JUDGMENT
R.B. Misra, J.
These trade tax revisions have been preferred under Section 11 of the U.P. Trade Tax Act, 1948 (in short called “the Act” hereinafter) against the order dated February 15, 2002, passed in Second Appeal No. 75 of 2002 (2001-2002) under Section 13-A(6) of “the Act”. The revision No. 141 of 2002 has been preferred by the applicant/revisionist whereas the Revision No. 122 of 2002 has been preferred by Commissioner of Trade Tax. The Second Appeal No. 75 of 2002 passed by order dated February 15, 2002 has partly been allowed and the order dated December 18, 2001 was modified and the seizure of the goods was reaffirmed.
1. Heard Sri Rakesh Ranjan Agrawal, learned counsel for the applicant/revisionist (M/s. Panipat Indore Transport Co.) in Trade Tax Revision No. 141 of 2002 and Sri B.K. Pandey, learned Standing Counsel for the applicant/revisionist (Commissioner of Trade Tax, U.P., Lucknow) in Trade Tax Revision No. 122 of 2002.
2. The brief facts necessary for adjudication of the revisions are that on May 19, 2001 the Trade Tax Officer, Mobile Squad, intercepted the vehicle No. MP-07/G3868 at Agra-Delhi Road, on the basis of information that the goods loaded in vehicle, after obtaining the transit pass issued from the Kotwan Check-post, will not cross the territory and goods therein shall be sold within the State of U.P. On physical verification, it came to light that 403 items of different variety were declared, in trip sheet whereas 468 pieces of different variety were found loaded in the truck. The number of bilti and private marks mentioned in the accompanying documents were not found; 173 pieces of goods were not declared in the trip sheet. The goods were found different from those declared in the accompanying documents and trip sheet and some of the goods declared in the trip sheet were not found physically present in the vehicle and many other discrepancies were also noticed. On inquiry made relating to consignors and consignees of the goods, none of them were found registered whereas Central sales tax at 4 per cent was charged on the bills, which could be charged only by the registered dealers only therefore, a show cause notice was issued and after considering the reply the trade tax authorities seized the goods on November 2, 2001 and demanded a security of Rs. 6,68,183 on the estimated value of Rs. 16,48,863.
3. The application of applicant/revisionist under Section 13-A(6) of “the Act” was also rejected against which the Second Appeal No. 75 of 2002 was filed before Tribunal.
4. The Tribunal by order dated February 15, 2002 while partly allowing the Second Appeal No. 75 of 2002 (2001-2002) and modified the order dated December 18, 2001 passed by the Assistant Commissioner (Enforcement), Trade Tax, Agra, and affirmed the seizure of goods and further directed to release the goods forthwith in favour of the company transporter after obtaining a cash security of Rs. 92,500. Learned Tribunal in its order dated February 15, 2002 has held in paras 6, 7, 8 and also 9 of the judgment which are referred as below:
“6. It is significant to note that the transit pass was got issued from the entry check-post Kotwan on the basis of bogus bills inasmuch as the consignors and consignees were not found registered respectively with the Delhi and Gwalior sales tax authorities on inquiry made by T.T.O. (Mobile Squad). It is not disputed that in the bills, C.S.T. was charged at 4 per cent which could be charged only by the registered dealers and the consignors were not found registered with the respective department. This shows that the bills accompanied with the goods were not genuine and did not relate to any bona fide dealer. Not only this the transportation of the goods was declared from Delhi to Gwalior, but even the consignees of Gwalior were found bogus in the inquiry.
7. It is also borne out on record that during the physical verification, no goods were found as per accompanied bills and bilties inasmuch as on some of the goods, such bilti numbers and private marks were mentioned, which did not relate to the documents accompanied with the goods. Besides some of the goods were found in excess to the goods declared in the trip sheet and some of the goods which were declared in the trip sheet were not found physically in the vehicle. The explanation of the appellant that due to mistake of labourers, the goods of other vehicle was loaded in this vehicle and due to mistake of clerk, the bills relating to other vehicle were annexed with the bills of disputed vehicle appears to have been a fake explanation of the appellant, as it is not supported by any evidence on record. The appellant failed to explain that the documents of which the goods were not found in the disputed vehicle, related to which vehicle. Therefore it appears to be a false tale concocted by appellant to save himself from the consequences of breach of law.
8. A perusal of the impugned order reveals that the bills and bilties submitted for the excess goods for issuing fresh transit pass, too appear bogus and no explanation has been given by the appellant to rebut the adverse conclusion of the T.T.O. (Mobile Squad) that bill No. 823 dated May 18, 2001 of M/s. Payal Electronics, Chandani Chowk, New Delhi, was submitted at the Kotwan check-post and another bill No. 4200 dated May 18, 2001 of the same consignor was submitted covering some of the excess goods before the Trade Tax Officer (Mobile Squad). Therefore, it appears incredible that the alleged consignor would have issued 3377 bills in the same day. The contention of the appellant also appears incredible that due to mistake of labourers, some goods of other vehicles were loaded in the disputed vehicle.
9. As regards the objection of off route transportation of the goods, the contention of the appellant that the vehicle came to Agra to give the details of freight, etc., to the owner of the vehicle who resides in Vijay Nagar Colony, Agra, too appears to have rightly rejected by the authorities below, as there is no evidence in this behalf. Besides as per registration of the vehicle, the owner of the goods was found of Gwalior. The statements, given by the driver before the T.T.O. (Mobile Squad) show that the driver came to Agra along with vehicle because of the death of his maternal uncle. All these facts are contradictory to each other, which goes to belie the stand of the appellant and to strengthen the stand of the department that the goods were brought into the State with an intention to sell it off, to evade the tax. The conclusions of the authorities below further stand supported by a fact that during the physical verification, one some of the packages of the goods, word Agra was found mentioned. Not only this, the S.R. numbers mentioned on goods were different from the G.Rs. accompanied with the goods, whereas the S.R. numbers and marks found on the excess goods were as per the bills and bilties submitted later on after checking of the goods. All this shows that the appellant submitted bogus bills and the goods in dispute were meant for sale in U.P. Therefore, in view of the decisions, relied upon by the learned A.C. (Enforcement) in the impugned judgment, we feel that the seizure of the goods appears to have rightly been made and has rightly been affirmed by the learned AC (Enforcement).”
5. Learned Tribunal has referred and relied on Mahboob Khan Khwaj Mohammad and Co. v. Commissioner of Sales Tax 1999 UPTC 1208 where the demand of the security at 6 per cent was held justified where the goods were not accompanied by proper and genuine documents and also in the light of the judgment of Sondhi Parcel and Containers Services v. Commissioner of Trade Tax 2001 UPTC 787 where the goods were found in excess to those declared in the transit pass, this Court has held that ultimate finding of facts could be arrived in the penalty proceedings but the amount of security fixed at 10 per cent of the value of goods was justifiable. In view of above judgments a security of 10 per cent on the value of the goods of Rs. 5,50,000 declared in the trip sheet and at 15 per cent on the value of Rs. 2,50,000 found in excess, was imposed by the learned Tribunal.
6. In the facts and circumstances following questions of law have been submitted for consideration :
“(i) Whether, on the facts and circumstances of the case, the Tribunal was correct to estimate the total value of the goods at Rs. 8,00,000 (i.e., Rs. 5,50,000 and Rs. 2,50,000) for the goods declared in trip sheet and the goods found in excess as against the value of Rs. 5,77,271 (i.e., Rs. 3,95,612 for the goods declared in trip sheet and Rs. 1,81,659 found in excess)?
(ii) Whether the learned Trade Tax Tribunal was correct to direct the applicant to deposit security on those goods also which were covered with trip sheet ?
(iii) Whether the learned Tribunal was correct to direct the applicant to deposit security equivalent to 15 per cent of the value of Rs. 2,50,000 in respect of the goods found in excess specially when the applicant prayed for issuance of modified trip sheet before the Trade Tax Officer, Mobile Squad ?
(iv) Whether the learned Tribunal was correct not to consider that the Trade Tax Officer, Mobile Squad, had no jurisdiction under Rule 87(3) to check the goods covered with form XXXIV while in transit and before it reaches the exit check-post?
(v) Whether the learned Tribunal being the court of last fact finding authority was correct not to consider the circumstances why the truck stopped at Jatnibagh and North Vijay Colony, Agra ?
(vi) Whether the learned Tribunal rightly did not adjudicate that the provisions of Section 28-A of the Act were not applicable in the present case ?
(vii) Whether the learned Trade Tax Tribunal was correct to direct the applicant to deposit cash security of Rs. 92,500 for the release of the goods in absence of the finding that the applicant had imported the goods with declaration?”
7. Learned counsel for the petitioner has placed reliance on the judgment 2001 UPTC 349 (Commissioner of Trade Tax v. Ravi Traders, Jhansi), where even for omission to mention 55 bags of Arhar in trip sheet, this Court has directed the Tribunal to release goods, after allowing entering of 55 bags of “Arhar” in trip sheet and to check the same at the exit check-post and further directed to issue form No. XXXIV to the transporter.
8. In 2001 UPTC 975 (Commissioner of Trade Tax v. Mohan Roadlines, Gwalior, M.P.) where the transporter applied for form No. XXXIV however Check-post Officer seized the goods on the ground that the consignment was likely to be sold in the State of U.P. where the directions of the Tribunal directing release of goods on indemnity bond and issuance of form No. XXXIV on furnishing the indemnity bond was held to be justified.
9. In [1982] 49 STC 130 (All.); 1983 UPTC 830 (Arya Chemicals v. State of U.P.) the seizure of 80 bags of zinc oxide was made by the Sales Tax Officer, (Mobile Squad), out of which 40 bags belonging to petitioner was being transported, it was held that Sales Tax Officer had jurisdiction to seize only 40 bags but had no jurisdiction to seize the remaining 40 bags which were covered by proper transport documents.
10. However, the facts and circumstances in above referred cases by the applicant were different and are not applicable in the present case.
11. In [1993] 88 STC 1 (All.); 1992 UPTC 321 [Sri Dwarika Prasad, Rewa (M.P.) v. State of Uttar Pradesh] this Court in reference to Sections 28-A(6), 28-B of “the Act” and Rule 83(4) and 84(3) of the U.P. Sales Tax Rules, 1948, has observed that when transit pass “form No. XXXIV” was obtained on false representation by the parties however on interception the tax authorities found that the goods were being carried for sale within State then the tax authorities were treated to be empowered to intercept and seize such goods even before the goods could reach exit check-post.
12. I have heard learned counsel for the parties and perused the records and I find that mere issuance of transit pass in “form No. XXXIV” does not deprive the authorities to seize the vehicle if they discover that the transit pass was obtained on a fraudulent misrepresentation that the goods were intended to pass through the State without any transaction of sale taking place therein and if the authorities discover that the goods were being transported for sale within the State. The Section 28-A(1) of the “Act” mandates that any person who intends to bring, import or otherwise receive into the State from outside any goods liable to tax under the “Act” in connection with business, must obtain the prescribed declaration forms, i.e., “form No. XXXI and form No. XXXII” for personal use. Sub-section (6) of Section 28 of “Act” authorises the assessing authority to detain any goods if he finds upon search or inspection that the person transporting or attempting or abetting to transport any goods without being covered by proper and genuine documents referred to in that section. The officer is also authorised to exercise all such powers as are mentioned in Sub-sections (2), (6) and (8) of Section 13-A of the “Act”, i.e., the power to seize the stock and to indicate the amount not exceeding such amount as would be sufficient to cover the penalty likely to be imposed on deposit thereof either in cash or by bank draft, and thereafter the goods seized may be released. The operation of the provisions of Section 28-A of “Act” does not stand excluded merely because the person happens to have obtained a transit pass in “form No. XXXIV” at the entry check-post on the pretext that the goods are in transit to be taken outside the State when, in truth and reality, the goods are intended to be brought into the State for the purpose of sale therein. Indeed, the acceptance of the petitioner’s contention that issuance of “form No. XXXIV” arms the dealer with some kind of immunity from action under Section 28-A would lead to serious results and large scale abuse of transit passes, quite apart from wholesale evasion of sales tax.
13. It cannot be accepted that even if the tax authorities discover that the goods which entered the State on the strength of a false transit pass on “form No. XXXIV” for sale within the State, they cannot seize the same until the petitioners choose to take them to the exit check-post. The department’s case would be that the goods were never intended to be taken beyond the State, after having been so imported by the dealer for sale within the State.
14. The Rule 84(3) of the U.P. Sales Tax Rules also authorises the concerned officer to order seizure of the goods, if he has reasons to believe that the same are not covered by one or more of the documents under Sub-rule (4) of Rule 83 or that such documents are false, bogus, incorrect, incomplete or invalid ; “form No. XXXIV” is also one of the documents mentioned in Sub-rule (4) of Rule 83. The case of the department is that form No. XXXIV obtained by the petitioner was obtained on misstatement as such false inasmuch as the goods in question were not intended to be taken outside the State.
Rule 83(4) reads as below :
“4(a) The owner, driver or any other person in-charge of the vehicle or vessel shall, in respect of such goods carried in the vehicle or vessel as are notified under or referred in Sub-section (1) of Section 28-A and as exceed the quantity, measure or value specified in the notification therein, carry with him the following documents :
(i) form of declaration for import or certificate in form XXXII, hereinafter in the Rules in this chapter referred to as declaration or certificate, as the case may be, in duplicate ;
(ii) cash memo, bill or challan;
(iii) authorisation for transfer of goods/goods challan hereinafter referred to as trip sheet in triplicate.
(b) The owner, driver or any other person in-charge of the vehicle or vessel shall in respect of all other goods carried in such vehicle or vessel carry with him a trip sheet in triplicate.”
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Rule 84(1)(3) reads as below :
(1) At every check-post or barrier or at any other place when so required by the officer in-charge of the check-post or by an officer empowered under Section 13 or 13A or under Rule 3A or 4 the owner, driver or any other person in-charge of the vehicle or vessel, as the case may be, shall stop the vehicle or vessel and keep it stationary for as long as may be required by such officer. He shall also allow such officer to examine the contents of the vehicle or vessel and to inspect all documents and records relating to the goods carried, which may be in his possession or in the possession of any other person in the vehicle or vessel.
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(3) If on such examination the officer finds or has reason to believe that-
(a) any one or more consignments are not covered by one or more of the documents referred to in Sub-rule (4) of Rule 83, or
(b) any such document in respect of any consignment is false, bogus, incorrect, incomplete or invalid,
the officer shall immediately issue a notice to the driver or person in-charge of the vehicle or vessel to show cause why the goods should not be seized.
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15. Reading together the Rules 83(4) and 84(3) clearly authorise the seizure of the goods in any of the contingencies contemplated by Clauses (a) and (b) of Sub-rule (3) of Rule 84. The substance of the seizure of goods made in the present case was that the transit pass in “form No. XXXIV” as well as the documents produced in respect thereof were false and incorrect not relatable to the consignor and consignee and showing large number of discrepancies as indicated as observations of paragraph Nos. 6, 7, 8 and 9 of order of learned Tribunal referred above.
16. There was no lack of power to seize the goods in question by trade tax authorities in view of the facts found by him upon inquiry. The seizure of the goods in question as well as the demand for security as indicated in the impugned order of learned Tribunal was also in the facts and circumstances of the present case fully authorised by law.
17. In the light of the above observation I do not find any illegality or impropriety in the order of Tribunal, therefore, both the revisions are dismissed and the questions of law are dealt with accordingly.