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THE COMMISSIONER OF TRADE TAX U.P. LUCKNOW versus S/S ADANI WILMORE LTD

High Court of Judicature at Allahabad

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The Commissioner Of Trade Tax U.P. Lucknow v. S/S Adani Wilmore Ltd - SALES/TRADE TAX REVISION No. 1096 of 2005 [2006] RD-AH 7651 (12 April 2006)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

RESERVED

TRADE TAX REVISION NO. 1096 OF 2005.

The Commissioner, Trade Tax, U.P.                 Applicant                     Versus

S/S Adani Wilmore, Limited, Gujarat.                                    Opp-party

Hon'ble Rajes Kumar, J.

Present revision under section 11 of the U.P. Trade Tax Act (hereinafter referred to as the "Act") is directed against the order of the Tribunal dated 18th June, 2005 relating to the assessment year, 2005-2006 arising from the seizure proceeding under section 13-A (6) of the Act.

At the Bharauli check post, four vehicles bearing nos. U.P.-61A/0795, U.P.-65-A/1291, U.P.-66D/9055 and UCU-282 were detained on 12th May, 2005. In all the vehicles refined oil were found loaded. It was found that the vehicles were coming from Varanasi Railway Station and were going to Patna and along with the goods, no documents relating to Central Sales Tax were found. Subsequently, vide order dated18.5.2005, the goods were seized. The check post authority has valued the goods at Rs. 12, 99, 000/- and demanded the security at Rs. 3, 89, 591/- in cash for the release of the goods. The opposite party filed an application under the proviso to Section 13-A (6) of the Act before the Deputy Commissioner (Enforcement), Trade Tax, Azamgarh Range, Ballia. The Deputy Commissioner (Enforcement) vide order dated 21.5.2005 rejected the application. It appears that the opposite party has furnished the security as demanded by the check post officer and got the goods released on 22.5.2005. However, after the release of the goods, opposite party filed appeal before the Tribunal. Against the order of the Deputy Commissioner (Enforcement) passed under section 13-A (6) of the Act, Tribunal by the impugned order allowed the appeal. Tribunal has quashed the seizure of the goods and has discharged the security furnished by the opposite party and directed the refund of the security. Being aggrieved by the order of the Tribunal, Commissioner of Trade Tax filed the present revision.

Learned Standing Counsel submitted that the entertainment of the appeal by the Tribunal and decision on merit, quashing the seizure of the goods and direction to return the security, after furnishing of security and the release of the goods is absolutely illegal and bad in law. He submitted that under section 13-A (6) of the Act, security is being demanded to cover the penalty likely to be imposed and on the deposit of such security, goods so seized may be released. Thus, the proceeding under section 13-A (6) of the Act is of a summary nature and once the goods is released, proceeding under section 13-A (6) of  the Act stand concluded and the proviso to Section 13-A (6) of the Act stand complied with. In the circumstances, the appeal under section 10 (2) of the Act is not maintainable inasmuch as the person concerned ceases to be an aggrieved person to the direction under the proviso to sub-section (6) of Section 13-A of the Act. In support of his submission, he relied upon the decision of this Court in the case of M/S Brajraj Dori Niwar Co. Versus Commissioner of Trade Tax reported in 2001 UPTC 291.

Learned counsel for the opposite party submitted that under section 10 (2) of the Act appeal lies against the direction under the proviso to sub-section (6) of Section 13-A of the Act. He submitted that in the present case, appeal was filed against the order of the Deputy Commissioner (Enforcement) passed under the proviso to Section 13-A (6) of the Act. Thus, the appeal was maintainable before the Tribunal and the Tribunal has rightly decided the appeal on merit. In support of his contention, he relied upon the decisions of this Court in the case of M/S Amit Oil Carriers, Mathura Versus Commissioner of Sales Tax reported in 1993 UPTC, 1066 and M/S Square Automation, Bombay Versus Commissioner of Sales Tax reported in 1993 UPTC, 23.

Having heard the learned counsel for the parties, I have perused the order of the Tribunal and the authorities below.

Section 13-A (6) and Section 10 (2) of the Act reads as follows:

"Section 13-A. Power to seize.

(6) The officer seizing the goods 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, an order in writing mentioning the fact of such seizure and indicating the amount that would be sufficient to cover the tax and penalty likely to be assessed and 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 of Sales Tax or such other officer, not below the rank of an Assistant Commissioner of Sales Tax, as may be authorized in this behalf by the Commissioner of Sales Tax, may, for sufficient reasons to be recorded in writing direct that the goods be released without any deposit or on depositing such lesser amount, or furnishing security in such nature other than cash, as he may deem fit."

"Section 10. Sales Tax Tribunal.

Any person aggrieved by an order passed by an appellate authority under section 9 (other than an order referred to in sub-section (4-A) of that Section) or by the Revising Authority under section 10-B, or by the Commissioner of Sales Tax under sub-section (2-B) or sub-section (3) of section 4-A, or by a decision given by the Commissioner of Sales Tax under section 35 or by a direction given under the proviso to sub-section (6) of section 13-A may, within ninety days from the date of service of the copy of such order, decision or direction on him, prefer an appeal to the Tribunal.

Provided that where the disputed amount of tax, fee or penalty does not exceed two thousand rupees and no question of law is involved, the appellant may, at his option, request the Tribunal in writing for summary disposal of his appeal, whereupon the Tribunal may decide the appeal accordingly.

For the purposes of this sub-section, the expression ''any person' in relation to any order passed by an authority other than the Commissioner of Sales Tax, includes the Commissioner of Sales Tax and in relation to any order passed by the Commissioner of Sales Tax includes the State Government."

Under section 10 (2) of the Act, any person aggrieved by an order or direction under the proviso to sub-section (6) of Section 13-A of the Act can prefer an appeal to the Tribunal. The proviso to Section 13-A (6) of the Act provides that Commissioner or any other officer, may for sufficient reasons to be recorded in writing direct that the goods be released without any deposit or on depositing such lesser amount, or furnishing security in such nature other than cash, as he may deem fit. The situation to exercise the powers under the proviso arises after the order being passed by the authority seizing the goods and demanding the security under section 13-A (6) of the Act to cover the penalty likely to be imposed for the release of the seized goods. Thus, it is clear that while exercising the power under the proviso to Section 13-A (6) of the Act, the validity of the seizure is to be examined. However, in case, if after the seizure of the goods and the demand of security by the officer concerned, if the security is furnished and the goods are released, the power under the proviso to Section 13-A (6) of the Act could not be exercised inasmuch as after the furnishing of security and the release of the goods, nothing left to be decided under the proviso.

From the perusal of the provision of Section 13-A (6) of the Act, it is clear that the security is demanded to cover the penalty likely to be imposed. Thus, nature of the proceeding is summary in nature. In this view of the matter, once the security is furnished and the goods is released, no grievance exist and the entire proceeding under section 13-A (6) of the Act stand concluded and final. Seizure proceeding is thereafter to be followed by the penalty proceeding. In the penalty proceeding, in case, if no penalty is levied or a lesser amount of penalty is levied than the amount of security is liable to be refunded and in other cases, the amount of security is liable to be adjusted with the amount of penalty. In these circumstances, I am of the view that once the goods are released, the appeal is not maintainable against the direction under the proviso to Section 13-A (6) of the Act as the said direction stand complied on the release of the goods and grievance ceases to exit. In the case of M/S Brajraj Dori Niwar Co. Versus Commissioner of Trade Tax (supra) similar view has been taken.  This Court held as follows.

"Having heard the learned Counsel for the parties, I find that admittedly the Second Appeal No.22 of 1998 had been filed by the applicant after he had deposited amount of security of Rs.7500 and whereafter the seized goods had been released, hence the second appeal was not maintainable. The finding recorded by the Tribunal, therefore, cannot be taken to be binding as second appeal has been held to be not maintainable. This revision is also misconceived as has been held  in the case of TTR No.772 of 1998, Commissioner of Trade Tax, U.P., Lucknow Vs. S/S East India Transport Agency, U.P. Border, Ghaziabad, decided on 11th January, 1999, Trade Tax Revision No. 1011 of 1998, Commissioner of Trade Tax, U.P. Lucknow V. S/S U.T. Limited, Plot No.1, Audhyogic Chetra, Sahibabad, Ghaziabad, decided on 6th August, 1999 and Trade Tax Revision No.309 of 1999, M/S Vijay Ispat, North G.T. Road, Opposite Jasipura Chowk, Ghaziabad V. Commissioner of Trade Tax, U.P. Lucknow, decided on 2nd August, 1999. In view of the above, this revision is misconceived and not maintainable."

The cases relied upon by the learned counsel for the opposite party are not much helpful. In the case of M/S Amit Oil Carriers, Mathura Versus Commissioner of Sales Tax (supra) question of maintainability of appeal after the goods being released has not been raised and adjudicated. In the case of M/S Square Automation, Bombay Versus Commissioner of Sales Tax (supra), revision was filed under section 11 of the Act against the order of the Tribunal confirming the seizure of the goods and demanding the security at the interim stage, court directed the release of the goods on furnishing of security and on furnishing of security, goods was released. At the time of final hearing, it was argued by the learned Standing Counsel that since the goods have been released, revision has become infructuous, but relying upon the Division Bench decision of this court in Writ Petition No.1130 of 1990 Aster Technologies Versus State of U.P. decided on 1st August, 1990. Learned Single Judge, decided the revision on merit. With due respect to the decision of Learned Single Judge, it is stated that in Writ Petition No.1130 of 1990 Aster Technologies Versus State of U.P. decided on 1st August, 1990 such issue was not involved. In this view of the matter no reliance can be placed.

For the reasons stated above, I am of the view that the appeal before the Tribunal was not maintainable and the Tribunal should have not decided the appeal on merit. Thus, the order of the Tribunal is liable to be quashed. However, I direct the authority concerned to initiate any proceeding in consonance to the seizure order within a period of 15 days from the date of presentation of certified copy of this Court and conclude the proceeding within another one month.

In the result, revision is allowed. Order of the Tribunal is set aside and the authority concerned is directed to initiate any proceeding in consonance to the seizure order within a period of 15 days from the date of presentation of certified copy of this Court and conclude the proceeding within another one month

Dated.12.04.2006VS.


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Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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