CA Sandeep Kanoi
In the present case, admittedly, the driver of the vehicle possessed the documents relating to the goods and the Transit Declaration Form and the same were produced before the Commercial Tax Officer at the time of checking. Neither such Transit Declaration Form was found non-genuine or improper nor any details relating to the goods furnished in the Transit Declaration Form were found incorrect. No such finding has been recorded by any authority in this regard. There is absolutely no material on record to presume that the goods may be unloaded inside the State of U.P. and may not cross the State of U.P. The reasons given by the authorities for the seizure of the goods is hopeless, baseless and beyond the reasonable thoughts. The authority concerned has acted illegally and arbitrary manner, without any reason or basis merely on presumption, surmises and conjectures, appears to be with ulterior motive.
In case, if there is any discrepancy in respect of the earlier transaction, it is always open to the authority concerned to take necessary action in respect of such transaction. However, prima facie it appears that even in respect of earlier transaction also there is no material that the goods have been unloaded inside the State of U.P and did not cross the State of U.P. The inference is merely based on presumption, surmises and conjectures. In reply to the show cause notice, the applicant has categorically stated that no such statement has been given by the driver. In the seizure order nothing has been stated about such plea. Therefore, the reliance placed on the statement of the driver, is wholly unjustified. Further the presumption that the driver can not go and come from Delhi to Orissa within nine days, is merely based on presumption and inasmuch as has no relevance to the present transaction. No reason has been given by the Tribunal for saying that the applicant was not registered in respect of the goods. No such ground has been taken by the authorities below and there is no basis for the same. Even otherwise it has no relevance.
It is also relevant to note that in the Transit Declaration Form, 22.06.2013 was the date mentioned, by which the vehicle had to leave the State of U.P. and that period had not been expired and the goods have been detained on 19.06.2013. In such situation the question of drawing the inference of sale of goods inside the State of U.P. does not arise.
Commissioner, Commercial Tax, reported in 2012 NTN (Vol.49), 19 this Court observed that “admittedly in the present case the goods were seized immediately on their entry in the State of U.P. without allowing the time for its exit to expire. In such situation, it is wrong to presume that the goods have been retained for the purposes of sale. Apart form the above, as the goods were duly accompanied by the requisite documents, no presumption arises under law that they were likely to be sold within the State of U.P.”
Similar view has been taken in the case of Commissioner, Commercial Tax Vs. M/s Gautam Pandey, reported in 2012 NTN (Vol.48), 194, wherein it has been held that the stage of inquiry or any investigation as to whether the goods have been imported in U.P. or are on the transit only, had not arrived as the detention was made prior to the time stipulated for the exit of goods mentioned in the transit declaration form.
Rbbrl Contractors And Another Vs. Commissioner, Commercial Tax, U.P., Lucknow, (Supra), this Court has held that the past conduct of the transport or the driver in obtaining transit declaration form and the doubt expressed about the possibility of the said vehicle being against used within a short span for transporting goods from Delhi to Patna is not the relevant criteria for inferring that the present goods are likely to be sold in U.P.
In the case of Sahara Quick Transport Service Vs. State of U.P. And others, in Writ Petition (Tax) No.637 of 2013, the Division Bench of this Court has held as follows:
“Prima facie we find that the Asstt. Commissioner, Mobile Squad, Commercial Tax has not given any findings with regard to validity of the transaction in question. He has relied upon some previous transportation of the goods by the same carrier for a different owner of the goods, which was not relevant for the purposes of exercising powers for seizure of the goods.”
In the case of New Indore Delhi Road Lines Vs. Commissioner, Commercial tax, reported in 2012 NTN (Vol.49), 19 while dealing with Section 52 and seizure of the goods this Court has held as follows:
“It may be relevant to note that seizure of the goods in transit through U.P. Can be made only on the grounds mentioned under section 48 of the Act and the presumption that the goods are meant for sale in U.P. would only be available when they are not accompanied by the requisite documents, i.e. bills and bilties and the transit declaration form.
It is not the case of the department that the goods were not accompanied by the relevant bills, bilties and transit declaration form. It is not even the case that the good have entered from the wrong place or were likely to be taken out from a different place or was not following the disclosed route as contained in the transit declaration form. There is no whisper that toe goods have over stayed in U.P., which may be a reason for the authorities to believe that they were meant for sale in U.P.”
In the case of Commissioner of Trade Tax, U.P. Lucknow Vs. S/s Sagir Khan and Zahir Khan, Rampur, reported in 2005 NTN (28) 129 the learned Single Judge of this court observed as under:-
“The provision to issue transit pass at the entry check post and to surrender at the exit check post is to ensure that the goods, which entered inside the State of U.P. had gone outside the State of U.P. and has not been sold inside the State of U.P. The power to seize the goods is only available at the exit check post when it is found that the transporter is trying to import different goods. Under aforesaid provisions there is no power to seize the goods at the entry check post. At the entry check post if driver of the vehicle applied for transit pass, authority has to verify the goods loaded in the vehicle and mention the name and quantity of the goods sought to be transported through the State of U.P. in the transit pass to that at the entry check post, the same may be verified at the time of surrendering the transit pass.”
In another case reported in 2003 NTN (23) 1009 Madhya Bharat Transport Carrier, Agra Vs. Commissioner of Trade Tax, U.P. Lucknow this court was dealing with the question whether the goods can be seized before the expiry of time allowed in transit pass. His Lordship after considering the various provisions came to the conclusion that the stage of seizure arises only at the exit point and the goods cannot be seized before the expiry time allowed in the transit pass.
In the case of M/s New Mahavir Transport Company of Bharat Vs. The Commissioner, Commercial Tax, U.P. Lucknow, reported in 2009 NTN (41) 224 which was also a case of seizure under Section 52 of the U.P. Value Added Tax Act, it was held that the goods cannot be seized on minor technical defect and should be allowed to be released without security.
It is settled principle of law that seizure can not be made merely on presumption. There must be a material to show that the Section 52 Rule 58 or the procedure prescribed in the circular issued by the Commissioner has been violated.
The Apex Court in the case of State of Kerala Vs. M.M.Mathew and another, reported in 42 STC, 348 has held that the presumption may be very strong but it can not take the place of evidence. It has been held that strong suspicion, strange coincidences, and grave doubts cannot take the place of legal proof. This is also the case of seizure of account books.
Reliance is also placed on the decision of this Court in the case of S/S Ram Gopal Agarwal Galla Vyapari Att, Jalaun Vs. Commissioner of Trade Tax, reported in 2007 NTN (Vol.35), 39, M/s Rathi Industries Ltd. Vs. Commissioner of Commercial Tax, reported in 2009 (Vol.39), 279, M/s Jain Irrigation System Limited Vs. The Commissioner, Commercial Tax, U.P., Lucknow, reported in 2009 (Vol.39), 279, M/s New Mahavir Transport Company of Bharat Vs. The Commissioner, Commercial Tax, U.P., Lucknow, reported in 2009 NTN (Vol.41) 224, Balaji Timber Paint Vs. Commissioner, Commercial Tax, U.P., Lucnkow, reported in 2010 NTN (Vol.43), 53, Rbbrl Contractors And Another Vs. Commissioner, Commercial Tax, U.P., Lucknow, reported in 2011 NTN (Vol.46) 26.
In the present case, no case has been made out that Section 52 of the Act or Rule 58 or circular of the Commissioner has been violated. No case has been made out that the goods were not traceable to bonafide dealer and are not recorded in the books of accounts, document or register. The inference that the goods may likely to be unloaded inside the State of U.P. And may not be taken to other State, while the goods were in transit and vehicle was on declared route is merely based on presumption, suspicion and doubts, which is not sustainable in law.
The goods have been detained illegally, arbitrarily and without any basis and merely on surmises and conjectures and whims of the authorities concerned despite the settled principle of law laid down by the Court referred hereinabove.
The goods have been seized despite the settled principle of law referred hereinabove, on 19.06.2013 and since then goods are in the custody of department. The applicant has suffered huge substantial loss for no fault on his part and subjected to harassment.
It is unfortunate that the Joint Commissioner (S.I.B.) and Tribunal have affirmed the seizure of the goods.
In view of the aforesaid facts and circumstances, in my view the applicant is entitled for the exemplary cost, which I assess at Rs.1 lac. I also direct the Commissioner, Commercial Tax to look into the matter and take the appropriate action against the officials in accordance to law, who have seized the goods. It will be open to the department to realise the amount of cost from the concerned officials.