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2016 DIGILAW 1341 (ALL)

Mata Transport Pvt. Ltd. v. State of U. P.

2016-04-11

DILIP GUPTA, RAVINDRA NATH KAKKAR

body2016
JUDGMENT The petitioner, which carries on business of transportation of goods, seeks compliance of the order passed by the Commercial Tax Tribunal (the Tribunal) on 17 December 2015 in Second Appeal No. 404 of 2015 by which the appeal preferred by the petitioner under Section 57 of the Uttar Pradesh Value Added Tax Act, 2008 (the Act) was allowed in part and the order of seizure passed by the Assistant Commissioner, Commercial Tax was modified to the extent that the security that was required to be deposited was reduced. 2. It transpires from the records of the writ petition that goods of the petitioner were detained on 15 October 2015 and a show cause notice was issued by the Assessing Officer on 16 October 2015. This notice was received by one Munnawar, a driver working with the petitioner-company. The goods were ultimately seized by order dated 22 October 2015 against which the petitioner preferred a representation under Section 48 (7) of the Act before the Joint Commissioner and by order dated 3 November 2015, the order of seizure was confirmed. It is against these two orders that the petitioner preferred an appeal under Section 57 of the Act. The petitioner seeks compliance of the order passed by the Tribunal. 3. The Assistant Commissioner has informed the petitioner by a communication dated 18 December 2015 that penalty was also imposed upon the petitioner under Section 48 (5) of the Act by order dated 17 November 2015 which order was duly served upon the driver of the petitioner-company on 18 November 2015 and, therefore, it will not be appropriate for the authority to release the goods pursuant to the order passed by the Tribunal. 4. Learned counsel for the petitioner has submitted that once the Tribunal passed an order for release of the goods upon deposit of security and that order attained finality, the authorities cannot under any circumstances retain the goods and have necessarily to release the goods even if an order imposing penalty is passed. However, learned counsel for the petitioner also submitted that since the order dated 17 November 2015 imposing penalty upon the petitioner was never served upon the petitioner, the authorities are not justified in taking that stand. However, learned counsel for the petitioner also submitted that since the order dated 17 November 2015 imposing penalty upon the petitioner was never served upon the petitioner, the authorities are not justified in taking that stand. In support of his submissions learned counsel for the petitioner has placed reliance upon paragraph 8 of the judgment rendered by a learned Judge of this Court in Commissioner of Sales Tax v. M/s Seth Industrial Corporation, Ludhiyana, 1994 UPTC 140. 5. Sri C.B. Tripathi learned counsel has appeared for the respondents and has submitted that the impugned order does not suffer from any illegality. Learned Counsel has, however, placed reliance upon a Division Bench judgment of this Court in M/s Shanker Lal Amar Nath v. Deputy Commissioner of Sales Tax (Executive) and others, 1984 UPTC 441 and has contended that the findings recorded by the Deputy Commissioner for release of the goods are only prima facie findings which do not affect the penalty proceedings in any manner and that while dealing with the penalty proceedings the authorities cannot be guided by any of the observations made in the release order. Learned Standing Counsel has also placed reliance upon a decision in M/s Shiva Timber Concern v. Sales Tax Officer and others, 1990 UPTC 729and upon paragraph 19 of M/s Jagajit Industries Limited v. State of U.P. and others, 1997 UPTC 1011 and has submitted that the order passed for release of goods after depositing security is summary in nature and does not decide the rights of the parties. 6. The petitioner stated that the order dated 17 November 2015 was not served upon the petitioner or his driver, Munnawar on 18 November 2015. The Court required the learned Standing Counsel to produce the original records to verify this position by order dated 31 March 2016. 7. The original records have been produced by the learned Standing Counsel. We find from the records that all the orders / notices including the penalty order were received by Munnawar. In such circumstances, we are not inclined to accept the contention of the learned counsel for the petitioner that since the order imposing penalty was not served upon him, the authorities cannot circumvent the order passed by the Tribunal in not releasing the goods. 8. In the present case, it is not in dispute that an order imposing penalty under Section 48(5) has been passed. 8. In the present case, it is not in dispute that an order imposing penalty under Section 48(5) has been passed. Section 48(5) of the Act is reproduced below: - "If such authority, after taking into consideration the explanation, if any, of the dealer or, as the case may be, the person in charge and giving him an opportunity of being heard, is satisfied that the said goods were omitted from being shown in the accounts, registers and other documents referred to in sub-section (1) of the goods are undervalued to the extent of more than fifty percent of the value of goods prevalent at the relevant time in the local market area where the said transaction had taken place, with intention to evade payment of tax, it shall pass an order imposing a penalty not exceeding forty per cent of the value of such goods, as he deems fit." 9. Section 48(7) of the Act deals with release of the goods subject to furnishing security. The order imposing penalty has not been challenged by the petitioner though it was served upon the petitioner. It is not the case that this order imposing penalty was passed after the order was passed by the Tribunal. In fact, it was passed on 17 November 2015 while the Tribunal passed the order on 17 December 2015. As noted above, in M/s Shanker Lal Amar Nath (supra), the Division Bench observed that the findings recorded, while passing an order for release of goods, does not affect the penalty proceedings in any manner. In fact, as noted in M/s Jagajit Industries Limited (supra) the order for release of goods is merely summary in nature. In this view of the matter we are unable to subscribe to the view taken by the learned Judge. In Commissioner of Sales Tax (supra) on which reliance has been placed by learned counsel for the petitioner. The learned Judge observed as follows: - " It was also contended that the penalty having been levied under Section 15-A (1) (o), the proceeding under Section 13-A (6) became infructuous and the goods could not be ordered to be released. This contention is not correct. The learned Judge observed as follows: - " It was also contended that the penalty having been levied under Section 15-A (1) (o), the proceeding under Section 13-A (6) became infructuous and the goods could not be ordered to be released. This contention is not correct. The proviso to Section 13-A (6) authorises the Commissioner of Sales Tax or such other officer not below the rank of Assistant Commissioner, Sales Tax, to direct that the goods be released without any deposit or depositing such lesser amount or furnishing security other than cash etc. Then, an order passed under Section 13-A (6) is appealable to the Tribunal under Section 10 of the Act. Therefore, the judicial powers cannot be permitted to be pre-empted by passing a penalty order. The authorities concerned retain their power to release the goods in spite of penalty order having been passed." 10. It cannot be doubted that the judicial power of the Tribunal cannot be permitted to be bypassed and that the authorities have to comply with it but at the same time in the instant case an order imposing penalty has also been passed. 11. The petitioner has to initiate appropriate proceedings against the penalty order so that the goods can be released. The petitioner cannot, therefore, insist that the order passed by the Tribunal for release of goods should be complied with. There is, therefore, no illegality in the impugned communication dated 18 December 2015 sent by the Assistant Commissioner to the petitioner. 12. The writ petition, therefore, deserves to be dismissed and is, accordingly, dismissed.