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The Commissioner, Trade Tax, U.P. Lucknow v. S/S Deepa Sales Corporation - SALES/TRADE TAX REVISION No. 1553 of 2006  RD-AH 18212 (27 October 2006)
TRADE TAX REVISION NO.1553 OF 2006
TRADE TAX REVISION NO.1554 OF 2006
TRADE TAX REVISION NO.1555 OF 2006
The Commissioner, Trade Tax U.P., Lucknow. ....Applicant
S/s Deepa Sales Corporation, Pratapgarh. ....Opp.party
Hon'ble Rajes Kumar, J.
These three revisions under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") are directed against the order of Tribunal dated 5th October, 2006 relating to the assessment year 2006-07 arising from the seizure proceedings.
Brief facts of the case are that on 12.09.2006 Trade Tax Officer, (Mobile Squad), Shahjahanpur checked three vehicles, UP-30A/5116, UP-30/7531 and UP-30/8377 loaded with MS Bar (Sariya). Alongwith the goods three bill no.54 dated 10.09.2006, bill no.57 dated 10.09.2006 and bill no.52 dated 10.09.2006 for 15.270 MT, 13.050 MT and 15.020 MT valuing Rs.3,11,508/-, Rs.2,66,220/- and Rs.3,06,408/- respectively were found. Three separate builties of M/s New Moti Transport Company were also found. On enquiry, it was found that the registration of the dealer/opposite party (hereinafter referred to as "Dealer") was cancelled on 28.05.2003, about three years back. No appeal against the said order was filed and the order of cancellation of registration had become final. It was also found that no business activity was carried on and no return was filed during the assessment years 2004-05 and 2005-06. Despite the registration being cancelled on 28.05.2003, the old registration number was mentioned in the aforesaid bills. The goods were seized on the ground that the goods were being transported with the intent to evade the tax and the dealer was not found bonafide dealer. The goods were seized and the security at 40% of the value of the goods was demanded. Dealer filed applications under the Proviso to section 13-A (6) of the Act before the Deputy Commissioner (Enforcement), Trade Tax Range-B, Bareilly. All the applications have been dismissed and the seizure of the goods as well as demand of security were upheld. Dealer filed three appeals before the Tribunal. Tribunal by the impugned order upheld the seizure of the goods but has directed the release of goods on furnishing of Indemnity Bond to the extent of two times of the tax, i.e. 8% of the value of the goods. Being aggrieved by the aforesaid order, present three revisions have been filed.
Heard Sri B.K. Pandey, Learned Standing Counsel and Sri S.D.Singh, learned counsel appearing on behalf of the dealer.
Learned Standing Counsel submitted that in the present case despite the registration of the dealer was cancelled on 28.05.2003, just to mislead and to defraud the revenue old registration number was mentioned in the invoices. The intent was very much clear to evade the tax, otherwise there could not be any possible reason to mention the old registration number in the invoices, which was not available to the dealer being cancelled three years back on 28.05.2003. In the circumstances, that the dealer was not found bonafide dealer and on the ground that the bills were not found to be a proper and genuine inference of an intent to evade the tax was drawn and accordingly, goods were seized. He submitted that though the seizure of the goods have been upheld by the Tribunal but the Tribunal has illegally directed the release of the goods on furnishing of Indemnity Bond to the extent of 8% of the value of the goods. Learned counsel for the dealer submitted that it was the case of the dealer that the goods have been loaded from the factory, M/s Alpha Springs Limited, Orai, Jalaun having its office at Kakadev, Kanpur and, the movement of goods were within the State of U.P. and, therefore, the goods were not liable to tax in the hand of the dealer and merely because old registration number was mentioned in the bills, the goods could not be seized. He submitted that the inference drawn by the authorities below that the goods were not entered in the books of account is also not justified and inasmuch as this inference has been drawn without making the proper enquiry and is pre-mature. In any view of the matter, he submitted that on the facts and circumstances of the case, direction of the Tribunal to release the goods on furnishing of Indemnity Bond to the extent of 8% of the value of goods is justified.
Having heard learned counsel for the parties, I have perused the order of Tribunal and the authorities below.
In my view, order of the Tribunal can not be sustained. The view of the Tribunal directing the release of the goods on furnishing of Indemnity Bond to the extent of 8% of the value of the goods in the circumstances of the case after upholding the seizure of the goods is patently illegal and perverse. In the present case, admittedly the registration of the dealer was cancelled on 28.05.2003 and the order of the cancellation of the registration had become final, inasmuch as no appeal was filed. Dealer did not carry on any business for three years, despite the aforesaid fact goods were being transported against the aforesaid bills showing the old registration number, prima-facie appears to be with the intent to mislead and defraud the revenue. It also appears to be with the intent to evade the tax, otherwise what could be the possible reason to use the invoice s having the old registration after three years. After the seizure of the goods, survey was also made by the authorities concerned at the so-called premises of the dealer on 22.09.2006 and it was found that no business activity was being carried on. At this stage the plea of the dealer that goods were purchased from M/s Alpha Springs Limited, Orai can not be accepted because along with the goods bills of M/s Alpha Springs Limited, Orai was not available. In the circumstances, it can not be said that the seizure of the goods was not justified. It is doubtful that the dealer is bonafide dealer. In such a circumstances, the release of goods only on Indemnity Bond to the extent of 8% of the value of the goods is not justified. In the circumstances, order of the Tribunal is modified to the extent that the authorities concerned are directed to release the goods on the deposit of 8% of the value of the goods and furnishing the security of the balance amount, demanded by the Trade Tax Officer, (Mobile Squad) in the form other than cash or bank guarantee to the satisfaction of Trade Tax Officer (Mobile Squad), Shahjahanpur. The authority concerned is also directed to conclude the penalty proceedings expeditiously, without prejudice to the findings recorded in the seizure proceedings.
With the aforesaid observations, all the three revisions are disposed of.
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