TaxTMI 
TaxTMI 
2014 (10) TMI 529
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....provides for import of goods into the State by road against a declaration form. Section 51 of the Act provides for import of goods into the State by Rail, Air, River or Ropeway. The contravention of Section 50 or 51 attracts penalty under Section 54(1)(14) of the Act. Rule 54 of the U.P. VAT Rules (for short the Rules) provides for establishment of check post which was amended and a new of Rule 54 was substituted by the U.P. Value Added Tax (Second Amendment) Rules, 2010 published vide notification no. K.A. NI-2-241/XI dated 4th February, 2010. Rule 55 of the Rules provides for inspection of goods in transit. Rule 56 provides for issue and submission to declaration forms and matters relating thereto. The relevant declaration form as referred in Rule 54 is form No.38. 5. Controversy involved in the present revisions are with regard to levy of penalty under Section 54 (1)(14) of the Act for contravention of the provisions of Section 50 of the Act. Under the circumstances, it is necessary to reproduce the provisions of Section 50, Section 54(1)(14) of the Act and Rule 54 of the rules and form 38 as under : Section 50. Import of goods into the state by road against declaration- (1) ....
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.... such dealer or person shall, in addition to the tax, if any, payable by him, pay by way of penalty, a sum as provided in column 3 against the same serial no. of the said table:- Rule 54. Establishment of Check Posts.- (1) (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 the vessel as are notified under or referred to in sub-section (1) of section 50 and exceeding the quantity, measure or value specified in the notification therein, carry with him the following documents- (i) form of declaration for import in Form XXXVIII or certificate in Form XXXIX hereinafter in these rules referred to as declaration or certificate, as the case may be, in duplicate, duly filled and signed by the purchaser and seller of the goods or where goods are transferred otherwise than by way of sale, by consignor & consignee of the goods with status and address; ii) Cash memo, bill, invoice or challan; (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 such documents as may be prescribed by the Commissioner in duplicat....
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....genuine documents then for reasons to be recorded and after giving opportunity of being heard he may order for detention of such goods. The declaration form for import may be obtained by registered dealer for import of goods either from his assessing authority or he may down load it from the official website of the department in the manner prescribed by the Commissioner. The aforesaid declaration form for import is form 38. The form is required to be sent to the selling dealer or consignor of the other State in two copies. 7. In form 38 the name and address of the dealer to whom form is to be issued, description of goods, weight / measure, quantity, value in figure, value in words, bill / cash memo / Chalan / tax invoice number and date, name and address of seller / consignor and certain particulars of transporters / carrier, namely, service provider number, truck number, name and address of driver and driving license number are to be filled up. Column no. 1 to 6 may be filled up only with the help of bill / cash memo / chalan / tax invoice. Recurring instances comes to light that column no. 6 is left blank due to which penalty under Section 54(1)(14) of the Act is imposed by the ....
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....and documents as may be prescribed" shall be substituted; (b) in sub-section (4) for the word "detention" the word "seizure" shall be substituted. Amendment of section 54 17. In section 54 of the principal Act, in sub-section (1), in the table,--(a) for entries at serial nos. 5 and 6 the following entries shall columnwise be substituted, namely:-- Sl.n Wrong Amount of Penalty (1) (2) (3) 5 Where the dealer has,-- (i) failed to issue or has deliberately not issued a tax invoice or sale invoice; or (ii) deliberately not obtained tax invoice inspite of being a registered dealer while purchasing the goods liable to tax under this Act from a registered dealer; or (iii) not issued purchase invoice; in accordance with the provisions of this Act. Tax payable on the value of goods or 40% of the value of goods whichever is higher 6 The dealer has failed to issue a challan, transfer invoice or transport memo in respect of dispatch or delivery of goods in accordance with the provisions of this Act Tax payable on the value of goods or 40% of the value of goods whichever is higher (b) for the entries at serial nos. 14 and 15 the following entries shall....
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....y tax invoice or sale invoice or any other document pertaining to value of goods, as the case may be, containing value of goods undervalued to the extent more than fifty percent of the value of goods prevalent at the relevant time in the local market area where the transaction has taken place, with intention to evade payment of tax; Tax payable on the value of goods or 40% of the value of goods whichever is higher 9. In these revisions this court is not concerned with the amended provisions since all the revisions relates to penalty under the unamended provisions of Section 54 (1)(14) of the Act. Under the circumstances this court does not express any opinion with regard to the amended provisions. 10. In the case of Jain Suddh Vanaspati Ltd. Vs. State of U.P., 1983 U.P.T.C. 198 a Division Bench of this Court considered the similar provisions of the U.P. Sales Tax Act, 1948 and held in paragraphs 23, 29 as under :- "23. The provision contained in Section 28-A as it stands after enactment of U.P. Act No. 33 of 1979 are materially different. It cannot be said that there is any assumption underlying therein that the goods to which the provision of Section 28-A applies have ....
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....n the goods named and described in Schedule-I, shall obtain the prescribed form of declaration. Section 50(2) provides that where such goods are imported, brought or otherwise received into the State by registered dealer, he shall carry such declarations or documents as may be prescribed. Section 50(3) provides that the driver or other person in-charge of the vehicle shall allow the authorized officer to search the vehicle and inspect the goods, and all documents referred to in Section 50(1) of the Act. Section 50(4) provides that while making the search or inspection if the officer finds any person transporting or attempting or abetting to transport any goods to which this section applies without being covered by the proper and genuine documents referred to in Section 50(1) & (2) of the Act if, for reason to be recorded, he is satisfied after giving such person an opportunity of being heard that such goods were being so transported in an attempt to evade assessment or payment of tax due or likely to be due under this Act, he may order detention of such goods. Section 50(5) provides that sub-sections (3), (7), (8), (9) and (10) of Section 48 shall mutatis mutandis apply to goods de....
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....aj Electricals Limited (Supra), the Apex Court following its earlier decision in the case of Guljag Industries vs. CTO (Supra) held that in case while importing the goods declaration form was found to be unfilled, it is a serious lapse and penalty is leviable. 20. It would be appropriate to mention here that there is a difference in the provision under the Rajasthan Act and the VAT Act. Under the Rajasthan Act Section 78 (4) provides for the seizure of goods. It says where any goods in movement, other than exempted goods, are without documents, or are not supported by documents are referred to in sub-section (2), or documents produced appear false or forged, the Incharge of the Check-Post or the officer empowered under sub-section (3), may seize the goods the reasons to be recorded in writing and shall give a receipt of the goods to the person from whose possession or control they are seized. Sub-section (5) of Section 78 further provided that after giving reasonable opportunity of being heard and after having held such enquiry as he may deem fit, shall impose on him for possession or movement of goods, whether seized or not, in violation of the provisions of Clause (a) of sub-sec....
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....ed form may lead to a violation of Section 50(1) and (2) and Rule 54(3)(a) and Rule 55(3). In case, if any discrepancy is being found, the officer is under obligation to issue show cause notice as provided under Rule 55(3) and in case the explanation is not found to be proper, he can pass the order seizing the goods under Rule 55(5). Rule 55(5) is to be read with Section 50(4) of the Act. It cannot be read in isolation. Therefore, for the seizure of the goods in case of any violation it is to be examined in each case that whether there was an attempt to evade assessment or payment of tax. 26. Let us examine the fact of the present case. In the present case, admittedly column No. 6 of the declaration form was found unfilled, namely, bill, invoice and challan numbers were not mentioned. According to me, mentioning of challan, bill and invoice numbers in the declaration form is very material. By filling column No. 6 and mentioning invoice, bill or challan numbers the declaration form can be correlated with the goods covered by invoices or challan. Photostat copy of Form 38 has been produced before the Court during the course of hearing which is on record. Perusal of the said form rev....
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....ty a satisfaction has to be recorded under Section 54 after giving an opportunity to the trader and on the material placed on record that there was an intention to evade the tax. The guilty mind is necessary to be established to impose penalty, which is a punishment to be given to a dealer over and above the tax assessed against him. 11. The penalty under Section 54 (14) of the VAT Act does not provide for statutory penalty for failure to make a complete declaration, as in the case of Section 78 (5) of the Rajasthan Sales Tax Act, 1954, which provides for penalty for breach of Section 78 (2) for movement of goods without Form No. 18A/18C. Under Section 54 (14) of the VAT Act, the conditions necessary for imposing penalty is (i) import or attempt to import or to abet in the import of any goods, in contravention of the provisions under Section 50, or Section 51 with a view to intention of evading payment of sale of - (a) such goods; or (b) goods manufactured, processed or packed by using such goods; or (ii) transport, attempt to transport any taxable goods, in contravention of any provisions of this Act. 12. On the above discussion, it cannot be said that the law laid down in Jain ....
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....olumns, there cannot be any possible reason why he has left filling column No. 6. This appears to be deliberate. ... Non-filling of column No. 6 i.e. non-mentioning of challan number or invoice number may lead to an inference that in case of non checking of the goods, the said declaration form may be used for any other consignment of a similar quantity, quality, weight and value." It is in these facts and circumstances, the Assessing Officer has also found that Form-38 in question was not signed by Consignor and it shows that it was not filled in by Consignor, but by Assessee itself, who left Column 6 blank deliberately. Assessing Authority from the discussion made in the impugned order, some of which are referred to hereinabove, formed an opinion that turnover of sale or purchase or both declared by Dealer is not worthy of credence and thereby assumed jurisdiction for making provisional assessment and has passed the order appealed before First Appellate Authority. This decision has also been referred to and followed in M/s JSW Steel Ltd. Vs. Commissioner, Commercial Tax, 2014 UPTC 277. 20. This Court enquired from learned counsel for the assessee that the goods, which have been i....
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....2.8.2008 itself, the vehicle was intercepted by checking team of Trade Tax Department. In these peculiar facts and circumstances, the Court found that except declaration form, all the documents were in order; and there was no concealment of sale of goods, the blank form was available with truck driver but due to interregnum change in the circumstances, which were beyond his control, the form could not be duly filled in for which he was not at all responsible. There was neither any mala fide intention nor any concealment on the part of assessee. In view of these very findings of fact recorded by Tribunal, it find imposition of penalty unjust and accordingly set aside the same. This order was confirmed by this Court by dismissing revision preferred by Revenue. I do not find as to how this judgment would help assessee in this case for the reason that, firstly, this judgment is founded on its own peculiar facts and secondly, when Tribunal found, as a matter of fact, that there was no intention to evade tax, penalty could not have been imposed. It was thus rightly set aside. 25. In Commissioner of Commercial Tax Lko. Vs. Jagrani Marketing Pvt. Ltd. Lko., 2013 NTN (Vol. 51) - 12, the fl....
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.... Court declined to interfere with the said view taken by the two appellate authorities observing that mere omission /keeping column 6 of Form- 38 blank was nothing but it was in the nature of clerical mistake for which penalty as such would not be attracted unless a further finding is recorded that there is an intention to evade payment of tax. In Commissioner, Commercial Tax Vs. Manglam Cement Ltd., 2013 NTN (Vol. 51)-18, penalty was imposed by Assessing Authority, since column 6 of Form 38 lacked date of bill/invoice. The first appellate authority itself deleted penalty holding that mere fact that column was blank would not justify imposition of penalty unless there is an intention to evade tax on the part of the importer. 27. In Commissioner, Commercial Tax, Vs. Shipra Engineering Works Pvt. Ltd., 2013 NTN (Vol. 51)- 171, the Tribunal itself deleted penalty and this Court declined to interfere therewith. 28. Similarly in Commissioner, Commercial Tax, Vs. Sudarshan Spare Parts and Service Centre, 2013 NTN (Vol. 51)-156, the Tribunal while deleting penalty, recorded a finding that there was no intention on the part of assessee to evade tax and hence this Court did not interfere.....
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.... of authorities concerned in imposing penalty upon assesee." 14. In the case of Commissioner Commercial Tax Vs. M/s Vind ----- Enclave, Trade Tax Revision 152 of 2014 decided on 5th August, 2014, This Court upheld the findings recorded by the tribunal that there was no intention to evade the payment of tax, in the circumstances that even though column no. 6 of form 38 was left blank but as per accompanying invoice the dealer who was a manufacturer was entitled to CENVAT Credit of 14% which was much higher than the commercial tax under the Act ; penalty was not leviable. 15. Non-filling up of column no. 6 i.e. not mentioning of bill / cash memo / chalan / invoice number may lead to an inference that in case of non-checking of goods the declaration form may be re-used for importing goods of same quantity, weight and value to evade payment of tax but it cannot be the sole ground to impose penalty under Section 54(1)(14) of the Act. Satisfaction has to be recorded after giving opportunity to the dealer / person and after considering all the relevant materials / evidences on record that there was an intention to evade payment of tax. The guilty mind is necessary to be established to i....
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....ding of fact based on consideration of relevant material that there was no intention to evade payment of tax. The finding recorded by the Tribunal are findings of fact. The revision has no force and is, therefore, dismissed. 19.T.T.R. No. 443 of 2014 :- The facts were that the assessee was found importing polymag from M/s India Glycose Ltd., Uttarakhand, when the goods were intercepted by the authorities on 17.11.2009. The goods were found accompanied with bill, bilty and form 38. However, column no. 6 of form 38 was found blank. The concerned authority seized the goods which were released on deposit of security of Rs. 2,00,000/-. The first appeal filed by the respondent was allowed and a finding of fact was recorded that there was no intention to evade payment of tax. The applicant filed second appeal which was rejected by the tribunal. The tribunal recorded a finding of fact that there was no intention to evade payment of tax. The goods in questions were excisable goods being brought by the assessee for use as raw material. On these facts the tribunal and first appellate authority recorded the findings of fact that there was no intention to evade payment of tax. The finding reco....
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.... to mistake of the selling dealer. There was no intention to evade payment of tax. There was no question of possibility of re-use of form 38 in question. Thus, finding recorded by the tribunal in the impugned order are findings of fact based on consideration of relevant material. The revision is wholly misconceived and is, therefore, dismissed. 22.T.T.R. No. 465 of 2014 :- The facts were that on 25.2.2011 truck no. HR 55M / 5175 loaded with the goods was intercepted by the Mobile squad unit 8, Ghaziabad. The goods were found accompanied with form 38 in which column no. 6 was left totally blank and there was over writing in G.R.. On these facts the goods were seized and the same were released on deposit of security. Subsequently, penalty proceeding was initiated and the penalty of Rs. 6,50,000/- was imposed under Section 54(1)(14) of the Act. The explanation of the assessee was that the mistake was because of human error and further that the goods were not for sale but for use as raw material. The First Appellate Authority dismissed the appeal of the assessee and upheld the levy of penalty. Second appeal filed by the applicant before the commercial tax tribunal, Ghaziabad was allow....
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....ed with invoice no. 646, 648 and 549 of dated 5.1.2010 of M/s Agrawal Steels, Faridabad , but without any form no. 38 / 39. Thus, there was clear breach of the provisions of section 50 of the Act. The explanation submitted by the assessee that form 38 was sent to the selling dealer but inadvertently the driver of the truck left it. All the documents namely, bill, bilty etc were found accompanied with goods. Penalty of Rs. 1,94,000/- was imposed. The First Appeal filed by the assessee was dismissed by the Additional Commissioner Grade-2 (Appeal) 4th, Ghaziabad on the ground that there was clear breach of Section 50(1) of the Act and as such penalty was rightly imposed. Second appeal no. 670 of 2012 filed by the assessee before the Member, Commercial tax Bench 2nd, Ghaziabad, was allowed.The tribunal recoded a finding of fact thatduly fully filled up form 38 was produced subsequently. The transaction in question was found duly recorded in the books of account of the assessee. The goods were accompanied with excise invoice, bilty and form VAT D-3 of Hariyana Government and as such there was no intention to evade payment of tax. The department has completely failed to establish import ....
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.....0808593. The explanation submitted was not found satisfactory and as such the goods were seized and the same were released on deposit of security of Rs. 5,68,000.00. Subsequently, penalty proceeding under section 54(1)(14) of the Act, was initiated and penalty of Rs. 5,68,000/- was imposed by the assessing authority. The assessee preferred First Appeal No.245 of 2011, which was rejected by the first appellate authority vide order dated 25.11.2011 holding that since goods were not accompanied with Form-38 and as such there was intention to evade payment of tax. Aggrieved with this order, the assessee filed Second Appeal No.269 of 2012 before the Member, Commercial Tax Tribunal Bench-II, Ghaziabad, who allowed the appeal by the impugned order dated 20.2.2014. The Tribunal has recorded a finding of fact that goods were accompanied with all relevant documents except Form-38. The assessee explained that it was handed over to the transporter, but by mistake he left it. The Tribunal recorded a finding of fact that there was no intention to evade payment of tax and the assessing authority also has failed to prove otherwise. The goods were well recorded in the regular books of accounts. ....
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.... the order of the First Appellate Authority clearly reveals that the goods in question were imported by the assessee as a capital goods for use in manufacture. The payment was made through cheque. Purchase was made against Form-C No.2286371. The transaction in question was found duly recorded in the regular books of accounts. The penalty was levied merely on the apprehension that Form-38 may be reused as Column No.6 was not filled up. The penalty order was passed exparte. The first appellate authority also recorded a finding that the goods were being brought from Gujrat and as such there appears to be no possibility of the form to be reused. On these facts the first appellate authority as well as the Tribunal have recorded a finding of fact that there was no intention to evade payment of tax. The assessing authority has not disputed that the goods in question were capital goods and the same were for use in the manufacture. It was not for sale. The first appellate authority and the Tribunal have recorded a finding of fact that the goods in question were a capital goods and the same was for use in manufacture and not for sale. On these facts, I do not find any infirmity in the find....
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....n manufacture of news print which is an exempt item. The first appellate authority and the Tribunal have recorded a finding of fact that there was no intention to evade payment of tax by the assessee. On the facts of the present case, I do not find any infirmity in the order of the Tribunal. The revision is wholly misconceived and is, therefore, dismissed. 28.TTR No.447 of 2014 In a sudden checking of the vehicle No. UP-85-P/9960 at the National Highway No.24 on 19.2.2009, the second mobile unit of the Commercial Tax department at Ghaziabad had found it carrying the goods (Bitumen ) from Jam Nagar (Gujrat ) to inside the State of Uttar Pradesh on an import declaration form but with no details as to the number and dates of the invoice noted in its Column No.06. The respondent was the consignee of the goods. The goods were then detained and seized and later on released in favour of the respondent on furnishing cash security of Rs. 1,31,250/-, equivalent to 37.5% of Rs. 3,50,000/-. Subsequent to the release of the goods the Deputy Commissioner initiated penalty proceedings against the respondent under Section 54(1)(14) of the U.P. Value Added Tax Act, 2008 and concluded with the im....
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....owed vide order dated 7th December, 2011. Aggrieved with the order of the first Appellate Authority, the applicant filed Second Appeal No. 175/2012, which was dismissed by the Tribunal vide impugned order dated 4th February, 2014. I find that the first Appellate Authority and the Tribunal have recorded finding of facts that on physical verification, the goods were found as per details given in the invoice, all the relevant documents were available with the goods, when the vehicle was intercepted. The goods i.e., scientific materials were being imported by the assessee who is a civil contractor for execution of contract work and not for any sale. Considering the entire facts and circumstances of the case and evidence on record, the first Appellate Authority and the Tribunal have recorded a finding of fact that there was no intention to evade payment of tax by the assessee. Genuineness of documents found accompanied with the goods as well as the fact that the same were not for sale but for use in execution of contract has not been disputed by the department. Under these circumstances, I do not find any infirmity in the impugned order of the Trib....
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....to Varanasi was intercepted on 9.6.2010 by the Assistant Commissioner, Commercial Tax, Mobile Squad, Shamli, Muzaffarnagar. Along with the goods bilty No.16256 dated 8.6.2010 of M/s Chahat Road Career, Karnal and a letter pad of the assessee containing details of materials along with Form-38 No. BB-0625476 were found. The goods were seized on the ground that in Column No.6 bill number and date has not been mentioned. The goods were released on deposit of Rs. 1,93,240.00. Subsequently, penalty proceeding was initiated and vide order dated 10.11.2010, penalty of Rs. 1,93,240.00 was imposed by the Deputy Commissioner, Commercial Tax, Sector-X, Ghaziabad. The assessee filed First Appeal No.407 of 2011, which was allowed vide order dated 28.5.2012. The applicant filed Second Appeal No.482 of 2012 was dismissed by the Member, Commercial Tax, Tribunal (Bench-I), Ghaziabad by the impugned order dated 4.2.2014. Aggrieved with this order, the applicant has filed this revision. It is not in dispute that the assessee, who is a Civil Contractor, was sending old shuttering plates of 11515 Kg. from Karnal site to Varanasi site. The goods were accompanied with bilty loading slip and a letter pad....
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....s also produced. The first appellate authority has also recorded a finding that in the second copy of Form-38 in question, bill number and date is mentioned, but in the original copy it was left inadvertently. A finding was also recorded to the effect that the goods in question have been properly accounted for in the books of account of the assessee. On these facts the penalty order was set aside. The Tribunal also considered the facts of the case and evidences on record and upheld the order of the first appellate authority. On the totality of the facts and circumstances, the findings of fact recorded by the first appellate authority and the Tribunal cannot be said to suffer from any infirmity. Penalty was rightly set aside by the first appellate authority, which has been upheld by the Tribunal. The revision is misconceived. It is, therefore, dismissed. 33.TTR No.508 of 2014 Briefly stated the facts of the present case are that on 4.10.2009 truck No.RJ-11GA/2332 was intercepted by the Assistant Commissioner, Commercial Tax, Mobile Squad-V, Ghaziabad and MS flat was found loaded in the truck accompanied with excise invoice-cum-challan dated 15.12.2008 of M/s Sunvijay Rolling and....
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....nd. The Tribunal considered the entire facts and circumstances of the case and evidences on record and came to the conclusion that there was no intention to evade payment of tax and that non mentioning of bill number and date in Column-6 of Form-38 was because of mistake committed by the selling dealer to whom the assessee had sent Form-38 for which the assessee cannot be penalised. The findings recorded by the Tribunal that there was no intention to evade payment of tax does not suffer from any infirmity in view of the facts and evidences of the present case. The revision is wholly misconceived and is, hereby, dismissed. 34.TTR No.509 of 2014 Briefly stated the facts of the present case are that on 17.1.2009 truck No.HR-55G-6988 was intercepted by the Assistant Commissioner, Commercial Tax-VIIth Unit, Agra. M.S. Angle were found loaded in the truck accompanied with Invoice No.5714 dated 14.1.2009 of M/s Sunvijay Rolling and Engineering Ltd., a bilty of M/s Abhay Roadways, Nagpur and form-38. It was found that in Column No.-6 of form-38 bill number and date was not mentioned. For this reason goods were seized and the same were released on deposit of security of Rs. 1,68,000/-. ....