods were seized immediately on their entry in the State of U.P. without allowing the time for its exit to expire. In such situation, it is wrong to presume that the goods have been retained for the purposes of sale. Apart form the above, as the goods were duly accompanied by the requisite documents, no presumption arises under law that they were likely to be sold within the State of U.P. 18. In Seema Enterprises, Canal Avenue, Behind Bus Stand, Bargarh (Orissa) Vs. Commissioner, Commercial Tax, U.P. Lucknow, reported in 2013 NTN (Vol.52) 237, this Court again examined provisions of the Act as well as scope of enquiry by the authorities regarding goods transported through the State. This Court observed that any discrepancy in respect of an earlier transaction would not be relevant, in following words:- Section 48 of the Act gives power to the officer to seize the goods found in the vehicle in case if the goods are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Bright Road Logistic Cargo Company Vs. Commissioner, Commercial Taxes, Lucknow, reported in 2016 NTN (Vol.61) 309, in following words:- In this case, the Transit Declaration Form has not been found to be wanting in any respect. It was also within the validity period. Such being a case, it is open to the department to trail the goods up to the boundaries of the State. The goods seized however, may be released without payment of any security. The goods may be trailed right to the border of the State of U.P. to ensure that no escapement of tax is made within the State of U.P. 22. The Tribunal, in the facts of the present case, has however relied upon a recent decision of this Court in The Commissioner, Commercial Tax, U.P. Lucknow Vs. S/S. Bihar Carrying Corporation, dated 11.1.2017, delivered in Sales/Trade Tax Revision No.456 of 2016. In Bihar Carrying Corporation (supra), an order of Tribunal was under challenge at the instance of State in so far as release of goods was allowed, without any security. The provisions of the Act and Rules were noticed, and following questions were framed for consideration:- (i) Whether under the facts and circumstances of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... afide dealers. By seizure of goods in such cases transporter is not affected if he is really a transporter. Therefore, instead of being torch bearer of dishonest persons, he should allow the real consignors or consignees to come forward and assign reasons for concealing their real 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? Question no.4, noticed above, was then answered in following words in paragraph 29:- 29. Facts of the present case as noted above, leave no manner of doubt that the alleged invoices accompanying the goods are fake, the TIN numbers printed therein are fictitious, the alleged consignors are non-existent, the goods originated for transportation from Ghaziabad (U.P.), C.S.T. or VAT shown in the invoices is not real but a deceitful act of undisclosed non-bonafide dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms of Section 52 of the Act and Rule 58 of the Rules, the authorities under the Act have no power to seize the goods and demand security for release thereof but where, as in the present case, the transaction is sham, not genuine and make-believe and originated from a place within the State of U.P. or intended to be sold within the State of U.P. with intent to evade tax then it would be a case falling under Section 48 of the Act. Provisions of Sections 48 52 of the Act, have to be considered in a manner so as to hold that it serves to seek a reasonable result. Protection of Section 52 of the Act cannot be extended for evasion of tax under the Act, to perpetuate fraud or to do something indirectly which cannot be done directly. 23. The questions formulated and answered in Bihar Carrying Corporation (supra) were in the factual backdrop of the case in question, and the observations made therein would have to be construed in light of the facts of the case. It is settled that if the goods are found not to have originated from a place beyond the State of U.P., Section 52 apparently would have no applicability, and the defense of possessing TDF would otherwise not be available. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Jurisdiction of State Authorities under the Act is only to verify as to whether goods in transit are actually passing through the State, or under garb of it, are to be sold within the State, without paying tax due. The authorities possess jurisdiction to investigate movement of goods through State only to the extent permitted in law, failing which their action would be open to challenge on the ground that it impedes freedom of trade, commerce and intercourse within the territory of India, as are enshrined in Part XIII of the Constitution of India. 26. What is permissible to enquire is that the required declaration exists in terms of circular issued under Section 52 and disclosures therein are correct or not? If the declaration made in TDF is correct with reference to the goods transported, and matches with the bill/bilty etc., required as per circular, the authorities would not be justified in proceeding any further or to probe identity of consignor and consignee etc. 27. When goods for transportation are booked through transporter, it would proceed on the basis of information furnished by the consignor, and while transporting goods, it is not expected to investigate ident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods transported was also found wrong. To that extent, goods transported are found to be at variance with the declaration made in TDF and the authorities would clearly be justified in detaining goods so as to proceed lawfully against it. Although, it is settled that service of notice has to be in accordance with the Rules of 1972, but on facts, it is found that notices were served upon transporter by the registered post as well. In view of the finding that letters have been sent by registered post on 30th November, 2016, and 10th December, 2016, the argument that proceedings drawn were violative of principles of natural justice cannot be sustained. The facts that goods were detained were otherwise within the knowledge of the transporter, and no application was moved for release of vehicle. It is only on 6th March, 2017 that the transporter has made an application to release the vehicle and the goods transported as per TDF were released alongwith vehicle, on the very next day. The argument of the counsel that vehicle has been illegally detained for more than three months by the authorities, therefore, cannot be accepted. 29. The order of seizure of goods, therefore, in so far as i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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