TaxTMI 
TaxTMI 
2014 (11) TMI 1063
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....hases. All purchases and sales are vouched by purchase and sales bills. Regular quarterly returns are filed under the provisions of VAT, Central Sales Tax and also under the Entry Tax laws of the State of Madhya Pradesh. 3. Petitioner (Consignor), for transportation and delivery of edible oil (mustered oil) to M/s Jai Durga Oil Industries, Deenapur, Bhind (M.P.) (Consignee) on the basis of oral agreement to sale had loaded the same in Tanker No. UP-83 T 2915 of the ownership of Maa Bhagwati Roadlines, Transport Nagar, Agra on 22/7/2014. The aforesaid goods were having a weight of 140.50 qtl valued at Rs. 9,30,110/-. The sale bill as well as bilty based thereupon were also prepared and were with the driver of the vehicle while the tanker was dispatched from Sabalgarh for Deenapur on 22/7/2014. On the way at Jora-Morena Road, respondent No. 3 stopped the tanker. On being asked, the driver has submitted that following documents:- "(1) Bill NO. 102/22-07-2014 of M/s Hariom Floor and Oil Mill, Sabalgarhy for Rs. 9,30,110/- in favour of M/s Jai Durga Oil Industries , Deenapura, Bhind Affixing rubber stamp Local Good for Sabalgarh. Entry Tax not paid. (2) GR No. 111 d....
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.... the goods in movement and challan, bilties or any other document issued by the transporter; (b) stop the vehicle or carrier at every check-post or bring and stop the vehicle or carrier at the nearest check-post, while entering and leaving the limits of the State, set up under sub-section (1); (c) furnish all the documents including prescribed declaration forms relating to the goods before the check post officer; (d) give all the information relating to the goods; and (e) all the inspection of the goods by the check post officer or any other person authorised by the check post officer; provided that the documents including prescribed declaration forms shall be required to be carried and/or furnished only in respect of the goods as may be notified by the State Government. Provided further that if the transporter transporting goods by a road on which check post or barrier is not established, furnishes the documents including declaration form specified in clause (a) at the nearest Commercial Tax Office, immediately after entry into the State of Madhya Pradesh or before exit from the State, he shall be deemed to have complied with the requir....
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....(five times) of the amount of tax which would have been payable if the goods were sold within the State on the date of inspection:- Provided that the amount of penalty shall not be less than (five times) of the amount of tax. (9) to (16) xxxx xxxx (17) Subject to such restrictions and conditions and in such manner as may be prescribed, a transporter, on whom a penalty has been imposed under sub-section (8), may opt to pay in lieu of penalty a lump sum amount, which shall be (three times) the amount of tax referred to in sub- section (8) and once the transporter has exercised the option he shall not have any right to challenge the order of penalty in any forum. Explanation:- (i) Vehicle or carrier means:xxxx (ii) Transporter shall include the owner of the vehicle carrying the goods, whether an individual, a firm, association, society or company, and the manager, if any, of such owner; Aforesaid provisions provide for a detailed procedure to be followed for inspection of goods while in movement and imposition of penalty in the event of evasion of tax. As such, in fact and in effect, provisions contained therein besides be....
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....d once the transporter has exercised the option, he shall not have any right to challenge the order of penalty in any forum. 7. Counsel for the petitioner has contended that as required under Section 57(2) of VAT, the duly prepared bill and bilties were with the driver in respect of mustered oil loaded in the tanker dispatched on 22/7/2014 from Sabalgarh for Deenapur and was produced by him at Jora- Morena road where the tanker was stopped for checking by the concerned officer. It is submitted that the concerned officer neither issued any notice to the transporter or to the petitioner and contrary to the procedure prescribed in Section 57 of VAT, passed the order of penalty. That apart neither any enquiry was held nor documents found to be forged and false were verified. On mere surmises and conjectures conclusions were drawn prejudicial and detrimental to the interest and right of the transporter and the petitioner. Petitioner on being informed by driver, had rushed the place where he was forced to deposit an amount of Rs. 1,68,679/- on 26/7/2014. Even then, the vehicle was not released and same was attached on 31/7/2014. Such circumstances led him to file this petition. It is ....
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.... matter of imposition of penalty and passing order of punishment in abuse of their authority on flimsy grounds. Learned counsel for the petitioner referred to para 5 and 6 of the decision of Rajasthan High Court in the matter of Asstt. Commissioner, Anti Evasion, Commercial Taxes, Bharatpur vs. M/s. Amtek India Ltd. Bhiwadi, (2006) 3 RLW (Raj.) 2077 confirmed by Hon. Supreme Court in the matter of Asstt. Commissioner (supra) read as under:- "(5). One fails to understand how learned CTO without holding any inquiry these documents produced by assessee/driver of the vehicle at the time of checking, the invoice of prior date could not per se be treated as non- genuine or forged document. This Court summoned the record of the case and perused the original record. The documents including the declaration issued by the Sales Tax Authorities of both the states clearly establish that transit and transaction was perfectly genuine and there was absolutely no reason fro the Assessing Authority to just go by fidget of his imagination that merely because the invoice bears the date prior in point of time, such document should be held to be non-genuine so as to attract heavy penalty of 30%....
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....efore, the order of attachment was passed on 31/7/2014. With the aforesaid submission, it is prayed that petition be dismissed. 10. Heard. 11. Section 57 of VAT deals with establishment of check post and inspection of goods while in movement and inter alia provides a complete procedure in the matter of imposition of penalty. In the event it is found that goods in movement are not supported by documents as referred to in sub- section (2) or documents produced appear to be false or forged as contained in sub-section (8) of Section 57 of VAT, make the transporter liable for penalty to the extent of maximum 5 times of the amount of tax payment on goods. 12. According to Black's Law Dictionary (6th Edn.), the word 'alse' has two distinct well-recognised meanings: (I) intentionally or knowingly or negligently untrue; (2) untrue by mistake or accident, or honestly after the exercise of reasonable care. A thing is called 'false' when it is done, or made, with knowledge, actual or constructive, that it is untrue or illegal, or is said to be done falsely when the meaning is that the party is in fault for its error. 13. Hon. Supreme Court in the matter of Commi....
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....ve been conducted by the concerned officer. 15. That apart, the concerned authority is under an obligation to record reasons in writing as provided for in sub-section (6) before directing treatment with the vehicle and goods as contemplated under clauses (a), (b) and (c) thereunder. Sub-section (8) of Section 57 obliges the concerned authority to afford a reasonable opportunity of being heard to the transporter and hold an enquiry before resorting to imposition of penalty. The aforesaid requirements are mandatory in nature to establish the allegations related to submission of false or forged documents in relation to goods in movement. Neither, the notices to the transporter nor satisfaction to be recorded after due enquiry as contemplated under sub-section (8) can be said to be a empty formality which can be waived by the concerned authority by issuing an order in a cyclostyle format mechanically. The concerned authority is obliged to issue notice to the transporter for making a representation to produce documents and lead evidence so that he may avail the opportunity to put forth his submission and produce oral and documentary evidence to assert that documents in relation to go....
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....r and carried by the driver i.e. bill and bilty were scribed by the same person which led to formation of the belief by the authority concerned that the aforesaid documents were false or forged. As such, there was no enquiry at all and the suspicion raised by the concerned authority was ultimately construed as concluded fact to justify imposition of penalty of Rs. 2,81,135/- under Section 57(8)(ii) of the VAT. 18. On 26/7/2014 itself, the penalty order has been passed. There is nothing on record that reasons were recorded by the concerned authority under Section 57(6) of VAT that documents produced were false or forged. Both notice dated 26/7/2014 and order dated 26/7/2014 bore the reason for passing of penalty order to the following effect:- 19. The penalty order (Annexure R/8) is a cyclostyle form with fill in gapes. There is no record of enquiry produced or referred to in the counter affidavit in the context of aforesaid decision. It appears that aforesaid part in the impugned order is extracted from the so called statement of driver allegedly recorded on 22/7/2014. 20. In view of the aforesaid facts and circumstances, this Court is of the considered opinion that concer....