M/S Ranbaxy Laboratories Ltd. vs Commissioner Commercial Taxes ...
2022 Latest Caselaw 5757 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

Reserve Judgment
 
Court No. - 8
 

 
Case :- SALES/TRADE TAX REVISION No. - 90 of 2012
 

 
Revisionist :- M/S Ranbaxy Laboratories Ltd.
 
Opposite Party :- Commissioner Commercial Taxes Lucknow And Another
 
Counsel for Revisionist :- Ritwick Rai,Abhishek Anand,Alok Kumar Singh,Aviral Raj Singh,M.P. Devnath,Ritwick Rai
 
Counsel for Opposite Party :- C.S.C.
 

 
Hon'ble Alok Mathur,J.

1. Heard Sri Atul Gupta, Advocate assisted by Sri Aviral Raj Singh, learned counsel for the revisionist as well as Sri Rohit Nandan Shukla, learned counsel appearing for the opposite parties.

2. Present revision under Section 58 of the U.P. Value Added Tax Act, 2008 (hereinafter referred to as "the Act, 2008") has been filed against judgment and order dated 27.04.2012, passed by the Commercial Tax Tribunal, Lucknow (hereinafter referred to as "the Tribunal") in Second Appeal No. 273 of 2010, pertaining to assessment year 2008-09, whereby appeal of the revisionist has been dismissed.

3. The brief facts of the case are that the revisionist is a registered company under the Act, 2008 and engages in the trading of medicines. In the course of business revisionist import the medicines from outside the State of U.P. On 03.09.2008, vehicle No. HR 04 N 0193 which was going from Zirakpur, Mohali to Lucknow was intercepted by Assistant Commissioner, Commercial Tax (Mobile Unit)-III, Kanpur and inspection was carried out. During the course of inspection, it was found that the revisionist is transporting the consignment of medicines said to be stock transfer along with incompletely filled Declaration form in Form No.38 No. AA-829195. Revisionist did not fill Column No. 6 of the Form-38.

4. However, other documents which were found during search and inspection along with goods under transport by the mobile unit are as under-

I. Stock Transfer notes STN No. 53907401 Rs.1130674.00 and 53907408 dated 03.09.2008 Rs.732652.06 and STN No.53907409 dated 03.09.2008 Rs.7135507.00;

II. G.R. No.23870 of Transporter dated 03.09.2008 for 845 carton of medicines and

III. Form No.VAT-36 issued from Excise and taxation Department, Punjab No.BB-0465762, 0465763 and 0465764.

5. Under the above circumstances as the Column No. 6 of Form - 38 was left blank in contravention to provisions of Section 50 of the Act, 2008, a show cause notice no.2309 dated 08.09.2008 was issued. The revisionist filed his reply to the show cause notice and by order dated 09.09.2008, under Section 48, penalty order was passed. Thereafter revisionist deposited the security amount of Rs.10,84,660.00 and the goods were released.

6. Being aggrieved with the penalty order dated 30.09.2009, revisionist preferred first appeal under Section 55 of the Act, 2008 before the Additional Commissioner Grade-II (Appeals)-I, Lucknow which was dismissed by order dated 27.04.2012. Thereafter revisionist approached the Tribunal by filing second appeal under Section 57 of the Act, 2008.

7. The Tribunal confirmed the penalty vide order dated 27.04.2012 which has been impugned in this Revision petition on the following Questions of Law-

I. Whether in facts & circumstances of present case, judgment & Order dated 27.4.2012 passed by Ld. VAT Tribunal, Commercial Tax, Lucknow imposing/upholding Penalty upon Petitioner is perverse, illegal & erroneous in law & fact.

II. Whether in facts & circumstances of present case, judgment & Order dated 27.4.2012 passed by Ld. VAT Tribunal, Commercial Tax, Lucknow imposing/upholding Penalty upon Petitioner is contrary to mandate of Section 54 of UP Value Added Tax Act, 2008.

8. It has been submitted on behalf of the revisionist that truck carrying the said goods were intercepted and all the documents were inspected, where it was found that the truck was carrying Form - 38 wherein the details of the goods such as the quantity, total value in words and figures, name and address of the consignor etc. was clearly stated apart from the stock transfer notes and Form no. VAT 36 issued from the Excise and Taxation department Punjab. It has been submitted that all the details with regarding to the identification of the goods was clearly mentioned and all the details and papers were being carried along with the goods has been duly recorded by the Assessing Authority and therefore in the aforesaid circumstances it cannot be said that there was any intention to evade tax, and hence, the penalty order as well as appellate orders are arbitrary.

9. The second ground urged by the counsel for the revisionist is that the goods in any case were being carried from the zonal distributor to their own network of wholesalers and retailers as a measure of stock transfer. In support of the submission, it has been stated that the goods were duly accompanied by Form 36 issued by Excise and Taxation department Punjab, which is issued in the contingency of the goods being transported as a measure of stock transfer. As such there were no element of sales and therefore it cannot be said that there was any intention to evade Tax in the peculiar facts of the present case. In support of the contentions reliance has been placed upon the judgment of the this Court in the case of Commissioner of Commercial Tax vs Deepak trading Company Ghaziabad 2020(1) TMI 751, where after considering various judgments this court has held that there should be an intention to evade tax and merely because one column in Form - 38 is kept blank cannot be a reason in itself to levy penalty without a clear recording of satisfaction that the same is with the intention to evade tax.

10. Sri Rohit Nandan Shukla, Standing counsel appearing for the revenue has supported the order of the Commercial Tax Tribunal and stated that mandate of the provisions under Section 50 of the Act applies to all the goods except the goods named and described in Schedule I. Non mentioning of challan number or invoice number in Column-6 of Form No. 38 lead to an inference that in case of non-checking of goods, the said declaration form may be used for any other consignment of a similar quantity, quality, weight and value. According to provisions of Section 50 of the Act, 2008 read with Rule 54 it is clear that mere keeping Column no. 6 of Form - 38 blank, itself shows that the same has been done intentionally so that the same form can be reused to transport the goods again thereby the evading tax.

11. In Support of his submissions, he relied upon the decision in the case of Multitex Filtration Engineering Ltd., Noida vs. Commissioner of Commercial Tax, U.P., Lucknow 2009 NTN (Vol. 40) - 389 considered the scope of penalty under Section 54(1)(14) of the Act, 2008.

12. This question has been considered by this Court in the case of Commissioner of Commercial Tax vs Deepak Trading Company Ghaziabad 2020(1) TMI 751 and answered as follows:-

"19. Non-filling up of column no. 6 i.e. not mentioning of bill / cash memo / chalan / invoice number may lead to an inference that in case of non-checking of goods the declaration form may be re-used for importing goods of same quantity, weight and value to evade payment of tax but it cannot be the sole ground to impose penalty under Section 54(1)(14) of the Act, 2008. Satisfaction has to be recorded after giving opportunity to the dealer / person and after considering all the relevant materials / evidences on record that there was an intention to evade payment of tax. The guilty mind is necessary to be established to impose penalty under Section 54(1)(14) of the Act, 2008. If the last fact finding authority i.e. the tribunal has recorded a finding of fact that there was no intention to evade payment of tax, same cannot be interfered with in revision under Section 58 of the Act, 2008 provided the finding is perverse or it is based on consideration of irrelevant material or non consideration of relevant material."

13. The aforesaid judgment has been relied upon by another bench of the Allahabad high court in the case of M/S Protein Impax Pvt Ltd vs The commissioner of commercial tax up Lucknow 2022 [3) TMI 859.

14. The case of Multitex Filtration Engineering Ltd., Noida vs. Commissioner of Commercial Tax, U.P., Lucknow 2009 NTN (Vol. 40) - 389 is clearly distinguishable from the facts of the present case where the goods were being transferred for stock transfer where no element of sale was involved.

15. Considering the facts of the present case in light of the aforesaid judgments it is noticed that the goods were being carried with all the relevant documents from which the goods could be identified and more specifically the goods were accompanied by Form - 38 issued by the Punjab Government as the goods were being transported as measure of stock transfer and in such transaction as there is no element of "sale" and hence not Liable for levy of Sales tax and therefore it cannot be said that there was any intention to evade tax. The revenue has also not denied that the revisionist had produces From - 38 Issued by the Excise and Taxation department Punjab, or that the goods were not being transferred as measure of Stock Transfer, and there is no other material or any reason to come to a conclusion that there was any intention to evade tax.

16. This Court is of the considered view that the case of the revisionist is covered by the judgment in the case of Commissioner of Commercial Tax vs Deepak Trading Company Ghaziabad, 2020(1) TMI 751. Merely because the Column 6 of Form - 38 was blank the penalty has been imposed despite the fact that there is no other material to show that there was any intention to evade tax and therefore the findings recorded in the penalty order as well as the in impugned appellate order are clearly perverse and contrary to record and hence are set aside. In light of the above the revision is allowed and the questions are answered accordingly.

Order Date :- 04.07.2022

A. Verma

(Alok Mathur, J.)