TaxTMI 
TaxTMI 
2017 (1) TMI 1060
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....quad, Padrauna, Kushinagar. Total value of goods as per invoices accompanying the eleven bilties of the respondent was Rs. 10,84,500/-. In the invoices, addresses of the alleged consignees were mentioned merely as "Chhapra, Bihar". However, in the bilties name of consignees were mentioned as "SELF". Value of goods mentioned in the invoices ranged from Rs. 20,500/- to Rs. 3,73,000/-. In these invoices, TIN number of consignees are not mentioned although in several invoices, central sales tax has been shown below the price of goods. Weighment slip dated 07.09.2016 of Jai Dharm Kanta, 142, Prakash Industrial Estate, Ghaziabad was also found accompanying the goods. On inquiry the TIN numbers mentioned in each invoices were found to be fictitious. Consignors were found non-existent. Thus, invoices were found to be fake and bogus. In the paper sheet (manifest) of the respondent, the transportation of goods is shown from U.P.B. to Chhapra or Siwan. Respondent could not prove from who they received goods and to whom they shall deliver. 4. A show cause notice dated 10.09.2016 was issued by the Assistant Commissioner, Mobile Squad Unit, Padrauna, Kushinagar to the respondent under Section 4....
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.... single judge judgment in the case of Madhya Bharat Transport Carrier, Gwalior Vs. Commissioner of Trade Tax, 2003 U.P.T.C. 1218, New Indore Delhi Road Lines Vs. Commissioner of Commercial Tax, U.P. Lucknow, 2012 NTN (Vol 49) -19, M/s Haryana Freight Carriers Pvt. Ltd, New Delhi Vs. Commissioner of Commercial Tax, U.P. Lucknow 2009(46), STJ 461, Seema Enterprises Vs. The Commissioner, Commercial Tax, 2013, Tax Law Diary - 246 (para 29, 32, 39), Om Logistic Ltd. Vs. Commissioner, Commercial Tax (TTR 326 of 2011) decided on 27.7.2016 and the circular of the Commissioner dated 31.1.1987, Commissioner, Commercial Tax, U.P. Lucknow Vs. Panch Kanya Road Carriers, Ghaziabad, 2012 NTN (Vol.49)-22 and the Hon'ble Supreme Court judgment in the case of Sridhar Vs. Nagar Palika, Jaunpur and others, 1989(2) AWC, 1433 (para 3). Lastly, learned counsel for the respondent submits that this revision may be finally decided on the basis of submissions made and he does not wish to add any thing. Alternatively he submits that in any case demand of cash security is highly excessive. 8. Relevant Provisions: U.P. VAT Act, 2008:- Section 46. Power of search, inspection and seizure in case of a pe....
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....lace are not traced to any bonafide dealer or documents issued by a bonafide dealer with respect to accompanying goods contains wrong particulars or that it is doubtful if such goods are properly accounted for by any dealer in his accounts, registers or other documents, maintained in the ordinary course of his business, he shall have power to seize such goods, and the remaining provisions of this section shall mutatis mutandis apply in relation to such seizure. (3) An officer seizing the goods under sub-section (1) shall take all the measures necessary for their safe custody and forward the list, referred to in the proviso to sub-section (1), along with other documents relating to the seizure to the assessing authority concerned. (4) The said assessing authority shall serve on the dealer or, as the case may be, the person in charge of the goods at the time of seizure (hereinafter in this section referred to as the person in charge) a notice in writing requiring him to show cause, why a penalty should not be imposed. (5) If such authority, after taking into consideration the explanation, if any, of the dealer or, as the case may be, the person in charge and after giving him....
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.... the dealer or, as the case may be, to the person-incharge. (9) Where the officer seizing the goods, before forwarding the list and other documents referred to in sub-section (3), or the assessing authority at any time thereafter, is of the opinion that the goods are subject to speedy and natural decay or where the tax assessed or penalty imposed, as the case may be, is not deposited in accordance with the provisions of this Act, the officer seizing the goods or the assessing authority, as the case may be, may, without prejudice to any other action that may be taken in accordance with other provisions of this Act, cause the goods to be sold by public auction in the prescribed manner. The sale proceeds of such goods shall be adjusted towards the expenses of tax assessed or penalty imposed. The balance, if any, shall be refunded to the dealer or, as the case may be, the person in-charge in accordance with the provisions of sub-section (8). (10) If the amount deposited under sub-section (7) is more than the amount of penalty imposed under sub-section (5), the excess amount so deposited shall be refunded to the dealer or, as the case may be, the person in-charge by the authority ....
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....or the retained original portion. The assessing authority may, in his discretion, direct the dealer or the person concerned to furnish copies of bill or cash memorandum or challan or invoice received by him from the selling dealer or the consignor of the other State for verification of the contents of the declaration or the certificate. (3) The concerned authority of rail, air, or post shall not deliver the consignment to the dealer or person concerned unless the declaration or certificate dully endorsed as aforesaid, is furnished before him. (4) The provisions in rule 54,and rule 56, except sub-rules (1), (6), (8) and (11) thereof and of rule 57 except subrule (1) and (6) thereof shall mutatis mutandis, apply in regard to the declaration or certificate, as the case maybe, referred to in sub-rule (1). (5) The commissioner may from time to time issue instructions with regard to the procedure to be followed regarding taking of delivery of goods and submission of declaration or certificate." Section 165 of Indian Evidence Act "165. The Judge may, in order to discover or to obtain proper proof of relevant facts, ask any question he pleases, in any form, at any time, of a....
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....itten, TIN numbers of consignees have not been mentioned in the invoices although the value of goods in the invoices ranged from Rs. 20,500/- to Rs. 3,73,000/-. Thus, invoices are apparently fake and bogus. In the invoices, C.S.T. or VAT has been shown to deceive the authorities as if sales of goods have been subjected to tax. The facts that consignors are non existent, TIN numbers mentioned in the invoices are fictitious, invoices are fake/ bogus, CST/ VAT shown in the invoice is deceitful act of undisclosed non-bonafide dealer and the goods originated for transportation from Ghaziabad (U.P.) as evident from the weighment slip and statement on oath of the driver of the truck dated 09.09.2016 and the TDF-1; leave no manner of doubt that the entire transaction and transportation is being carried fraudulently so as to give colour to the transportation of the goods in question originated from Ghaziabad (U.P.) to be transportation from outside the State of U.P. to outside the State of U.P. The TDF-1 has been downloaded suppressing the identity of real owner of goods and facts relating to the goods. In TDF-1, the commodity has been mentioned as "PARCHOONS" whereas the goods found were e....
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....e and unsustainable in view of the answer to the question No.(ii) by this court in subsequent paragraphs of this judgment. Similarly the findings of the Tribunal that the fact of consignees to be non-existent and non-bonafide are not relevant, is also not sustainable in view of the answer to Question Nos.(iii) and (iv) in subsequent paragraphs of this judgment and the facts and findings recorded above. The finding of the Tribunal that there was no evidence of loading of the goods within U.P. is perverse in view of the facts and findings recorded in paras-10, 11, 12 and 13 above. In fact, the Tribunal even being the last fact finding Authority has completely failed to discharge its statutory obligation and recorded its findings without proper examination of facts and the papers before it, namely the bilties, invoices, TDF-1 and weighment slip etc. 15. In view of the above discussion, prima facie I have no difficulty to hold that the goods in question originated for transportation from Ghaziabad, were being carried by the respondent in a fraudulent manner under the cover of bogus invoices with fictitious TIN numbers printed thereon. Respondents downloaded TDF-1 by submitting false i....
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.... a "no man's land" as per the circular. It is relevant to note that even the said circular has been cancelled by the Commissioner of Commercial Tax by circular dated 29.08.2016, which is reproduced below: 18. Thus, the circular dated 31.01.1987 is non-existent. That apart, it has no relevance in view of the facts found and the constitutional provisions mentioned above. Delhi - U.P. Border area of District Ghaziabad is not "no man's land" rather it is part of District Ghaziabad (U.P.). Question No. (iii) Whether transporters are strangers to the transaction of sale and purchase and totally ignorant about the consignors and consignees? 19. The ignorance shown by the respondents about the consignors and consignees, cannot be accepted in view of the observations of Hon'ble Supreme Court in the case of A.B.C. (India) Ltd. Vs. State of Assam and another (2005) 6 SCC 424 (para-22) as under: "22. In our view, transporters are not strangers to the sale or purchase of goods, to the contrary are part and parcel and are directly involved in storing the goods purchased or sold by dealers, and in many cases such transactions are fictitiously carried on in false names and address....
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..... VAT Act, 2008? 23. In the case of Vodafone International Holdings BV Vs. Union of India and another, (2012) 6 SCC 613 (paras 323, 331) Hon'ble Supreme Court considered the effect of adoption of colourable devices and held as under: "323. McDowell has emphatically spoken on the principle of Tax Planning. Ranganath Mishra, J. on his and on behalf of three other Judges, after referring to the observations of S.C. Shah, J. in CIT v. A. Raman and Co. AIR 1968 SC 49, CIT v. B. M. Kharwar (1969) 1 SCR 651, the judgments in Bank of Chettinad Ltd. v. CIT, (1940) 8 ITR 522, Jiyajeerao Cotton Mills Ltd. v. CIT, Bombay AIR 1959 SC 270; CIT v. Vadilal Lallubhai (1973) 3 SCC 17 and the views expressed by Viscount Simon in Latilla v. IRC, (1943) AC 377 : 25 TC 107 (HL) stated as follows: (McDowell and Co. Ltd. V. CTO, (1985) 3 SCC 230, SCC pp.254-55, para 45) "45. Tax planning may be legitimate provided it is within the framework of law. Colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that is honourable to avoid the payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly w....
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....fully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad. 25. Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res-judicata. 37. It will bear repetition to state that any order obtained by practising fraud on court is also non-est in the eyes of law." (Emphasis supplied by me) 26. In the case of S.P. ChengalVaraya Naidu (dead) by L.Rs Vs. Jagannath (dead) by L.Rs and others, AIR 1994 SC 853, the Hon'ble Supreme Court held in para 7 as under : "7. The High Court, in our view, fell into patent error. The short question before the High Court was whether in the facts and circumstances of this case, Jagannath obtained the preliminary decree by playing fraud on the court. The High Court, however, went haywire and made observations which are wholly perverse. We do not agree with the High Court that ....
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....ng for information regarding involvement in any criminal case or detention or conviction is for the purpose of verification of the character/antecedents at the time of recruitment and suppression of such material information will have clear bearing on the character and antecedents of the candidate in relation to his continuity in service. 29.6 The person who suppressed the material information and/or gives false information cannot claim any right for appointment or continuity in service. 29.7 The standard expected of a person intended to serve in uniformed service is quite distinct from other services and, therefore, any deliberate statement or omission regarding a vital information can be seriously viewed and the ultimate decision of the appointing authority cannot be faulted. 29.8 An employee on probation can be discharged from service or may be refused employment on the ground of suppression of material information or making false statement relating to his involvement in the criminal case, conviction or detention, even if ultimately he was acquitted of the said case, inasmuch as such a situation would make a person undesirable or unsuitable for the post. 29.9 An empl....
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....declined to file affidavit to bring on record full particulars of consignors and consignees and genuineness of transactions and invoices. They have not disclosed the real person/ owner of the goods in question. Wrong has been clearly committed and, therefore, the respondents cannot be allowed to take advantage of their own wrong on the basis of technical pleas so as to frustrate the law. Once a transportation of goods under the cover of Section 52 of the Act is shown to be fraudulent, sham, bogus, circuitous or a device designed to evade tax under the Act, the statutory authorities under the Act and the court can always examine the substance of the transaction because the legislature never intends to guard fraud. No authority or court may recognise such transportation or transaction on the basis of the provisions of Section 52 of the Act. Law is manifestation of principles of justice, equity and good conscience. Hence section 52 of the Act cannot be interpreted and understood in a manner so as to encourage tax evaders and to discourage those who abide by law. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges. No doubt, when a person tr....