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Commissioner Trade Tax, U.P. Lucknow v. Sri Sunil Kumar - SALES/TRADE TAX REVISION No. 5 of 2005 [2005] RD-AH 131 (10 January 2005)


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


Sri Sunil Kumar, Proprietor, S/S S.K.

Traders, Zaidpur, Barabanki. ....Opp.party


Hon'ble Rajes Kumar, J.

Present revision under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 15.12.2004 for the assessment year 2004-05 arises from the proceedings under section 13-A (6) of the Act, by which Tribunal has directed the release of seized goods without furnishing any security.

Brief facts of the case are that one vehicle no.UP-78/B-8612 loaded with 45 drums of mentha oil was checked by the Trade Tax Officer, Mobile Squad, Kanpur on 11.10.2004, which was going from Barabanki  to Delhi. Alongwith the goods one despatch note no.46 dated 09.10.2004 of M/s S.K.Traders, Zaidpur, Barabanki, builty no.177 dated 09.10.2004, Form-49 no.0225441 and photocopy of the agreement was found. Goods were detained on the ground that in despatch note farmer voucher no.7779 to 7942 were mentioned but the same were not found enclosed and it was shown that the said goods were purchased from 164 farmers but the persons, from whom goods have been purchased  no voucher was available and their name and address were not mentioned and accordingly, they have been treated non-bonafide dealer. It was also found that the purchase tax has also not been recovered and the entries of such goods were not properly accounted for. On the basis of the aforesaid ground, notice was given to Dev Lok Singh, driver of the vehicle and Ajay Kumar Mishra, owner of the vehicle. It appears that M/s S.K.Traders, Barabanki appeared before the Trade Tax Officer, Mobile Squad and filed the reply of the show cause notice. However, explanation given in the reply was not accepted and on the value of Rs.38,25,000/-, security for Rs.15,30,000/- was demanded in cash. Application under the proviso to section 13-A (6) of the Act was dismissed by the Deputy Commissioner (Enforcement) Trade Tax, Kanpur vide order dated 10.11.2004. Dealer filed appeal before the Tribunal, which was allowed by the impugned order and the Tribunal directed the release of the seized goods without any security.

Heard learned counsel for the parties.

Learned Standing Counsel submitted that the release of goods without any security is illegal and unjustified on the facts of the case. He submitted that the purchase voucher, which is annexed at Para 60, which was filed before the Trade Tax Mobile Squad shows that farmers have sold mentha oil to M/s Sharp Aeromatic India Delhi and, therefore, they were liable for tax under the Central Sales Tax Act and they were not bonafide dealer and also not registered under the U.P. Trade Tax Act and Central Sales Tax Act and they did not appear before the authority concerned and the books of account have also not been produced. Therefore, the seizure of the goods was justified. Learned counsel for the dealer/opposite party (hereinafter referred to as "Dealer") submitted that on the basis of the agreement  entered into between M/s S.K.Traders, Barbanki and M/s Sharp Aeromatic India Delhi, mentha oil were purchased from 164 formers for and on behalf of Ex-U.P. Principal and after purchasing the goods, same were being despatched outside the State of U.P. at their destination and, therefore, purchases were in the course of inter-State purchases and neither the purchase nor the sales were liable to tax under the law laid down by the Apex Court in the case of C.S.T Vs. M/S Bakhtawar Lal Kailash Chandra reported in 1992 UPTC  page 971.

I have perused the order of Tribunal and the authorities below.

Perusal of the order of Tribunal shows that the Tribunal has accepted the plea of the dealer that the purchases were made by M/s S.K.Traders for and on behalf of Ex-U.P. Principal namely, M/s Sharp Aeromatic India Delhi and has also found the entries relating to the goods in the books of account of M/s S.K.Traders, Barabanki. Accordingly,  Tribunal came to the conclusion that the conditions of section 13-A (1-A) of the Act was not fulfilled for the seizure of the goods and directed the release of goods without security.

After hearing learned counsel for the parties, I am of the view that at this stage, it would not be appropriate to adjudicate the issue whether the purchases were made for and on behalf of Ex-U.P. Principal by M/s S.K.Traders, Barabanki and whether it was a direct sale by the various farmers to M/s Sharp Aeromatic India Delhi as argued by learned Standing Counsel. Since these are disputed question of fact and need proper investigation. These aspects of the matter are to be examined by the assessing authority. However, on the facts and circumstances of the case, I direct the authorities concerned to release the goods forthwith on furnishing of indemnity bond to the extent of the amount of tax and may also conclude the proceeding within a period of three months  without prejudice to the findings recorded by the Tribunal and authorities below.

With the aforesaid observation, revision is disposed of.




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