M/S. Bright Road Logistics vs Additional Commissioner Of
2021 Latest Caselaw 6850 Kant

  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

    DATED THIS THE 20TH DAY OF DECEMBER, 2021

                       PRESENT

        THE HON'BLE MRS.JUSTICE S.SUJATHA

                          AND

    THE HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY

                    S.T.A.No.8/2018

BETWEEN :

M/s BRIGHT ROAD LOGISTICS
NO.20, NAYANDAHALLI,
BEHIND TORINO FACTORY,
MYSORE ROAD, BANGALORE-560039.                  ...APPELLANT

               (BY SRI K.G.KAMATH, ADV.)

AND :

ADDITIONAL COMMISSIONER OF
COMMERCIAL TAXES, (ZONE II),
VANIJYA TERIGE BHAVAN-I
GANDHINAGAR, BANGALORE-560009              ...RESPONDENT

            (BY SRI JEEVAN J. NEERALGI, AGA.)

      THIS STA IS FILED UNDER SECTION 66(1) OF THE
KARNATAKA VALUE ADDED TAX ACT, 2003 AGAINST THE
ORDER DATED 27.01.2018 PASSED IN NO.ADCOM/ZONE-
II/APP-2/SMR/CR-05/2016-17  ON   THE   FILE   OF   THE
ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE-
II, GANDHINAGAR, BANGALORE, SETTING ASIDE THE APPEAL
ORDER 24.08.2015 BEARING NO.VAT.AP 945/11-12 PASSED BY
JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS)-2
BANGALORE AND RESTORING THE REASSESSMENT ORDER
FILED AGAINST THE PENALTY ORDER DATED 14.09.2011 ON
THE FILE OF THE ACCT (ENFORCEMENT), TUMKUR PASSED
                            -2-



UNDER SECTION 53(12) OF THE KVAT ACT, 2003 FOR THE TAX
PERIODS FROM APRIL 2011 TO MARCH 2012.

      THIS APPEAL COMING ON FOR ADMISSION, THIS DAY,
S. SUJATHA, J., DELIVERED THE FOLLOWING:

                    JUDGMENT

This appeal is filed by the appellant under Section

66(1) of the Karnataka Value Added Tax Act, 2003 ('Act'

for short) assailing the order dated 27.1.2018 passed by

the Additional Commissioner of Commercial Taxes,

Bengaluru, under Section 64(1) of the Act, whereby the

appeal order dated 24.8.2015 passed by the first

appellate authority has been set aside and the penalty

order passed on 14.9.2011 under Section 53(12) of the

Act by the ACCT (Enforcement), Tumakuru, has been

restored.

2. The appellant - M/s Bright Road Logistic is a

transporter of goods. On 16.5.2011, in the goods

vehicle bearing No.HR-61-A-4041 the appellant has

transported the consignment - goods sold by M/s

Bhagawathi Enterprises, Salem, Tamil Nadu (consignor)

to M/s Metal Traders, Delhi, as per the invoice bearing

No.032, dated 16.5.2011 for Rs.57,41,304/-. The ACCT

(Enforcement), Tumakuru, having received the

information that the transporter has carried the scrap of

Copper, Aluminium and Brass, totally valued at

Rs.58,56,130/- in vehicle bearing No. HR-61-A-4041

which was alleged to be robbed and the police had

found the same in vehicle Nos.KA-05-AC-7002 and KA-

13-8671 before a godown at Madanayakanahalli,

Bengaluru, intercepted the vehicle and noticed that the

provisions of Section 53(2) of the Act were not complied

with. Thus, levied penalty under Section 53(12) of the

Act at two (2) times the rate of tax.

3. Being aggrieved, the appellant preferred an

appeal before the Joint Commissioner of Commercial

Taxes (Appeals)-2, Bengaluru, who allowed the appeal.

The said appeal order having been found erroneous and

prejudicial to the interest of the Revenue, the Additional

Commissioner of Commercial Taxes, exercised the

power under Section 64 of the Act in initiating the suo

moto revisional proceedings and passed the order

impugned herein as aforesaid after affording an

opportunity of filing objections and hearing the

appellant. Being aggrieved, the appellant has preferred

this appeal.

4. Learned counsel for the appellant submitted

that the revisional authority has invoked the revisional

powers mainly for not possessing the transit pass which

certainly would be a violation of the provisions of

Section 54, but not Section 53(2) of the Act. The first

appellate authority having analyzed the material aspects

had allowed the appeal, as such, there was no scope for

revision by the Additional Commissioner.

5. Learned counsel for the Revenue placing

reliance on the Coordinate Bench decision of this Court,

in the appellant's own case in STRP.No.83/2018 and

connected matters, (D.D 19.7.2021) submitted that the

identical issue of consignment moving from Salem to

Delhi through Karnataka as contended by the appellant

herein was examined with respect to the consignor

M/s Bhagawathi Enterprises; having noticed the

mismatch in Tin number of the consignee with the

declaration made in the Lorry receipt and the invoice as

well as no recorded transit pass in respect of the

consignment, has confirmed the action of the

authorities in treating the same as a case of evasion of

tax calling for imposition of penalty. It is submitted that

the said ruling is applicable to the present case also.

6. We have considered the rival submissions of

the learned counsel appearing for the parties and

perused the material on record.

7. It is evident that the Check Post Officer has

levied penalty under Section 53(12) of the Act for breach

of Section 53(2) of the Act. The appellate authority

came to a conclusion that the original documents

tendered at the HRCP (in), Attibele, which is the border

entry check post of Karnataka were not traceable on

account of theft and since the enforcement authority

had only an access to verify the duplicate set of

documents, could not have arrived at a conclusion that

the consignor M/s Bhagawathi Enterprises is from

Salem, Tamil Nadu, and the Cosignee being at New

Delhi, in transit, no penalty could have been levied by

the check post officer. The revisional authority having

found the same being erroneous and prejudicial to the

interest of the Revenue, has rightly initiated the suo

moto revisional proceedings, more particularly, when the

check post officer and ACCT (Enforcement) had

conducted thorough investigation into the genuineness

of the consignment, the goods and had come to a

conclusion that the goods have been loaded in

Karnataka by M/s Bhagawathi Enterprises, the

movement of goods not being established with the

relevant documents, in the background of non existing

address of the consignee - M/s Metal Traders, Delhi,

has held that the order of the first appellate authority

was unjustifiable.

8. The Coordinate Bench of this Court has

considered the case of the appellant relating to the

similar inter-State transit goods with respect to transit

pass in respect of the consignment not being recorded

in the inward check post and has held that the levy of

penalty was justifiable. As aforesaid, the check post

officer has categorically given a finding that the

documents have not been tendered for examination at

the inward check post of the Karnataka State and no

seal of the check post in the State was found in invoices

in addition to the transit pass required for inter-State

transit. The said discrepancies would certainly come

within the ambit of Section 53(2) of the Act and thus,

imposition of penalty under Section 53(12) for violation

of the provisions of Section 53(2) of the Act cannot be

found fault with. Thus, the proceedings initiated by the

Additional Commissioner of Commercial taxes to set

aside the order of the first appellate authority cannot be

held to be unjustifiable.

The appeal is bereft of merits, accordingly stands

dismissed.

Sd/-

JUDGE

Sd/-

JUDGE

nd