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2019 Supreme(All) 660
IN THE HIGH COURT OF ALLAHABAD
PANKAJ MITHAL, MANOJ KUMAR GUPTA, SUNEET KUMAR, JJ.
M/S Ntl Logistics (India) Pvt. Ltd. - Appellant
Versus
Commercial Tax Tribunal & Others. - Respondents
Sales/Trade Tax Revision No. 326 of 2017
Decided On : 25-01-2019
For the Appellant : Markanday Singh, Abhishek Rai.
Headnote:
U.P. Value Added Tax Act, 2008 – Section 52 – Conflict between Judgments of two Co-ordinate Benches – whether the Transit Declaration Form (TDF) is mandatory requirement in view to the circular issued by the Commissioner read with Section 52 of the Act and Rule 58 of the Rules or in the alternative upon non-production of the TDF on interception of the goods whether a presumption that the goods are meant for sale within the State can mandatorily be drawn in view of Section 52 read with Rule 58 and the circular dated 3 September 2013 issued by the Commissioner – Held, observations made in M/s Prakash Transport Corporation that good cannot be seized for non-production of TDF was confined to the facts of that case, but cannot be approved as laying down any general principle of law. Again, the observations made in M/s S.B. International were based more on concession of the parties than laying down any law of general application. Thus, none of the above judgments lay down any general proposition of law to be treated as a precedent and therefore, no question of conflict arises between the two judgments – Provision relating to carrying of TDF is a machinery provision. The production of TDF during transit is mandatory in the sense that it thereby denudes the authorities of their power to draw presumption under Section 52/Rule 58. Absence of the same does not mandatorily lead to the conclusion that goods are meant for sale within the State. It only gives rise to a rebuttable presumption. The presumption is rebuttable subject to limitations discussed above during course of seizure proceedings and without any limitation whatsoever at the stage of penalty proceedings – Answered accordingly.
Facts of the case:
Conflict between judgments of two Co-ordinate Benches – whether the Transit Declaration Form (TDF) is mandatory requirement in view to the circular issued by the Commissioner read with Section 52 of the Act and Rule 58 of the Rules or in the alternative upon non-production of the TDF on interception of the goods whether a presumption that the goods are meant for sale within the State can mandatorily be drawn in view of Section 52 read with Rule 58 and the circular dated 3 September 2013 issued by the Commissioner.
Findings of the court:
Observations made in M/s Prakash Transport Corporation that good cannot be seized for non-production of TDF was confined to the facts of that case, but cannot be approved as laying down any general principle of law. Again, the observations made in M/s S.B. International were based more on concession of the parties than laying down any law of general application. Thus, none of the above judgments lay down any general proposition of law to be treated as a precedent and therefore, no question of conflict arises between the two judgments – Provision relating to carrying of TDF is a machinery provision. The production of TDF during transit is mandatory in the sense that it thereby denudes the authorities of their power to draw presumption under Section 52/Rule 58. Absence of the same does not mandatorily lead to the conclusion that goods are meant for sale within the State. It only gives rise to a rebuttable presumption. The presumption is rebuttable subject to limitations discussed above during course of seizure proceedings and without any limitation whatsoever at the stage of penalty proceedings.
Result : Answered accordingly
Manoj Kumar Gupta, J.
This reference to Larger Bench is occasioned by order of one of us (Hon. Suneet Kumar, J) noticing divergence of opinion between judgements of two Co-ordinate Benches in M/s Prakash Transport Corporation Vs. CCT, 2013 UPTC 1456 and M/s S.B. International Gularbhoj Vs. The Commissioner, Commercial Tax, Lucknow 2013 UPTC 1144. The questions that have been referred to us are:-
"(i) which of the two cases i.e. M/s Prakash Transport Corporation vs. CCT or M/s S.B. International Gularbhoj vs. The Commissioner, Commercial Tax Lucknow, lays down the correct proposition of law;
(ii) whether the Transit Declaration Form (TDF) is mandatory requirement in view to the circular issued by the Commissioner read with Section 52 of the Act and Rule 58 of the Rules or in the alternative upon non-production of the TDF on interception of the goods whether a presumption that the goods are meant for sale within the State can mandatorily be drawn in view of Section 52 read with Rule 58 and the circular dated 3 September 2013 issued by the Commissioner."
2. In M/s Prakash Transport Corporation, a vehicle carrying the goods was seized by the mobile squad of the commercial tax department of the State on 13.9.2013 on account of non-production of transit declaration form (for short 'TDF'). In response to show cause notice, the noticee produced a TDF downloaded from the official website of the department on 18.9.2013. The authorities refused to place reliance upon the same, as according to them, the TDF should have been carried by the driver alongwith him. Since he failed to carry the same, consequently, it was presumed under Section 52 of the U.P. Value Added Tax Act, 2008 (for short 'the Act') read with Rule 58 that the goods were meant for sale within the State. Resultantly, a seizure order exercising power under Section 48/50/51 read with Rule 58 was passed. The learned Single Judge deciding the validity of the seizure order held that the authorities had no power to seize the goods for non-production of TDF, though the same may attract penal consequences.
3. In M/s S.B. International also the driver of the vehicle failed to produce TDF at the time vehicle was intercepted by the authorities. Here also, it was treated to be a violation of the mandatory provisions of Section 52 read with Rule 58. In response to show cause notice, the vehicle owner produced the TDF generated two days after the interception of the vehicle. As in case of M/s Prakash Transport, the authorities did not accept the same but treated the non-production of TDF at the time of interception as a violation of the mandatory provisions of Section 52 read with Rule 58 and directed for seizure of the goods. However, in this case, the seizure order was given a seal of approval by this Court.
4. Before we proceed to deal with the divergent views, it would be advantageous to take note of certain provisions of the Act and the amendments made therein from time to time.
Section 52 of the Act and Rule 58, which were the edifice upon which the seizure orders rested, read thus:-
"52. Provision for goods passing through the State - When a vehicle coming from any place outside the State and bound for any other place outside the State, and carrying goods referred to in sub-section (1) 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."
"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-in-charge of
