TaxTMI 
TaxTMI 
2010 (4) TMI 989
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....ukka, Mangalore, calling upon the respondent-owner of the vehicle-cum-oil tanker bearing registration No. KA 19 A-4060 to pay a sum of Rs. 24,523 representing the tax liability on 12 kiloliter of superior kerosene oil of the value of 1,63,488, in respect of which the check-post authorities had issued transit pass No. 0107642 dated June 25, 2003 and which transit pass had not been surrendered by the person in-charge of the vehicle carrying the goods at the stipulated exit point within the permitted time, thereby attracting tax liability in terms of the provisions of section 28AA of the Act and a further penalty of Rs. 49,046, as per the order of even date. The Commercial Tax Officer, Sales Tax Check-post, Mukka, Mangalore, had assessed the tax and also mulcted thereafter with penalty, for the reason that the transporter had failed to produce the transit pass, within the permitted time and therefore a presumption in terms of sub-section (4) of section 28AA of the Act to the effect that the goods in question has been sold within the State by the owner of the vehicle which automatically arises, as per the statutory provision and consequently not only liable to pay tax in terms of su....
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....the goods is deemed to have been sold within the State of Karnataka in favour of the respondent, by the owner of the goods career, it will have to be presumed that by not producing the transit pass, it is not the owner of the vehicle who has sold kerosene oil within the State of Karnataka and even if such a presumption is invoked, the owner will not be liable to tax, for the reason that the sale by the owner of the goods career of the goods, namely, kerosene oil within the State of Karnataka, will be a second sale and will be exempt in terms of the Government Notification No. FD 54 CSL 2002 (4) dated March 30, 2002 and as such cannot attract any tax liability whatsoever, on the presumption of there being a local sale and therefore was not required to be brought to tax under section 28AA of the Act. For such purpose, the Tribunal had followed the judgment of the Supreme Court rendered in the case of State of Punjab v. Mulakh Raj Nand Lal [1982] 50 STC 101. It is on the basis of such reasoning and with a further direction that a copy of the order of the Tribunal be furnished by the assessing authority to M/s. AVR Overseas Pvt Ltd., Mangalore, to initiate action against the said co....
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....d not be assessed in the hands of the owner of the goods vehicle; that the notification dated March 30, 2002, with reference to section 6B of the Act, would not absolve the respondent from any liability towards payment of tax under the Act; that the Tribunal has committed an error in purporting to apply and follow the decisions of the Supreme Court in the case of Sodhi Transport Co. v. State of U.P. [1986] 62 STC 381 and State of Punjab v. Mulakh Raj Nand Lal [1982] 50 STC 101 to be one attracted to the facts of the present case; that the Tribunal should have followed and applied the judgment of the Supreme Court in the case of Gopalakrishna Shetty v. State of Karnataka [2008] 13 VST 365 in interpreting the very provisions of section 28AA of the Act, wherein the Supreme Court had set aside the earlier order of the High Court whereunder the High Court had set aside the tax and penalty under sub-sections (4) and (5) of section 28AA of the Act, respectively, and remanded the matter to the Check-post Officer; that the order passed by the Tribunal is totally illegal and prejudicial to the interests of the State and therefore should be set aside and the order passed by the Commercial Tax....
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.... The officer-in-charge of the entry check-post or such officer empowered shall, after examining the document and after making such enquiries as he deems necessary issue a pass on the duplicate and triplicate copies of the application, retaining the original himself. The pass shall specify the check-post or the barrier (hereinafter referred to as the exit check-post) of the State to be crossed by the vehicle if any established, the route to be followed and the date and time up to which it should be so crossed." to submit that a mere non-production of transit pass in itself cannot, conclude the issue against the owner in the present case; that if the transporter had been provided only with a delivery note and not a transit pass, there is no way of the transporter producing transit pass at the exit checkpost, and therefore the failure attracting tax liability and penalty in terms of sub-sections (4) and (5) of section 28AA did not arise; that the presumption that the consignee is a bogus person or a non-existent person on the part of the authorities was not at all warranted even as based on some intelligence report and the owner of the vehicle having not even been provided with ....
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....subjecting the owner of the vehicle to tax and penalty only for the reason of non-production of transit pass and submits that for this reason also, the revision petition is to be dismissed. The learned counsel for the respondent would also submit that the reasoning of the Tribunal to allow the appeal before it by following the decision of the Supreme Court in the case of Mulakh Raj Nand Lal [1982] 50 STC 101 is apt, justified and for this reason also the revision petition should be dismissed. We have perused the order sought to be revised as also the orders passed by the first appellate authority and the original authority and also looked into the records produced by the learned Additional Government Advocate, and have bestowed our attention to the submissions made at the Bar by the learned Additional Government Advocate, appearing for the appellant-State and the learned counsel appearing for the respondent. In so far as the facts are concerned, they are not in dispute and it is the case of the respondent that he was transporting kerosene oil, which had been imported by the consignor at the New Mangalore Port and the imported oil had been loaded into the tanker of t....
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....ceived it, is not an acceptable piece of evidence and as a follow-up action, indicated that there was no person by the name of consignee carrying on business at the address furnished by the respondent. It was thereafter, the Commercial Tax Officer, Sales Tax Check-post, Mukka, Mangalore passed an order on April 22, 2004 levying tax and imposing penalty. In this state of facts, it is very obvious that there is failure of the mandatory requirement of sub-section (2) of section 28AA of the Act by the transporter. Section 28AA, which is an addition to the parent Act in terms of Act No. 14 of 1987, introduced with effect from April 1, 1988, and which has seen further amendments, which reads as under: 28AA. Transit of goods by road through the State and issue of transit pass.-(1) Where a vehicle is carrying goods taxable under this Act,- (a) from any place outside the State and bound for any place outside the State and passes through this State; or (b) and which goods are imported into the State from any place outside the country and such goods are being carried to any place outside the State, the driver or any other person-in-charge of such vehicle shall furnish the necessar....
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....ssessed to tax under sub-section (4), is carrying after such assessment, any goods taxable under this Act in a goods vehicle from any place outside the State or movement from within the State, as the case may be and bound for any other place outside the State and is passing, through the State, the prescribed authority may demand from such owner an amount equivalent to two times the tax leviable on such goods under this Act as security. (8) The prescribed authority after being satisfied that the goods carried in the goods vehicle in respect of which the security amount under sub-section (7) was collected, has passed through the State, shall refund such security amount to the owner. (9) The prescribed authority may by an order adjust the whole or any part of security amount towards any amount of tax or penalty payable under this section by such owner. Explanation.-In case where a vehicle owned by a person is hired for transportation of goods by some other person including a transporting or any other similar agency, both the persons shall for the purposes of this section, be deemed to be the owner of the vehicle, and shall be jointly and severally liable to pay any amount of ....
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....pass, it has got to be surrendered and a nonsurrender inevitably attracts the consequence of sub-sections (4) and (5) of section 28AA of the Act. A flimsy excuse on the part of the respondent-transporter that a representative of the consignee/consignor had collected the transit pass and that can be either verified or collected from the said representative, is neither here nor there and at any rate does not relieve the owner of the goods vehicle from the operation of section 28AA of the Act, particularly sub-sections (4) and (5). The liability in terms of section 28AA of the Act is on the owner of the vehicle transporting the goods and the flawed reasons and versions of the Tribunal in concluding that the goods having been notified as one liable for tax at a single point and therefore the owner cannot be mulcted with any liability, on the premise that the goods is already sold by the consignor to the transporter and therefore amounts to a second sale by the transporter, even if it is sold within the State, is a nonexistent situation, which does not follow in law nor has been made out on facts. This is nothing but a fertile piece of imagination on the part of the learned mem....