Research › Search › Judgment

Allahabad High Court · body

2022 DIGILAW 474 (ALL)

Commissioner Commercial Tax v. Gaurav Gupta

2022-03-31

PIYUSH AGRAWAL

body2022
JUDGMENT : 1. Heard Shri A.C. Tripathi, learned Standing Counsel for the revisionist and Shri Naveen Chandra Gupta, learned counsel for the opposite party. 2. These revisions have been filed against the judgements & orders dated 04.03.2016 passed by the Commercial Tax Tribunal (Bench-I), Ghaziabad in Second Appeal Nos. 261, 259 & 260 of 2015 for the assessment year 2010-11, in which following common question of law has been framed:- "Whether on the facts & in the circumstances of the case, Commercial Tax Tribunal was legally justified in holding that the opposite party is not a dealer and not liable for payment of tax under the provisions of the U.P. Value Added Tax Act?" 3. Learned Standing Counsel submits that it is admitted case between the parties that the opposite party has taken SLR on lease in the passenger train run by the Northern Railways for transporting/carrying goods of other dealer(s)/person(s) from the station of origin to the station of destination, on which the persons, whose goods are transported, paid the money for such transport. In other words, the opposite party was treated as Railway Container Contractor. Once this fact is admitted between the parties, the opposite party was treated as Railway Container Contractor, then the provisions as provided under the Act and the Rules were required to be fulfilled, i.e., the Railway Container Contractors were required to get themselves registered and follow the procedure for maintaining books of account, relevant forms, as prescribed therein, were required to be filled up and maintained, but the opposite party had, at no stage during the assessment or at the appellate stage, produced any document to discharge its liability. Once the dealer has failed to discharge its liability as provided under the Act, the Tribunal was not justified in accepting the version of the dealer and allowing the appeal by deleting heavy tax imposed upon the opposite party. He prays for allowing the revision. 4. Per contra, learned counsel for the opposite party supports the orders passed by the Tribunal and submits that there is no iota of evidence to show that any taxable goods were found in possession of the dealer so that levy of tax can be justified. At this juncture, he further refers to section 3(8) of the VAT Act providing incident of tax to be levied on possession of taxable goods by the opposite party. At this juncture, he further refers to section 3(8) of the VAT Act providing incident of tax to be levied on possession of taxable goods by the opposite party. He further submits that the primary burden has not been discharged by the Department. Therefore, levy of tax upon the opposite party cannot be justified. He further submits that as per rule 63(4) of the U.P. VAT Rules, records were summoned. On perusal of the records by the Tribunal, no material was found and therefore, the Tribunal has rightly allowed the appeal of the dealer and discharged the liability of tax. He further submits that the Tribunal has rightly interpreted the provisions of the Act and deleted the tax. In support of his submissions, he has placed reliance on the judgement of the Hon'ble Supreme Court in State of Haryana & Others Vs. Sant Lal & Another reported in (1993) 4 SCC 380 (paragraph no. 19) and prays for dismissal of the revision. 5. Heard learned counsel for the parties and perused the records. 6. Admittedly, all the respondents in these revisions have taken SLR's on lease in the Passenger Trains from Northern Railways for transporting/carrying the goods of the person(s) or dealer(s) from the station of origin to the station of destination and charged transportation charges. It is also admitted between the parties that the said activity of the respondents fall or can be classifiable as a Railway Container Contractor as described under section 2(h)(ix) of the U.P. VAT Act as "dealer", as person, who carries on in Uttar Pradesh, a business of distributing goods, directly or indirectly, for cash or deferred payment or for commission, remuneration or other valuable consideration. Section 17 of the VAT Act provides for registration of dealers. Sub-section 6(a) thereof, provides that no Railway Container Contractor shall operate its business of taxable goods in the State without being registered with the registering authority in such manner as may be prescribed. 7. Admittedly, in the normal course of business, the respondents were transporting goods for and on behalf of the person, who sends its goods through SLR of the respondents, from the station of origin to the station of destination. 7. Admittedly, in the normal course of business, the respondents were transporting goods for and on behalf of the person, who sends its goods through SLR of the respondents, from the station of origin to the station of destination. Certain provisions of the UP VAT Act as well as UP VAT Rules, which are relevant for consideration of the issue involved in the present revisions, are quoted herein-below:- "Section 2(h): "dealer" means any person who carries on in Uttar Pradesh (whether regularly or otherwise) the business of buying, selling, supplying or distributing goods directly or indirectly, for cash or deferred payment or for commission, remuneration or other valuable consideration and includes, (ix) a railway container contractor, an air cargo operator, a courier service provider, who fails to disclose the name and complete address of consigner or consignee or if discloses such name or address of consigner or consignee is found bogus, forged or not verifiable, or the owner or person in-charge of a vehicle who obtained authorization for transit of goods from the officer in-charge of entry check post but failed to deliver the same to the officer in -charge of the exit check post; 17. Registration of dealers: (6) (a) No railway container contractor, air cargo operator, courier service provider, or owner or person in-charge of a godown, cold storage or warehouse other than transporter who stores commercial goods, shall operate its business of taxable goods in the State without being registered with the registering authority in such manner as may be prescribed. Registration of dealers: (6) (a) No railway container contractor, air cargo operator, courier service provider, or owner or person in-charge of a godown, cold storage or warehouse other than transporter who stores commercial goods, shall operate its business of taxable goods in the State without being registered with the registering authority in such manner as may be prescribed. Any operator of such business shall apply within prescribed period for his registration to the registering authority in the prescribed manner; Rule 38: Registration of railway container contractor, an air cargo operator, a courier service operator, owner or person incharge of godown or cold storage or warehouse other than transporter: 8(a): Where a railway container contractor, an air cargo operator or a courier service provider, receives any goods from any person for carrying to any destination, he shall require the person to submit a declaration in Form XVII and like wise where a railway container contractor, an air cargo operator or a courier service provider receives any good for delivery he shall obtain declaration in Form XVIII from the person to whom goods are delivered; Rule 38(9): Every a railway container contractor, an air cargo operator or a courier service provider or an owner or person incharge of godown or cold storage or warehouse other than transporter or carrier shall preserve all records maintained by him for a period of 8 years after the expiry of the assessment year to which they belong." 8. Section 2(h)(ix) of the VAT Act provides the and at the person operating as a Railway Container Contractor shall be deemed to be a dealer and is obliged to provide complete details and address of the consignor and consignee name and address, etc. Further, as per the provision of section 17 of the VAT Act, the Railway Container Contractor is required to get itself registered under the Act, failing which shall not operate its business within the State. Rule 38(7) of the VAT Rules prescribes for maintenance of record. Rule 38(7)(a) of the Rules further provides register in respect of all consignment and goods received by the Railway Container Contractor for transportation and storage is required to be maintained and before receiving the goods, require to obtain declaration in Form - XVIII and before delivery is required to obtain declaration in Form - XX from the owner of the goods. Further, Rule 38(9) of the VAT Rules provides to preserve all records maintained by the Railway Container Contractor for a period of 8 years after expiry of the assessment order, to which they belong. 9. From the perusal of the aforesaid provisions, it is amply clear that the Railway Container Contractor is deemed to be a dealer and is required to get itself registered within the State for transporting the goods. Further, the provisions provide for disclosure of various details, failing which it should be deemed to be the dealer and is liable to be taxed for transportation of goods. Section 3(8)(1) of the Act is quoted below:- "Section 3: Incidence and levy of tax:- (3) 8(i) A railway container contractor, an air cargo operator, a courier service provider, who fails to disclose the name and complete address of consigner or consignee or if discloses such name or address of consigner or consignee is found bogus, forged or not verifiable; or the owner or person in-charge of a vehicle who obtained authorization for transit of goods from the officer in-charge of entry check post but failed to deliver the same to the officer in-charge of the exit check post." 10. The aforesaid provision provides for incidence and levy of tax, who fails to disclose the name and complete address of consigner or consignee or if discloses such name or address of consigner or consignee is found bogus, forged or not verifiable. 11. It is nobody's case that the goods during the disputed period/year have not been transported through SLR taken on lease by the respondents. Once this fact is admitted between the parties, the first appellate authority has remanded the matter to the assessing authority empowering to provide an opportunity to the respondents to clarify their position on facts as the assessment order was passed ex parte. The Tribunal, against the remand order, has just allowed the appeal of the respondents by just referring to the provisions of the Act. Further, the Tribunal has observed that on record, there is no information of transport of goods by SLR and therefore, deleted the levy of tax. The Tribunal, against the remand order, has just allowed the appeal of the respondents by just referring to the provisions of the Act. Further, the Tribunal has observed that on record, there is no information of transport of goods by SLR and therefore, deleted the levy of tax. Once a fact is admitted by the respondents that SLR was taken on lease for transporting the goods, as per the provision was required to take registration and further all the details of the person(s) for whom the goods were transported from the station of origin to the station of destination were required to be maintained by the respondents. The Tribunal ought to have called for the records of the respondents and should & must have recorded a finding of fact after due verification of the books of account. The Tribunal, before passing the final order, should/must have called for the report from the Assessing Authority of the respective dealer on the books of account produced in support of the claim by the respondents. The Tribunal has failed to do so and just calling for the record of the Department and making certain observations cannot be sustained in the eyes of law. 12. It is not the case of the respondents that the SLR was neither taken on lease nor any transportation in the disputed year has been undertaken by them. The Tribunal has shifted the burden on the Revenue in the impugned order and has held that the Revenue has failed to bring on record any taxable goods being transported through SLR taken on lease by the respondents. This observation of the Tribunal is perverse and liable to be set aside. 13. The Tribunal should have kept in mind that the present proceedings are regular proceedings and not reassessment proceedings for which the burden is upon the Revenue for placing materials for escapement of assessment. Since it is a regular assessment for non-payment of tax or there is not liability of tax, it is incumbent upon the dealers to produce such material/such record or other evidence to support their claim. 14. In the event of failure on the part of the dealer to produce such evidence, the assessment order cannot be set aside by merely referring the provision of the Act, which, otherwise, supports the claim of the Revenue. 14. In the event of failure on the part of the dealer to produce such evidence, the assessment order cannot be set aside by merely referring the provision of the Act, which, otherwise, supports the claim of the Revenue. In other words, the language of the provision is very clear and straight. 15. The person, who is doing/operating as a Railway Container Contractor has to follow and abide its activity as per the provision of the U.P. VAT Act, which was enforced in the relevant disputed years. Once the provisions of the VAT Act are applicable upon the respondents to claim any benefit or non-taxable, the respondents are required to produce all the documents, forms, books of account, etc. as prescribed under the Act. 16. In the event of failure by the respondents, the levy of tax cannot be said to be unjustified, but the Tribunal, in the case in hand, has just referred to the provisions and passed the impugned order deleting levy of tax upon the respondents without verifying any books of account or material. 17. In view of the aforesaid facts & circumstances of the case, the impugned orders passed by the Tribunal are set aside. The matter is remanded back to the Tribunal to reconsider the matter afresh in the light of the observations made above and decide the same in accordance with law. 18. The revisions are allowed. The question of law is answered accordingly. 19. It is expected that since the matter is very old, the Tribunal may take all possible effort to decide the same within a period of three months from the date of receipt of a copy of this order. 20. The revisionist undertakes to serve the copy of this order within a month from today. In the event of failure on the part of the revisionist, the benefit of this order shall not be accorded to the revisionist.