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M/S J.P. Industries v. The Commissioner, Trade Tax, U.P. Lucknow - SALES/TRADE TAX REVISION No. 2712 of 2004 [2005] RD-AH 54 (4 January 2005)


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Court no. 55

Trade Tax Revision no.2712 of 2004.

M/S J. P. Industries, Gwalior (M.P.) ... Revisionist.

Commissioner of Trade Tax, U. P. Lucknow. ...Respondent.


Hon'ble Rajes Kumar, J.

Heard Counsel for the parties.  With the consent of both the parties the present revision is disposed of at the admission stage in accordance with law.

The present revision is directed against the order of Tribunal dated 07.12.2004 arising from the seizure proceeding under Section 13-A of the Act.

The brief facts of the case stated in the revision are that the applicant had purchased raw-Agarbatti from M/S New Trading Agarbatti Company, Gaya (Bihar) against Invoice no.161 dated 26.10.2004 and intended to transport the same to Gwalior (M.P.) where it was carrying on the business, for which, builty no.45 dated 26.10.2004 was prepared.  It appears that at the entry check post Naubatpur Trip-sheet was obtained in respect of Agarbatti declaring it non-taxable on 27.10.2004.  When the Vehicle reached at the Exit Check Post Ambavoy on 29.10.2004, goods and documents were checked and it was found that the goods loaded in the Vehicle was the raw material of Agarbatti and not the Agarbatti as such, therefore, the goods were seized on the ground that the goods imported from Bihar were sold inside the State of U. P. and the another goods have been loaded within the State of U. P. which were not supported by proper documents.  The Check Post Officer demanded security at Rs.80,000/- on the value of Rs.2,00,000/- being 40 per cent for release of the goods.  Application under the proviso of Section 13-A (6) was rejected.  Applicant filed appeal before the Tribunal which was allowed in part.  Tribunal up held the seizure of the goods, but has produced the security to the extent of 20 per cent of the value of goods which comes to Rs.40,000/-.Learned Counsel for the applicant submitted that the seizure of the goods is patently erroneous.  He submitted that it has not been disputed that the goods were coming from Bihar and was going to Gwarlior. He further submitted that at the entry check post, inadvertently instead of Transit Pass, Trip-sheet was applied mentioning Agarbatti while the Invoices and builty which were produced at the entry check post shows that same relate to raw Agarbatti which was actually purchased and sought to be transported to Gwalior from Bihar.  He also explained that in fact the raw-material of Agarbatti was in the form of Agarbatti and only perfume was to be applied to the stick of Agarbatti which was found at the Exit Check Post.  The submission is that the goods which were purchased from Bihar and are being transported and found available at the Exit Check Post are same and therefore, inference drawn by the Check  Post Officer  that the Agarbatti was imported from out side the State of U. P. which were sold and the raw-material of Agarbatti is being transported to outside the State of U. P. with intent to evade tax is unjustified.  Learned Standing Counsel submitted that on the facts and circumstances of the case, seizure is justified.

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

In my opinion, disputed question of fact are involved in the present revision which requires further investigation which can appropriately be examined in the penalty proceeding.  Seizure proceeding is a summary proceeding.  On the basis of material available on record,  prima facie, the seizure of the goods can not be said to be unjustified.  However, it is open to the applicant to adduce all the relevant material in support of his contention in the penalty proceeding which may be investigated and be finally decided.  However, looking to the facts and circumstances of the case, in my view, nature of security is liable to modified.  

The authority concern is directed to release the goods on furnishing of security in the form of Bank guarantee to the extent of amount demanded by the Tribunal.  The Authority concern may also take sample of the goods seized for the purposes of adjudication of the issue in the penalty proceeding.  The authority concern is also directed to complete the penalty proceeding or any other proceeding in pursuance of the seizure of the goods within a period of two months.

With the aforesaid observations, revision is disposed of.




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