Research › Search › Judgment

Allahabad High Court · body

2023 DIGILAW 2264 (ALL)

M. S. Industries v. Commissioner Commercial Tax

2023-10-04

PIYUSH AGRAWAL

body2023
JUDGMENT Piyush Agrawal, J. Heard Mr. Sundeep Agarwal for the revisionist and Mr. B.K. Pandey, learned A.C.S.C. for the opposite party. 2. The present revision has been filed against the order dated 29.8.2022 passed by the Commercial Tax Tribunal, Ghaziabad in Second Appeal No. 215 of 2022 (A.Y. 2015-16) and the order dated 31.1.2021 passed by Additional Commissioner, Grade-II, Ghaziabad in Appeal No. GHA2/0043/2019 (2015-16) arising out of penalty proceedings under Section 54 of UP VAT Act. 3. The present revision has been admitted on 5.1.2023 on the following substantial question of law:- " Whether the authorities below were justified in levying penalty on the revisionist, when he has no intention to evade the payment of tax?" 4. Brief facts of the case are that the revisionist is a registered proprietorship concerned and engaged in the trading of food grains and spices. The revisionist in the normal course of business purchased chilly seeds from M/s Cauvery Chilies Prakash Nagar Khammam, Telangana. The said goods were accompanying with the tax invoices, G.R. and form 38. However, the goods in question were intercepted and at the time of inspection, it was found that in form 38 the word 'and seeds' were mentioned instead of 'chilli seeds' and on that ground the goods were seized and demand of security to the tune of Rs. 1,98,750/- was made and on deposit of the same the goods were released. Thereafter the revisionist has preferred first appeal against the penalty order dated 16.8.2018 which was rejected by order dated 31.1.2021 and thereafter second appeal was preferred, which was also rejected by the impugned order dated 29.8.2022. Hence the present revision. 5. Learned counsel for the revisionist submits that goods in question were accompanying with all required documents and form 38 was send to the selling dealer and same was filed by the selling dealer and there was no discrepancy in the form with regard to quality and quantity of the goods in question but due to inadvertence the word 'and seeds' was mentioned instead of 'chilli seeds'. He submits that the said discrepancy can be attributed to the selling dealer and not to the revisionist as the revisionist has already send his form 38 to the seller. He submits that the said discrepancy can be attributed to the selling dealer and not to the revisionist as the revisionist has already send his form 38 to the seller. He further submits that the authorities below, on the presumption that form 38 can be re-used as the same was filled with magical ink which can be vanished on high temperature, had seized the goods in question. He further submits that it is nobody's case that the goods were not accompanying with all required documents along with form 38. He further submits that on identical set of fact this Court has dismissed the revision filed by the State vide order dated 9.1.2020 passed in Sales / Trade Tax Revision No. 5 of 2020 as such he prays for allowing the present revision. 6. Per contra, learned Additional Chief Standing Counsel supports the impugned order and submits that in the event the goods were not intercepted and seized, the dealer can re-use the said form and evade the tax liability. He prays for dismissing the present revision. 7. The Court has perused the records. 8. Admittedly, the goods were intercepted during transportation from State of Telangana to Ghaziabad, U.P. and at the time of interception the goods were accompanying with all required documents along with form 38. The purpose of form 38 is that the department should know that the goods are being imported from one State to another State. Some defects were pointed out by the department i.e. the name of the goods was not properly mentioned in form 38 and the allegation was made that the form was filled with magical ink which will be evaporated on high temperature and therefore the presumption has been drawn that the form can be reused. On the said observation, the goods were seized and penalty was imposed. 9. This Court in Sale /Trade Tax Revision No. 5 of 2020 (Commissioner, Commercial Tax, U.p. v. S/S Atul Trading Company decided on 9.1.2020 has held as under :- "The Tribunal held that the assessee by filing photo copies of his account books has proved that transaction was properly entered in his account books. It is also an undisputed fact that the goods were found with all the requisite documents i.e. invoice, bilty and form 38. It is also an undisputed fact that the goods were found with all the requisite documents i.e. invoice, bilty and form 38. The Tribunal has also held that the invoice and bilty were found to be duly filled in proper ink and not with magic ink, as is alleged in respect of Form 38. The Tribunal placing reliance on the judgement of this Court in case of M/s Shree Balaji Concast v. C.C.T., 2016 TLD 20 held that merely on basis of presumption that Form 38 could be re-used, the imposition of penalty is not sustainable in law. The relevant extract from the judgement in case of M/s Shree Balaji Concast, upon which reliance was placed by the Tribunal, is extracted below:- "11.The Act and the Rules does not prescribe the type or the nature of the ink to be used in filling up the prescribed Form.There is no provision under the Act which provide for seizing the goods on account of use of improper ink in filing up the Forms or for the reasons that some of the entries made in the documents would ultimately vanish. 12. It is not the case of the revenue that the goods were not accompanied by proper documents or the transport memo in Form 21 was not duly filled up in ink. In the event the authorities were of the opinion that the entries in Form 21 would vanish, the proper course open for them was to get the Form 21 photocopied and counter signed by the driver or the person incharge of the vehicle to avoid misuse or reuse of the said Form. 13. All entries made in the transport memo stood substantiated by other documents namely the G.R. and weigh slip etc. which were available at the relevant time of issuance of show cause notice. The assessee has produced extract of the copies of the register maintained by it containing entires of dispatch of the aforesaid goods and its receipt by consignee. In view of these documents, it cannot be said that the assessee had committed any illegality in the transportation of the goods and that they were not accompanied by the necessary documents duly filled up. 14. In view of these documents, it cannot be said that the assessee had committed any illegality in the transportation of the goods and that they were not accompanied by the necessary documents duly filled up. 14. In view of the aforesaid facts and circumstances, the question raised above is answered in favour of the revisionist and against the revenue and it is held that the Tribunal committed an error in affirming the order of seizer. The goods were not liable to be seized for the reason that the entries in the prescribed Form accompanying the goods were in such ink as would not last long." Learned counsel for the Revenue submitted that since Form 38 was filed with magic ink and, therefore, there was intention to evade tax. Concededly, at the time of interception of goods, other documents, namely invoices and bilty were also found. These documents were in order. Even Form 38 was found to be duly filled up evidencing the transaction under which the goods were being imported. The assessee had duly produced his books of accounts in which the transaction in question is duly accounted for. In such circumstances, merely on assumption that Form 38 could be re-used, the Assessing Officer was not justified in imposing penalty. Accordingly, the revision is dismissed summarily." 10. In view of aforesaid identical case, the allegation that form which was filled with magical ink can be re-used, cannot be accepted by this Court. 11. In the results, the revision is allowed. The question of law is answered accordingly.