The present writ application has been preferred for setting aside the order dated 07.04.2017 as contained in Annexure 7 Series passed by respondent no. 4 imposing penalty under section 56 (4)(b) read with section 60(4)(b) of the Bihar Value Added Tax Act 2005 as also for quashing of the order dated 05.06.2017 contained in Annexure 11 to the writ application passed by respondent no. 2 in appeal case No. BH/CCP/STA/05/17-18. After passing the aforesaid order the petitioner had also prayed for a direction to the respondent no. 4 to refund a sum of Rs. 9,33,470/- paid on account of penalty under protest.
Learned Counsel for the petitioner submits that the petitioner is a partnership firm which is an authorized dealer of Atul Auto Ltd., Rajkot. The partnership firm is also registered as dealer at Muzaffarpur. For the purpose of transportation of Auto three wheelers, diesel generator set and lubricants generated e-suvidha declaration in from D-IX. from Rajkot to Muzaffarpur. The e-suvidha declaration mentioned the details of the consignee, consigner, the identification number of the consigner and consignee place of dispatch and destination of consignment, invoice number, quantity and value of goods. A copy of e-suvidha declaration dated 28.03.20 17 has been placed as Annexure-1 to the writ application.
It is the case of the petitioner that a copy of e-suvidha declaration was made available to the transporter together with a copy of retail invoice in support thereof to facilitate the transportation of goods and for this purpose the petitioner hired services of truck No. NI 01 Q 2183.
It is stated that after commencement of the transportation process the petitioner came to know about the judgment of Hon’ble Supreme Court of India in the case of M.C. Mehta Vs. Union of India & Ors. in Writ Application (Civil) 13029 of 1985 by which the Hon’ble Apex Court has prohibited sell of all vehicles with B.S. III engines. It is stated that the vehicle was intercepted by respondent no. 4 at the check in Bihar post on 04.04.2017. An inspection report (Annexure-5) was prepared, in compliance of the direction of the respondent no. 4, the driver of the transport vehicle produced the e-suvidha declaration and also the retail invoice but upon the verification respondent no. 4 found that the e-suvidha declaration which was produced had been cancelled and found accordingly on the website of Commercial Taxes Department.
Respondent no. 4 sought explanation for cancellation of e-suvidha declaration. The reply of the petitioner was that the goods being transported were Auto three wheelers fitted with BS III Engines and because sale thereof were prohibited by the judgment of Hon’ble Supreme Court and the goods which were being transported stood reduced to scrap and were not marketable, those were to be returned to be consigner. The petitioner in support of this contention filed the certificate issued by the consigner certifying that the consignee billed vide invoice no. 1000006789 dated 27.03.2017 were of Bharat Stage III (BS III), copy of the certificate dated 05.04.2017 has been annexed as Annexure-6 to the writ application.
The response submitted by the petitioner was not acceptable to the respondent no. 4 who held that the petitioner has violated the provisions of Section 16(2) of the Bihar Vat Act. 2005 and because the petitioner had failed to furnish e-suvidha declaration in support of goods being transported, the petitioner had failed to file correct and complete declaration and was thus, liable to penalty three fold of the amount of tax payable. Respondent no. 4 imposed a penalty of Rs. 9,33,470/- vide order dated 07.04.2017 as contained in Annexure 7 series.
The petitioner, it is stated that in order to secure release of the transport vehicle along with the goods loaded thereon deposited the penalty amount under protest. Thereafter, the petitioner generated e-suvidha declaration in form D-IX to return the goods being transported to consigner. The e-suvidha declaration so generated mentions the name of consignee, the consigner, their identification number etc., place of dispatch and destination. It is stated that the consigner also generated waybill in form 403 to facilitate transportation of the goods from the check post to the place from where it was dispatched. The said bill also refers the requisite details of the consignment.
The petitioner being aggrieved by the order passed by respondent no. 4 filed an appeal before respondent no. 2 and submitted that the petitioner had generated e-suvidha declaration prior to the judgm nt and order passed by Hon’ble Supreme C urt, however, when the petitioner came to know about the said judgment it was found that the goods being transported were reduced to a scrap and were not marketable, therefore, the said e-suvidha declaration was cancelled on the ground of prohibition of sell imposed by the judgment of the Hon’ble Apex Court. The information regarding cancellation were adequately disclosed in the website of the Commercial Taxes Department and therefore, it cannot be said that the goods were being transported with an intention to evade payment of Tax inasmuch as those goods were reduced to scrape and were not marketable in view of the judgment of the Hon’ble Apex Court. The appeal preferred by the petitioner was, however, dismissed by the order dated 05.06.2017 as contained in Annexure- 11.
Mr. Kejriwal learned advocate for the petitioner submits that the in the facts and circumstances of the present case, there was no reason for the respondent authorities to doubt the bonafide of the petitioner. The sequence of facts leading to cancellation of e-suvidha declaration in respect of goods being transported have been placed before us to demonstrate that with effect from 01.04.2017, the vehicle with Bharat Stage III could not have been sold in the market and therefore on 04.04.2017, when the transport vehicle was intercepted by the Revenue Authorities, the goods loaded on the vehicle were not marketable, hence, the taxing authorities cannot say that the petitioner was trying to evade Tax.
It is submitted that only because of lack of due communication, the driver of the transport vehicle drove the transport vehicle to its destination and reached the check post. It is submitted that the order passed by the respondent no. 2 as also respondent no. 4 are wholly illegal, arbitrary and bad in law because they have failed to take into consideration the fact that both the consignee and consigner had issued e-suvidha declaration and waybill for transportation of the goods back to the original place of dispatch and that the said goods had also reached to the consigner.
A counter affidavit has been filed on behalf of respondent no. 2 and 4 who have passed the impugned orders. It is their case that under the provision of Section 16(2) Bihar Vat Act. 2005 every person transporting goods, other than those specified in Schedule-1 and subject to such condition as may be prescribed shall at the Check post barrier, referred to sub section (1) and before crossing said check post barrier, file before such authorized Officer by the State Government in this behalf, a correct and complete declaration in such form and manner as may be prescribed.
According to them, it was found by the inspecting authorities that the declaration (Suvidha) which was produced by the driver had already been cancelled by the consigner on 30.03.2017 but no other suvidha was generated at place of cancelled suvidha. The truck in question reached at the check post after four days on 04.04.2017 and because the goods were being transported without correct and complete declaration, it was found that the goods were being transported in violation of provision of section 16(4)(a) read with Section 56(4)(a) of the Bihar Vat Act 2005.
Thus, the goods were seized by the authorities concerned. It is submitted that in the case of Supreme Road Transport Ltd. Vs. State of Bihar, this court has held that in case were the driver or person in-charge of goods fails to make true and complete disclosure, such failure give rise to presumption of intention to evade tax. The respondents have supported the impugned orders saying that the penalty has rightly been imposed three times to the tax assessed on goods.
Having heard learned counsel for the petitioner and learned counsel representing the respondent authorities as also in perusal of the pleading available on record, we find that the only reason for imposition of the penalty shown in the counter affidavit is the alleged violation of the provision of Section 16(2) of the Bihar Vat Act 2005. Neither in the counter affidavit nor in course of submission before this court the respondent authorities or on their behalf it could be prima facie demonstrated that the petitioner had cancelled the e-suvidha declaration generated on 28.03.2017 with any intention to play fraud upon the taxing authorities. The simple case of the petitioner is that after the e-suvidha declaration was already generated and handed over to the transport authority, the petitioner came to know about the judgment of the Hon’ble Apex Court in the case of M.C. Mehta (supra) and informed that with effect from 01.04.2017, the petitioner would not be able to sell the vehicles of Bharat Stage
III. Finding this position, the petitioner cancelled the e-suvidha form giving the reasons therefor but then this fact was not communicated to the driver who reached the check post on 04.04.2017 and was intercepted by the taxing authorities.
There is no answer to the contention of the petitioner that with effect from 01.04.2017, the vehicle loaded on the truck in question were reduced to scraps and were not marketable, if this is the position and not denied by the respondents, this court would be constraint to hold and declare that cancellation of the e-suvidha declaration by the petitioner was only a bona fide act without there being any intention to play fraud with the taxing authorities. On 04.04.2017, when the Truck was intercepted those loaded vehicles were not marketable and further, Annexure-9 and 10 to the writ application clearly demonstrate that those vehicles were returned to the consigner for which the petitioner has generated e-suvidha declaration to return the goods to the consigner. The e-suvidha declaration (Annexure-9) contains similar description of the vehicles which have been mentioned in the e-suvidha declaration earlier generated on 28.03.20 17. It is also found that the consigner had also generated waybill dated 20.04.2017 vide Annexure 10 to the writ application to facilitate transportation of the goods from the check post to the place from where it was dispatched.
In the given circumstances, we are of considered opinion that both respondent no. 2 as well as respondent no. 4 have failed to consider the facts and circumstances as also, the submissions of the petitioner keeping in mind the judgment of the Hon’ble Apex Court from which the petitioner was pleading before the authorities that the loaded vehicles in question had already been reduced to scraps and were not marketable on 04.04.2017. No element of fraud or intention to evade tax may be found from the conduct of the petitioner and therefore, we have no hesitation in holding Annexure-7 as well as Annexure-1 1 to the writ application as wholly illegal and without jurisdiction. Both Annexure-7 as well as Annexure-1 1 to the writ application are therefore quashed. The respondent no. 4 is directed to refund the sum of Rs. 9,33,470/- to the petitioner within a period of one month.
The writ application is allowed.