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Madhya Pradesh High Court · body

2004 DIGILAW 855 (MP)

S. Vayyapuri v. Commissioner of Commercial Tax

2004-10-28

DEEPAK VERMA, P.C.AGARWAL

body2004
Judgment ( 1. ) THIS order shall also govern disposal of connected Appeal No. 131 of 2004, as the points involved in both the appeals are identical and learned single Judge, has disposed of other appeal also on the strength of an order, passed by him on January 27, 2004 in identical writ petitions. ( 2. ) FACTUAL matrix are as under : Appellant No. 1 is a transporter and appellant No. 2 was the driver of a truck at the relevant point of time. 140 bags of supari (betel-nut) were loaded in the truck belonging to appellant No. 1 driven by appellant No. 2, at Chaliseri (Kerala), and despatched by owner of the goods M/s. Mustafa Traders, Chaliseri (Kerala) to be delivered to M/s. Fazil Enterprises, Indore. ( 3. ) ACCORDING to the appellants consignee has been working as commission agent of the consignor. The challan for commission sale, issued by Mustafa Traders dated May 29, 2002, shows that betel-nut new (supari) second quality, weighing 90 quintals was being transported in the said truck. The rate shown was Rs. 2,000 per quintal, total cost of goods was Rs. 1,80,000. A form of delivery note to be submitted before the Kerala authority, also shows the same quantity, same rate and the total value of the consignment. The said truck reached the check-post erected by commercial tax authority, Gavadi (Sendhawa) (M. P.) on June 1, 2002. The Check-post Officer asked the driver for necessary declaration and other documents pertaining to the goods transported. The said Check-post Officer found that the value of goods shown was much below the prevalent market rate. Thus, he initiated proceedings against him, as contemplated under Section 45-A of the Madhya Pradesh Commercial Tax Act, 1994 [section 45-A has been inserted with effect from March 15, 2000 vide M. P. Commercial Tax (Amendment) Act, 2000) (hereinafter shall be referred to as "the Act"]. Similar were the facts with regard to other case as goods were being carried in two separate trucks. Thus, two cases were initiated. ( 4. ) IN the files opened with regard to the aforesaid cases, order sheets dated June 1, 2002 mentions that value of the supari was shown at Rs. 18 per kg. which was much below the then market value of the said supari. Thus, further action was initiated and truck was not allowed to proceed. ( 4. ) IN the files opened with regard to the aforesaid cases, order sheets dated June 1, 2002 mentions that value of the supari was shown at Rs. 18 per kg. which was much below the then market value of the said supari. Thus, further action was initiated and truck was not allowed to proceed. The driver of truck had put his signatures on the order sheet of the said date. Original records were perused by us. ( 5. ) AS mentioned above, the Check-post Officer deployed on the said check-post, had not found any discrepancy in the quantity or description of goods from the documents, but, he was not satisfied with the value of goods mentioned in the said documents, as according to him the goods were undervalued. ( 6. ) A notice was, then, served to the driver under Sub-section (10) of Section 45-A of the Act on June 1, 2002 itself. The commission agent, consignee submitted reply to the said notice. It was mentioned in the reply, that according to laws of Kerala Government, the goods could be permitted to cross the border only after payment of tax on market rate on this agriculture produce of supari and since that tax was already paid by the appellants in which market rate was also shown, the same should be deemed to be depicting true and correct market rate. It was further mentioned in the reply that even during that period the same quality of supari was being sold at the rate of Rs. 25-30 per kg. at Indore. From the perusal of reply, it appears that the contention was that in any case the goods were not undervalued. ( 7. ) THE Commercial Tax Officer, after taking into consideration the material placed by the appellants, passed an order on June 7, 2002 and imposed total penalty of Rs. 82,800, in both cases, as according to him, on the date when the goods were being transported, the rate of supari was Rs. 40 per kg. This order passed by Commercial Tax Officer, was carried in revision to the Deputy Commissioner of Commercial Tax, Khandwa, who has also, after examining the matter, found that there was no merit and substance in appellants revision and dismissed the same vide order dated March 13, 2003. 40 per kg. This order passed by Commercial Tax Officer, was carried in revision to the Deputy Commissioner of Commercial Tax, Khandwa, who has also, after examining the matter, found that there was no merit and substance in appellants revision and dismissed the same vide order dated March 13, 2003. Thus, both the authorities found that goods sought to be carried and transported by the appellants, were undervalued, whereas, prevalent market value of goods on the date of checking was much more. ( 8. ) THESE two orders, passed by the Commercial Tax Officer, imposing penalty on the appellants and the revisional order, passed by the Deputy Commissioner of Commercial Tax, were subject-matter of challenge in the writ petitions, preferred by the appellants under articles 226/227 of the Constitution of India, before learned single Judge, who has vide impugned order dismissed both the writ petitions. ( 9. ) THE learned single Judge heard both matters on the same date and was pleased to dismiss both writ petitions in limine. Thus, there was no reply filed by respondents to the averments made by appellants in their petitions. ( 10. ) NOW Letters Patent Appeals have been preferred against dismissal of their petitions under clause X of the Letters Patent. ( 11. ) SHOW cause notices against admission were issued to the respondents. Respondents have submitted their reply/return before this Court. Respondents have placed reliance on the provisions of Section 45-A (7) of the Act to show that even with regard to value of goods, the Check-post Officer was fully justified to make a query in this regard. It has also been mentioned that the Legislature had thought of giving jurisdiction to the Check-post Officer to raise doubts in case there were sufficient reasons regarding valuation of goods mentioned in form No. 75. ( 12. ) FURTHER reasons have been assigned as to what benefits consignor or consignee would draw by undervaluing the goods. According to them, looking to the turnover from time to time, different slabs of tax liabilities have been prescribed and in case turnover exceeds to certain limits, then, value added tax (VAT) liability as contemplated under Section 9-B would also be levied. Thus attempts are made not to cross that turnover, which might attract levy of VAT also. According to them, looking to the turnover from time to time, different slabs of tax liabilities have been prescribed and in case turnover exceeds to certain limits, then, value added tax (VAT) liability as contemplated under Section 9-B would also be levied. Thus attempts are made not to cross that turnover, which might attract levy of VAT also. The reason for arriving at the conclusion, with regard to market value of supari shown much below, has also been averred in the reply. ( 13. ) IT was, therefore, contended by the respondents that learned single Judge has committed no error or illegality in dismissing the appellants writ petitions. ( 14. ) WE have accordingly heard the learned counsel for the parties at length, perused the record. ( 15. ) THE relevant Sub-section (7) of Section 45-A of the Act, which is material for deciding the said appeals are reproduced hereinbelow : " (7) If the Check-post Officer finds after searching the vehicle and verifying the declaration or other documents relating to the goods, that- (a) goods notified under Sub-section (4) are being transported in respect of which the transporter has not filed any declaration ; or (b) the declaration filed in respect of any goods is false or incorrect, either in respect of the kind of goods, or the quantity of goods transported, or the value thereof ; or (c) the consignor or the consignee of the goods is shown to be a dealer registered under this Act, while the records available in his office do not show the existence of such a dealer : such officer may presume, until the contrary is proved, that an attempt was being made to facilitate the evasion of tax in respect of such goods and he may, after recording his reasons thereof in writing, a copy of which shall be forthwith supplied to the transporter, seize such goods or the vehicle along with the goods in such manner as may be prescribed. " ( 16. ) PERUSAL of the aforesaid sub-section makes it clear that the Check-post Officer, after searching the vehicle and verifying the declaration and other documents relating to the goods would be justified to make inquiry with regard to the correctness of the documents in respect of the goods, or the quantity of the goods transported, or the value thereof. ( 17. ) PERUSAL of the aforesaid sub-section makes it clear that the Check-post Officer, after searching the vehicle and verifying the declaration and other documents relating to the goods would be justified to make inquiry with regard to the correctness of the documents in respect of the goods, or the quantity of the goods transported, or the value thereof. ( 17. ) THIS sub-section further makes it clear that until the contrary is proved by the person who is transporting the goods, it would be presumed by the Check-post Officer, that an attempt was being made to facilitate evasion of tax in respect of such goods. On being satisfied, he is required to record his reasons therefor in writing. ( 18. ) LEARNED counsel for the appellants strenuously submitted before us that there was no basis for the Check-post Officer to come to the conclusion that market value of the goods (supari in this case) was Rs. 40 per kg. It was also submitted that the evidence which was collected by him in this regard was not supplied to the appellants and, therefore, he only acted on surmises and presumption. ( 19. ) WE find that notice was served to the appellants by the Check-post Officer under Sub-section (10) of Section 45-A of the Act. In the said notice, it was categorically mentioned that the market rate of supari on the said date could not be less than Rs. 40 per kg. While submitting the reply, the appellants have mentioned that the rate of supari during that period at Indore was between Rs. 25 to 30 per kg. What was the basis for the appellants to mention this rate, has not been substantiated by any other evidence. If, according to the appellants the rate which was shown by the Check-post Officer was wrong, or, improper, then, it was for the appellants to have substantiated this by adducing sufficient evidence. They have failed to do so, despite grant of time to them. Thus, this ground does not hold good and is negatived. ( 20. ) IT was also submitted that while crossing Kerala, appellants had paid agricultural tax on the export of the said goods, in which same value of the consignment was shown which have been shown in the challans and Kerala Government had accepted the said price without any objection. Thus, this ground does not hold good and is negatived. ( 20. ) IT was also submitted that while crossing Kerala, appellants had paid agricultural tax on the export of the said goods, in which same value of the consignment was shown which have been shown in the challans and Kerala Government had accepted the said price without any objection. Thus, the same value should have also been accepted by the Check-post Officer. ( 21. ) WE find no merit and substance in this ground. Any declaration submitted by the appellants for the purposes of crossing Kerala border to the Kerala Government, would not be binding to the State of Madhya Pradesh. If goods are brought to be sold within this State, then, all tax liability has to be met by such person only. Declaration with regard to market value of goods submitted by appellants to Kerala Government cannot render any help, assistance or benefits to the appellants, if, the said goods are brought for sale in State of Madhya Pradesh. ( 22. ) LEARNED counsel for the respondents has placed reliance on a judgment reported in the matter of Commissioner of Sales Tax v. P. T. Enterprises [2000] 117 STC 315; (2001) 26 TLD 86 decided by the Supreme Court, in which, similar provision as contained in Section 29-A of the M. P. General Sales Tax Act, 1958 (since repealed) was under consideration. The facts of the said case are identical. In this it has been held by the Supreme Court that the authorities also had a right to question the value of the goods as contained in the documents with reference to market value. ( 23. ) IN the light of aforesaid discussions and also keeping in mind that two authorities below have recorded a finding of fact with regard to value of goods, as prevalent in the market then, which, was also scrutinised by learned single Judge, who was, then, pleased to dismiss the petitions, against such findings, no case for interference in this letters patent appeal is made out. ( 24. ) THUS, this and the connected appeals are, accordingly, hereby dismissed, but with no order as to costs.