AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 1381
X X X X Extracts X X X X
X X X X Extracts X X X X
....or submitted reply within the time allowed. After considering the facts and circumstances and the evidences on record, the Mobile Squad Authority came to the conclusion that the goods have been loaded from Ghaziabad and accordingly passed the seizure order dated 20.10.2016 demanding cash security of Rs. 10,90,250/- for release of the seized goods, which were valued at Rs. 27,25,624/-. Against the aforesaid order, the respondent preferred an application under proviso to Section 48(7) of the Act before the Joint Commissioner (SIB), Commercial Tax, Range Barellie in which he took the stand that the goods were being transported from transshipment area at Delhi-U.P. Border. The same were accompanied with TDF-1, bills, bilties and weighment slip. The respondent also took the stand that transporter has no right to collect information about the consignor and whosoever books the goods, the same is transported by him for the given destination where the goods are delivered to the person who produces the bilty. The Joint Commissioner (SIB) found that the applicant is not registered under the Act. He considered the facts and evidences on record, and rejected the application of the respondent by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at the Ghaziabad-Delhi Border which is known as transshipment area. From there goods are loaded in trucks for transportation to its destination after weighment. He submits that in the present case, the respondent has booked the goods of various dealers for transportation from Delhi to Siliguri (West Bengal). He submits that as per circular of the Commissioner dated 07.10.2013, copy of which has been filed as Annexure-20 to the revision, search and seizure may be made in the transshipment area with regard to the goods being loaded and transported from the transshipment area (Delhi Ghaziabad Border) but it cannot be treated to have been loaded for transportation from Ghaziabad within the State of U.P. He submits that transshipment area is a no-man's land and, therefore, transportation of goods from this area cannot be treated to be a transportation originating from the State of U.P. He relied upon a decision of Single Bench of this court in the case of Commissioner, Commercial Tax, U.P. Lucknow Vs. Panch Kanya Road Carriers, Ghaziabad, 2012 NTN (Vol.49)-22 (at 25). He submits that the respondent has not committed breach of any of the provisions of the Act. No action can be initia....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons shall be deemed to carry on activities ancillary or incidental to or in connection with the business of a dealer: (i) broker or canvassing agent who acts as mediator between purchaser and seller of goods; or (ii) transporter or any other carrier or a forwarding agent of goods; or (iii) person who fabricates or manufactures any goods for a dealer; or (iv) person who takes delivery of goods or who dispatches goods on behalf of a dealer; or (v) person who holds in custody any goods belonging to a dealer; or (vi) person who handles goods of a dealer in any other capacity. Section 48. Power to seize goods.- (1) An officer authorised under sub-section (1) of section 45 shall have the powers to seize any goods - (i) which are found in a dealer's place of business, vehicle, vessel or any other building or place; or (ii) which, such officer has reason to believe to belong to the dealer and which are found in any place of business, vehicle, vessel or any other building or place, but are not account for by the dealer in his accounts, registers or other documents maintained in the ordinary course of his business. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rvalued to the extent of more than fifty percent of the value of goods prevalent at the relevant time in the local market area where the said transaction had taken place, with intention to evade payment of tax, it shall pass an order imposing a penalty not exceeding forty per cent of the value of such goods, as he deems fit. (6) A copy of the order imposing penalty under sub-section (5) shall be served on the dealer or, as the case may be, the person in charge. (7) The officer seizing the goods shall serve on the dealer or, as the case may be, the person in charge an order in writing mentioning the fact of such seizure and indicating the amount, not exceeding such amount as would be sufficient to cover the penalty likely to be imposed, on deposit whereof in cash, the goods so seized may be released in favour of the dealer or, as the case may be, the person in charge: PROVIDED that the Commissioner or such other officer, not below the rank of a Deputy Commissioner, as may be authorised in this behalf by the Commissioner, may, for sufficient reasons to be recorded in writing, direct that the goods be released without any deposit or on depositing such lesser....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of section 50, passes through the State, the driver or other person in charge of such vehicle shall carry such documents as may be prescribed failing which it shall be presumed that the goods carried thereby are meant for sale within the State by the owner or person in charge of the vehicle. U.P. VAT RULES, 2008: "Rule 58. The transit of goods by road through the State.-- The driver or person-in-charge of a vehicle carrying goods referred to in sub-section (1) of section 50, coming from a place outside the State and destined for a place outside the State, passes through the State, the driver or person-incharge of a vehicle shall carry such documents and follow such procedures as may be determined by general or special order issued by the Commissioner from time to time, failing which it shall be presumed that the goods carried thereby are meant for sale within the State by the owner or person-in-charge of the vehicle. Rule 59. Import or receipt of goods by rail, river or air and matters incidental thereto. (1) A registered dealer or a person other than a registered dealer desirous of importing or receiving into the State (from any place outside th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Court, to cross-examine any witness upon any answer given in reply to any such question: Provided that the Judgment must be based upon facts declared by this Act to be relevant, and duly proved: Provided also that this section shall not authorize any Judge to compel any witness to answer any question, or to produce any document which such witness would be entitled to refuse to answer or produce under sections 121 to 131, both inclusive, if the questions were asked or the documents were called for by the adverse party; nor shall the Judge ask any question which it would be improper for any other person to ask under section 148 or 149; nor shall he dispense with primary evidence of any document, except in the cases herein- before excepted." Discussion and Findings:- Question No. (i) Whether under the facts and circumstances of the case, seizure of goods and demand of cash security for its release under Section 48 of the U.P. VAT Act, 2008 is valid? 6. Perusal of the record shows that on 27.09.2016, a truck bearing Registration No.UP22T/4924 was intercepted by the Assistant Commissioner, Commercial Tax, Mobile Squad Pilibhit. The driver of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fied in their absence. On 08.10.2016, the helper "Kayyum" came and moved an application intimating that on 09.10.2016, the driver shall come for physical verification of the goods. However, later on, on the same day, the authorisation of the respondents was produced by the aforesaid helper "Sri Kayyum" whereby the respondents authorized him as their representative for checking of the goods. Thus, the respondents and actual owner of goods did not deliberately turn up for 12 days for physical verification of the goods loaded in the truck in question. On 09.10.2016, the driver as well as the helper, namely Sri Saddam Hussain and Sri Kayyum appeared for physical verification of the goods. They produced weighment slip bearing Serial No.1950 dated 25.09.2016 of M/s Mahabir Dharm Kanta G.T. Road, Delhi-U.P. Border, Ghaziabad, a transit declaration form No.D20160900424805 and certain other documents. On checking, the following discrepancies were found: (i) On physical verification, goods of G.R. Nos.18982, 61162, 18973, 61618, 61613, 15930 and 15886 were found different than the goods declared. (ii) Kachcha parchas of goods of estimated value covered by G.R. Nos.61694 and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and found that in none of the invoices, addresses of the consignees have been given. Merely "Siliguri" has been mentioned in the invoices. All the aforesaid fake invoices bear name of firms showing some addresses of Delhi which all were found to be untraceable/non-existent on the basis of checking of the TIN numbers as aforesaid. 10. It appears that after the seizure order dated 20.10.2016 was passed, a reply was presented on 22.10.2016 before the Mobile Squad Authority by one Sri Rana Pratap Singh, authorised representative along with an authorisation of the respondents showing him to be resident of District Chapra while as per Voter ID Card, the aforesaid person is resident of District Saran. Even in this reply, the respondents have not mentioned even a word about the queries made in the show cause notice for seizure of goods but instead simply stated that the goods are covered by invoices and bilties and they have no right to collect information about the consignors and whosoever books the goods, they deliver it at the destination on presentation of bilti. It was also stated that the goods do not relate to the Uttar Pradesh. 11. After the seizure order, the respondents mov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dents onthe touchstone of the afore-noted provisions of the Act and the Rules, it would be relevant to note at the cost of repetition that the invoices accompanying the goods were found to be forged, the TIN numbers were found to be fictitious and the consignors mentioned in the forged invoices were found to be non-existent. The goods were loaded at Ghaziabad within State of U.P. These facts are supported by documentary evidences on record which could neither be disputed or denied by the respondents nor the Tribunal has set aside the findings recorded in this regard by the Mobile Squad Authority and the Joint Commissioner (SIB). Three questions were put by the court to the respondents as recorded in the order of this court dated 09.12.2016 which were answered as under: "(a) Question (i): Whether there is any branch or office or contact address of the respondent at Ghaziabad (U.P.) and Siliguri (West Bengal)? Answer (i):- It is not relevant for transportation and delivery of the goods. (b) Question (ii):- When goods of 76 invoices relating to different alleged purchasers showing their address merely as 'Siliguri' are being transported by the respon....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y acted to get the goods released merely on their baseless stand that the goods were being transported from outside the State of U.P. to outside the State of U.P. 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 information, suppressing material information, identity and particulars of real owners of the goods, so as to give it colour of transportation of the goods from outside the State of Uttar Pradesh to outside the State of Uttar Pradesh under Section 52 of the Act, with intent to evade tax under the Act. Under the circumstances, seizure of the goods under Section 48 of the Act and demand of cash security by the Mobil Squad Authority as modified by the Joint Commissioner (SIB) for release of the goods, does not suffer from any illegality. Question No.(ii) Whether Delhi - U.P. Border area of District Ghaziabad is "no-man's land"? 16. The stand taken by the respondents that certain b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd consignees? 19. Before the authorities and the Tribunal, the respondents took the stand that they being transporter have no right to obtain information of any kind about any businessman rather the business of transportation is based on practical formula that whosoever books the goods for a place of destination, he takes bilti and on the place of destination the goods are delivered to the person who produces bilti. Before the Tribunal the respondents pleaded that they do not enquire whether the consignors and consignees are in existence or not. The stand so taken has no substance 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 addresses besides false classifications vis-a-vis transportation of such goods in and outside the State making themselves party to the episode of such fictitiou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....39;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 without resorting to subterfuges." 331. Reddy, J., we have already indicated, himself has stated that he is entirely....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 "there is no legal duty cast upon the plaintiff....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 pos....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t 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 considered 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 transports goods from outside the State of U.P. to outside the State of U.P. in terms of Section 52 of the Act and Rule 58 of the Rules, the authorities under the Act have no power to seize the goods and demand security for release thereof but where, as in the present case, the trans....
X X X X Extracts X X X X
X X X X Extracts X X X X
....¹à¤¨ किया जा रहा है तथा कर à¤à¤¾à¤° से बचने के लिये माल का परिवहन उतà¥à¤¤à¤° पà¥à¤°à¤¦à¥‡à¤¶ के बाहर दिलà¥à¤²à¥€ से सिलीगà¥à¤¡à¤¼à¥€, दारà¥à¤œà¤¿à¤²à¤¿à¤‚ग, पशà¥à¤šà¤¿à¤® बंगाल के लिठपरिवहन किया जाना पà¥à¤°à¤¦à¤°à¥à¤¶à¤¿à¤¤ किया जा रहा है, जिसके लिये दिलà¥à¤²à¥€ की फरà¥à¤®à¥‹à¤‚ के फरà¥à¤œà¥€ बिलों का पà¥à¤°à¤¯à¥‹à¤— किय....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... की गयी है। जहाठतक माल के मूलà¥à¤¯à¤¾à¤‚कन का पà¥à¤°à¤¶à¥à¤¨ है उपरà¥à¤¯à¥à¤•à¥à¤¤ विवेचन के आलोक में जबकि पà¥à¤°à¤¶à¥à¤¨à¤—त माल के साथ पà¥à¤°à¤ªà¤¤à¥à¤° इन - जेनà¥à¤¯à¥‚न ( INGENUINE) है. अनिगà¥à¤°à¤¹à¤£ करà¥à¤¤à¤¾ अधिकारी दà¥à¤µà¤¾à¤°à¤¾ वाहन में परिवहन किये जा रहे वासà¥à¤¤à¤µà¤¿à¤• माल का मूलà¥à¤¯à¤¾à¤‚कन माल का à¤à¥Œà¤¤à¤¿à¤• ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....बकि अनà¥à¤¸à¥‚ची-1 के कà¥à¤°à¤®à¤¾à¤‚क-5 पर Ornaments made of any metal or alloy other than gold or silver or any alloy thereof को करमà¥à¤•à¥à¤¤ रखा गया है। अतः 11 नग माल गिलà¥à¤Ÿ जà¥à¤µà¥ˆà¤²à¤°à¥€ को बिना जमानत अवमà¥à¤•à¥à¤¤ करने के आदेश दिये जाते है à¤à¤µà¤‚ जी०आर०सं०-74352 दिनांक 23-09-2016 के साथ सरà¥à¤µà¤¶à¥à¤°à¥€ जैन हारà¥à¤¡à¤µà¥‡à¤¯à¤°à¥à¤¸ लाल कà¥à¤‚आ दिलà¥à¤²à¥€ की उपलबà¥à¤§ रिà¤....
X X X X Extracts X X X X
X X X X Extracts X X X X
....श के बाहर जाने वाले माल के साथ माल से समà¥à¤¬à¤¨à¥à¤§à¤¿à¤¤ पà¥à¤°à¤ªà¤¤à¥à¤°à¥‹à¤‚ तथा बिल / बिलà¥à¤Ÿà¥€ आदि के अतिरिकà¥à¤¤ इस पारगमन घोषणपतà¥à¤° TDF - 1 को à¤à¥€ रखना अनिवारà¥à¤¯ होगा।" Document 3 “कमà¥à¤ªà¥à¤¯à¥‚टर परिपतà¥à¤° सं0 1617028 दिनांक 29.08.2016 संखà¥à¤¯à¤¾ - विधि - 4 (1) / सामानà¥à¤¯ निरà¥à¤¦à¥‡à¤¶ / 16-17 / 1351 / वाणिजà¥à¤¯ कर कारà¥à¤¯à¤¾à¤²à....
X X X X Extracts X X X X
X X X X Extracts X X X X
....¥€ को निमà¥à¤¨ दो बिनà¥à¤¦à¥à¤“ं पर चà¥à¤¨à¥Œà¤¤à¥€ दी गयी थी :- (1) कमिशà¥à¤¨à¤°, वà¥à¤¯à¤¾à¤ªà¤¾à¤° कर दà¥à¤µà¤¾à¤°à¤¾ परिपतà¥à¤° दिनांक 31.01.1987 के संदरà¥à¤ में याची का कथन था कि माल गोदाम में पहà¥à¤‚चने से पूरà¥à¤µ “no mans land" में होने के कारण माल का अà¤à¤¿à¤—à¥à¤°à¤¹à¤£ नहीं किया जा सकता। (2) "कारण बताओ नोटिस के उà....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ि उतà¥à¤¤à¤° पà¥à¤°à¤¦à¥‡à¤¶ मूलà¥à¤¯ संवरà¥à¤§à¤¿à¤¤ कर अधिनियम 2008 में à¤à¤¸à¤¾ कोई पà¥à¤°à¤¾à¤µà¤¿à¤§à¤¾à¤¨ नहीं है जिसके आधार पर कमिशà¥à¤¨à¤°, वाणिजà¥à¤¯ कर को यह अधिकार पà¥à¤°à¤¾à¤ªà¥à¤¤ हो कि वे अपने अधीनसà¥à¤¥ अधिकारियों को उतà¥à¤¤à¤° पà¥à¤°à¤¦à¥‡à¤¶ राजà¥à¤¯ के समसà¥à¤¤ à¤à¥‚-à¤à¤¾à¤— के अनà¥à¤¤à¤°à¥à¤—त माल को रोकने, जाà....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... कà¥à¤·à¥‡à¤¤à¥à¤° में धारा-45 à¤à¤µà¤‚ 45 के अनà¥à¤¤à¤°à¥à¤—त पà¥à¤°à¤¦à¤¤à¥à¤¤ अधिकारों दà¥à¤µà¤¾à¤°à¤¾ माल की जांच / अà¤à¤¿à¤—à¥à¤°à¤¹à¤£ की कारà¥à¤¯à¤µà¤¾à¤¹à¥€ की जा सकती है। वैसे à¤à¥€ पà¥à¤°à¤¶à¥à¤¨à¤—त परिपतà¥à¤° ततà¥à¤¸à¤®à¤¯ कारà¥à¤¯à¤°à¤¤ जॉच चौकियों की à¤à¥Œà¤—ोलिक सà¥à¤¥à¤¿à¤¤à¤¿ के कारण हो रहे करापवंचन की पà¥à¤°à¤à¤¾à¤µà¥€ जांच हेतà¥....