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2024 DIGILAW 560 (UTT)

Ansar Ali v. State of Uttarakhand

2024-08-20

RAKESH THAPLIYAL, RITU BAHRI

body2024
JUDGMENT : RITU BAHRI, C.J. 1. The appellant M/s Ansar Ali, have come up in the appeal against the order dated 02.04.2014, whereby the Commercial Tax Tribunal, Dehradun Bench, has allowed the appeal, and set aside the judgment and order dated 19.06.2012 and cancelled the assessment order dated 07.09.2011, passed by the Assessing Authority. 2. The brief facts of the case are that the revisionist/assessee is engaged in the business of different types of taxable imported goods from outside the State into the State of Uttarakhand. The revisionist after importing the goods from outside the State i.e. from Delhi, the assessee has taken the S.L.R. (Railway Wagon) on lease from Indian Railways under agreement and the goods have been brought into the State of Uttarakhand by Train No. 331 Delhi-Haridwar passenger train. The goods related to the assessment year 20082009. The assessee has brought 20,948 consignments weighing about 10,34,580 kilograms of different goods from Delhi to Roorkee. The goods were got released by the assessee or his representatives at Roorkee Railway Station. Since the revisionist was not registered in the State, he was required to give import declaration forms XVI/XVII, he was issued a show-cause notice to show cause for making the assessment for the sale of imported goods inside the State. The Assessing Authority vide assessment order dated 01.09.2009 under section 26 of the Act, fixed the taxable turnover exparte on the basis of best judgment at Rs.20,94,80,000/-, and thus created the tax liability for Rs.1,90,62,680/-. The revisionist/assessee made an application under section 31, and thereafter the case was reopened and after rehearing the case, the Assessing Authority vide assessment order dated 07.09.2011, assessed the same taxable turnover as well as tax. The assessee/revisionist went in the appeal before the learned J.C. (A) and who vide judgment and order dated 19.06.2012, allowed the appeal and deleted the assessed tax for the assessment year 2008-2009. 3. Against the above said order, the revenue went in the appeal before the Tribunal. The learned Tribunal proceeded to examine the issue involved in the appeal. The first issue was whether the revisionist/assessee is a dealer or not. The learned Tribunal refers to the Railway Act 1890 or Act 1989 being a central Act. 3. Against the above said order, the revenue went in the appeal before the Tribunal. The learned Tribunal proceeded to examine the issue involved in the appeal. The first issue was whether the revisionist/assessee is a dealer or not. The learned Tribunal refers to the Railway Act 1890 or Act 1989 being a central Act. In paragraph 8 of the order, it has been observed that the Ministry of Finance, Government of India, after a series of the deliberations, the Railways decided to issue permits (permission letters), in late eighties from the office of DRM concerned in favour of the Tax Officers, to keep the extracts of records kept in goods/parcel office of the Railways. The Railways Board issued an order dated 16.10.1985 to the effect that the Tax Officers get the extracts of Railways parcel/goods records but most of the addresses of the consignors and those of consignees were found fake. The issue was again taken up at the level of the Empowered Committee of State Finance Ministers, New Delhi. A joint Committee of the Ministry of Railways and the Ministry of Finance (Department of Revenue) was set up. The Ministry of Railways in the letter dated 25.05.2006, addressed to the General Manager (Comml.). The General Manager (Optg.) issued clear-cut orders that: “(1) Clear and complete address of consignors as well as consignee should be mentioned on the Forwarding note and Railway Receipt. Sales Tax Registration Number/TIN will be obtained from the consignors and the same should be endorsed on the Forwarding Note and Railway Receipts. (2) In case of consignments where consignors gives declaration that the consignment is 'not of sale' then no Sales Tax Registration Number or TIN will be mentioned in the Forwarding Note as well as Railway Receipts. In such a case declaration should be given on Forwarding Note and also incorporated in the Railway Receipt. (3) The name and complete address of the consignee or the person taking delivery on the time of delivery of goods should be obtained.” 4. Subsequently, the State Government also took initiative and established Railway Check Posts on important Railways Stations. In Uttarakhand, six check posts were established with the permission of the Railways at Kashipur, Rudrapur, Haldwani, Dehradun, Haridwar and Rishikesh. The check posts were not functional, but the number of mobile squad units have been deployed to check the evasion. 5. Subsequently, the State Government also took initiative and established Railway Check Posts on important Railways Stations. In Uttarakhand, six check posts were established with the permission of the Railways at Kashipur, Rudrapur, Haldwani, Dehradun, Haridwar and Rishikesh. The check posts were not functional, but the number of mobile squad units have been deployed to check the evasion. 5. The Tribunal after observing that the Railways changed its strategy and the space available for the transport of goods/parcels in passenger/express trains were leased out to private players in this field. The lease agreements on daily lease rent basis for the space available in SLR coach/guard cabin in all the long route important passenger/express trains were made. With respect to the present revisionist, the Tribunal observed that it was an unregistered with the Department, he had gone into an agreement with the Railways for transporting the goods into the space available in SLR coach in Train No. 331 Delhi-Haridwar passenger train. However, he never kept any record whatsoever from which the names and addresses of consignorss and consignees may be verified/identified and that is why the assessment proceedings against the revisionist/assessee were initiated by the Department assuming that all the goods were brought into the State by the revisionist/assessee himself just to evade the tax on the goods. 6. Vide notification no. 829/2012/181(120)/XXVII (8)/2008, dated 13.09.2012, the Rules were further amended and the transporters were made more accountable, responsible and answerable to the Department in respect of the goods transported. As per the above said notification, during the movement of the goods, the transporters will carry with him duly signed two copies of “Lorry Challan/E-generated Lorry Challan” document of title to goods/GR/bilty, invoice/challan etc. and the copy of the Lorry Challan shall be preserved by the transporter till the end of two financial years. It is further observed that provisions of section 49 (3) were done away by deleting the same by notification dated 13.09.2012, and notification dated 17.12.2012 with effect from 01.03.2013. 7. The revisionist/assessee has brought goods from outside the State through Railways on the basis of the lease agreement, but has not kept any accounts from which the authenticity of the consignors, consignees and details of goods etc., might be verifiable/identifiable. 7. The revisionist/assessee has brought goods from outside the State through Railways on the basis of the lease agreement, but has not kept any accounts from which the authenticity of the consignors, consignees and details of goods etc., might be verifiable/identifiable. After bringing the goods to the destination point, the declaration forms along with bill/beejak/challan/bilty etc., have neither been put up for endorsement on any Railways Check Posts nor surrendered in any circle office of the Department before giving the delivery of goods to the consignees, and in this backdrop, the Assessing Authority had to initiate assessment proceedings against the assessee to be a dealer himself of the imported goods. Hence, the Assessing Authority had rightly held the assessee to be a dealer under section 2 (11) and the provisions laid down under section 3 (7) (b) and section 15 (3) of the Act. It is not the case of the revisionist that the notification dated 13.09.2012 as referred to in paragraph 14 of the Tribunal orders is not applicable today. As per the above-said notification the transporter during the movement has to carry with him duly signed two copies of “Lorry Challan/E-generated Lorry Challan” document of title to goods/GR/bilty, invoice/challan etc. 8. The above-said documents were required to be in possession of the assessee/revisionist for next two years and being a registered, and even as per the Ministry of Railways letter dated 25.05.2006, as referred to above, it has been laid down that year and complete address of the consignors as well as consignee has to be mentioned on the forwarding note and if the dealer is not registered he did not mention the registration number/TAN. In the State of Uttarakhand, the check posts have already been established at Kashipur, Rudrapur, Haldwani, Dehradun, Haridwar and Rishikesh, and if they are non functional, then mobile squad have been deployed. 9. Since the revisionist/assessee was registered with the Railways and had a SLR, he is bound by the letter dated 25.05.2006, issued by the Ministry of Railways and Notification dated 13.09.2012. He had registered with the Railways and in this backdrop he was transporting goods from Delhi to Uttarakhand, the only evidence, which he was supposed to carry was names and complete address of the consignee and the person taking the delivery. He had registered with the Railways and in this backdrop he was transporting goods from Delhi to Uttarakhand, the only evidence, which he was supposed to carry was names and complete address of the consignee and the person taking the delivery. When notice was issued by the Assessing Authority even at that time he could have produced that record and he have never maintain any record. Hence, the procedure sat down by the Ministry of Railways and the letter dated 25.05.2006 and the Notification dated 13.09.2012, has been violated by the assessee/revisionist, and in this backdrop, the Assessing Authority had no other option but to initiate the proceedings, and after going through the evidence given by the assessee, the imposition of the tax has been made. The assessee did not produce the declaration form before any railway check posts nor before any circle office of the Department before giving the delivery of the goods to the consignees. Hence, he was deemed to be a dealer and had the imported goods from Delhi and without any evidence an attempt had been made to evade payment of tax. 10. The Tax Department had simply asked the assessee/revisionist to furnish the correct verifiable/identifiable details of the consignors and consignees and description of the goods loaded in the SLR which the assessee did not furnish. 11. In the facts of the present case, the goods related to the assessment year 2008-2009, and proceedings for assessment for sale of the imported goods outside the State were initiated and vide assessment order dated 01.09.2009 under section 26 of the Act, on the basis of best judgment fixed the taxable turnover of tax liability of Rs.1,90,62,680/-, was created. 12. The issue to be examined is whether the Notification dated 13.09.2012 can be made applicable in the case of the present revisionist, whose goods were seized way back in the year 2008-2009. As per the Notification dated 13.09.2012, the transporter during movement has to carry with him duly signed two copies of “Lorry Challan/E-generated Lorry Challan” document of title to goods/GR/bilty, invoice/challan etc. 13. The present revisionist has been registered with the Ministry of Railways, and as per the letter dated 25.05.2006, he is bound to keep the complete address of the consignors as well as the consignee. 13. The present revisionist has been registered with the Ministry of Railways, and as per the letter dated 25.05.2006, he is bound to keep the complete address of the consignors as well as the consignee. When he was issued a show-cause notice before the assessment order dated 01.09.2009, and on that date, the Notification dated 13.09.2012, was not existing. Hence, the case of the revisionist has to be examined in view of the provisions of the Act applicable on the date when the assessment order was passed on 01.09.2009. In the present case, the provisions of section 49 (3) were done away by deleting the same by Notifications dated 13.09.2012 and 17.12.2012 with effect from 01.03.2012. Section 49 (3) of the Act, reads as under: “(3) Nothing contained in this section shall be construed to impose any obligation on any railway administration or railway servant or post office or any officer of post office, or to empower any search, detention or seizure of any goods while on railway as defined in the Indian Railways Act, 1890, or in a post office as defined in the Indian Post Office Act, 1898.” 14. For all intentions and purposes on the date when show-cause notice was issued by the Assessing Authority for the incident relating to the assessment year 2008-2009, the above said notification were not in operation. Hence, the revisionist is only bound by the provisions of Section 49 (3) of the Act, which was applicable on that date. 15. The law which was applicable with respect to the definition of the word dealer and whether the non production of the documents relating to the title of the goods i.e. duly signed two copies of “Lorry Challan/E-generated Lorry Challan” document of title to goods/GR/bilty, invoice/challan etc., could be made basis to assess tax liability has already been considered by the Hon’ble Supreme Court in various judgments. 16. The reference can be first made to the judgment reported in State of Haryana and others Vs. 16. The reference can be first made to the judgment reported in State of Haryana and others Vs. Sant Lal and others, 1993 INSC 292 where the Hon’ble Supreme Court whereby at the time of the dismissing the appeal filed by the State of Haryana against the judgment of Division Bench of the Punjab and Haryana High Court, whereby the provisions of Section 38 of the Haryana General Sales Tax Act, 1973, were held to be ultra vires, was upheld and the appeal filed by the State was dismissed. Section 38 of the Act, dealt with furnishing of the information by clearing or forwarding agent, who are the agent only tranporting the goods of the consignors, who has sold the goods and the assessee was only engaged for transporting the goods from the consignors to the consignee. Section 38 of the Act, reads as under: “38. Furnishing of information by clearing and forwarding agents, etc. (1) Every clearing or forwarding agent, Dalal or any other person transporting goods, within the State, who, during the course of his business, handles documents of title to goods for or on behalf of any dealer, shall furnish to the assessing authority the particulars and information in respect of the transactions of the goods in such form and manner, as may be prescribed. (2) No clearing or forwarding agent, Dalai or any other person transporting goods within the State shall carry on his business unless he obtains from the assessing authority, on payment of a fee not exceeding fifty rupees, a licence in the form and manner and subject to such conditions as may be prescribed. (3) If any clearing or forwarding agent or Dalai or person transporting goods within the State contravenes the provisions of Sub-section (1) or Subsection (2), the Commissioner or any person appointed to assist him under Sub-section (1) of Section 3 may, after giving the person concerned a reasonable opportunity of being heard, direct him to pay by way of penalty, an amount equivalent to twenty per centum of the value of goods in respect of which no particulars and information has been furnished under Sub-section (1). Explanation - For the purpose of this section: (i) “Dalal” shall include a person who renders his services for booking of, or taking delivery of, consignments of goods at a Railway. Explanation - For the purpose of this section: (i) “Dalal” shall include a person who renders his services for booking of, or taking delivery of, consignments of goods at a Railway. Station booking agency, goods transport company office, or any place of loading or unloading of goods or contrives, makes and concludes bargains and contracts for or on behalf of any dealer for a fee, reward, commission, remuneration or other valuable consideration or otherwise. (ii) “person transporting goods shall, besides the owner, include the manager, agent, driver, employee of the owner or person incharge of a place of loading or unloading of goods or of a Railway out-agency, city booking office or city booking agency, when run by a private person under a contract with the Railways but excluding a rail head or a post office, or of a goods carrier carrying such goods, or a person who accepts consignments of such goods for despatch to other places or gives delivery of any consignment of such goods to the consignee.” 17. The Hon’ble Supreme Court affirm the findings given by the Punjab and Haryana High Court that the forwarding agent or the Dalal or the person transporting the goods is indeed reasonably and promplty connected with the transport of the goods and has no role to play in sale of the goods. Hence, he is not liable for tax liability. For clearing and forwarding agents, Dalal and other persons transporting the goods do not handle no application at all, the State has no power of legislation under the legislature of entry concerned to assess them for tax liability, if they do not carry the documents of the owner and the consignee. The clearing agent is not to handle the booking or the seat of the goods, which may have been sold. In paragraph 20 of the judgment, the Hon’ble Apex Court has observed as under: “20. There can be no doubt that the State Legislature would be entitled to impose sales tax upon a person who carries on the business of selling goods and who has in the customary course of business authority to sell goods belonging to the principal. In paragraph 20 of the judgment, the Hon’ble Apex Court has observed as under: “20. There can be no doubt that the State Legislature would be entitled to impose sales tax upon a person who carries on the business of selling goods and who has in the customary course of business authority to sell goods belonging to the principal. A clearing or forwarding agent, 'dalal' or person transporting goods does not carry on the business of selling goods and does not have, in the customary course of his business, authority to sell goods belonging to the dealer whose goods he books or receives. As we have already stated, there has to be a reasonable and proximate connection between the transaction of sale and the clearing or forwarding agent, 'dalal' or person transporting goods before the State Legislature can, in exercise of the power to levy sales tax, enact legislation concerning him. We are not satisfied that there is such close and direct connection between the transactions of sale of goods by a dealer and the clearing or forwarding agent or 'dalal' who books or receives such goods or a person who transports such goods within the meaning of the said Section 38.” 18. The Hon’ble Allahabad High Court in the judgment delivered on 22.07.2019 in the matter of Prince Road Lines Vs. The Commissioner of Commercial Tax, Uttar Pradesh was examining the case of an assessee, who was engaged in the activities of transportation of the goods. In that case, a survey was conducted in the premises of the assessee and during the survey builty books found were examined, and those disclosed transportation of large quantities of empty LPG cylinders. However, the names and other details of the consignor and the consignee involved in such transaction were not fully recorded. 19. The Hon’ble Allahabad High Court after examining the provisions of Section 8-A and sub-section (5) of the Act, and section 13 (2) of the Act, held that non production of the documents of the ownership would go against the dealer only if the goods are under transportation and before they reach the destination are seized, and once the goods have completed their journey, there is no jurisdiction remaining with the authority to act in exercise of powers under Section 8-A (5) of the Act, and to demand those documents. Even, if there is an obligation on the transporter to carry such document at the time of the transportation of the goods, it would not be enough to reach to the conclusion that in an event of the breach of the same a rebuttable and irrebuttable presumption may arise as to occurrence of a taxing event taking place at the hands of the transporter. In paragraph 15, the Hon’ble Allahabad High Court observed as under: “15. As to the facts of the case, in absence of any material or evidence being brought on record to establish that though the assessee was a transporter but had engaged in trading in goods, again it could never be said that the assessee was liable to pay tax. It was for the revenue to have brought evidence to establish that the assessee had engaged in trading activity. That evidence being lacking the best judgement assesment and quantification of turnover are found to be with no legs. The question of law is answered in favour of assessee-revisionist and against the revenue-respondent.” 20. From the judgment of the Allahabad High Court an another thing which is clear is that the production of the title documents are required to be produced by the dealer/transporter when the goods are inspected during travel, but not if it is reached there destination. 21. There is another case of the Allahabad High Court reported in Satish Chandra Mittal Vs. Assistant Commissioner (Assessment), Trade Tax, Hapur, 2007 SCC Online All 2376 in this case the assessee was a booking agency at Hapur, District Ghaziabad, and certain consignments of goods were received in Hapur, and were released by petitioner from the petitioner’s agency office to the persons carrying counterfoil of the goods receipt. The Tax Department on verification found that some of these consignees were not residing or carrying on business at the address mentioned in the goods receipt, and in this backdrop notice was given to the petitioner who was a city booking agency. 22. The defence taken by the assessee was that such goods are normally released (1) by the Railways at the railway station or parcel office (2) that city booking agency at their office to the person appearing at the office for taking delivery along with goods receipt. 22. The defence taken by the assessee was that such goods are normally released (1) by the Railways at the railway station or parcel office (2) that city booking agency at their office to the person appearing at the office for taking delivery along with goods receipt. Therefore, neither the Railways and nor the city booking agency under an obligation to physically verify the address of the consignee or consignors. Even the consignors normally deliver the consignments to the Railways at their booking office and normally consignments are not collected by the railways from the residence or place of business of the consignors. 23. Hence, keeping in view the above facts, the notice issued to the city booking agency were set aside as no case was made out that non production of the name of the consignors would amount to evasion of tax. In this judgment, which has been further observed that the Trade Tax Department can put check-posts at the city booking agency or outside the railways stations for examining the address proof of the consignees along with consignments at the time of the booking goods with the Railways for avoiding problems in the future. 24. In the present case, after the Notification of 13.09.2012, and 17.12.2012, the State of Uttarakhand had established check-posts at Kashipur, Rudrapur, Haldwani, Dehradun, Haridwar and Rishikesh, and if they are non functional, then mobile squad has also been deployed. In the case of the revisionist when the goods were transported, there was no checking done on the way as the goods were being transported on the railways coach, and hence, there was no checking done during the transportation of these goods, and hence, as per the judgment referred to above by the Hon’ble Supreme Court as well as by the Hon’ble Allahabad High Court, when there no checking was done during the transportation of the goods, the revisionist being a transporter of the goods cannot be liable to pay tax, if he has not produced the evidence of the name of the consignors and consignees. 25. As per the judgment of the Hon’ble Supreme Court, the present revision is being allowed. The order dated 02.04.2014, passed by the Commissioner Tax Tribunal, Dehradun Bench, Dehradun is set aside, and the order passed by the JCA dated 19.06.2012, is being upheld.