Karnataka High Court
M/S. Ocean Cargo vs The Joint Commissioner Of on 15 April, 2024
Author: S.G.Pandit
Bench: S.G.Pandit
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STRP No. 2 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF APRIL, 2024
PRESENT
THE HON'BLE MR JUSTICE S.G.PANDIT
AND
THE HON'BLE MR JUSTICE C.M. POONACHA
SALES TAX REVISION PETITION NO. 2 OF 2024
BETWEEN:
M/S. OCEAN CARGO
REPRESENTED BY ITS
SRI JEEVAN TALWAR
AGED ABOUT 46 YEARS,
NO.12-2-188/33, 2ND FLOOR
POOJA PALACE COMPLEX
CARSTREET, MANGALORE-575001
PAN AAATN5Y19R
...PETITIONER
(BY SRI. MOHAMMED MONISH SOWKAR.,ADVOCATE)
AND:
Digitally
signed by 1. THE JOINT COMMISSIONER OF
BHARATHI S
COMMERCIAL TAX, (APPEALS)
Location:
HIGH COURT MALNAD DIVISION
OF SHIVAMOGGA 577205
KARNATAKA
2. THE COMMERCIAL TAX OFFICER
(ENFORCEMENT)-2
SHARADA SAMUDAYA BHAVANA
SHANKARA MATTA ROAD,
K R PURAM
HASSAN-573201
...RESPONDENTS
(BY SRI.ADITYA VIKRAM BHAT, AGA)
THIS STRP IS FILED UNDER SEC.65(1) OF THE KARNATAKA
VALUE ADDED TAX ACT, 2003 AGAINST THE JUDGMENT DATED
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STRP No. 2 of 2024
21.10.2023, PASSED IN STA.NO. 241/2019, ON THE FILE OF
KARNATAKA APPELLATE TRIBUNAL AT BANGALORE, DISMISSING
THE APPEAL AND FILED AGAINST THE ORDER DATED 24.06.2019
PASSED IN KVAT/AP-62/2016-17, (2016-17) ON THE FILE OF JOINT
COMMISSIONER OF COMMERCIAL TAXES (APPEALS) MALNADU
DIVISION, SHIMOGA, DISMISSING THE APPEAL AND FILED
AGAINST THE ENDORSEMENT ORDER DATED 8.06.2016 ON THE
FILE COMMERCIAL TAX OFFICER, (ENFORCEMENT-2), HASSAN FOR
THE TAX PERIOD FROM 2016-17.
THIS PETITION, COMING ON FOR ADMISSION, THIS DAY,
POONACHA. J., MADE THE FOLLOWING:
ORDER
Though the matter is listed for admission, by consent of
the parties the submissions on the merits of the matter have
been heard with a view to consider as to whether the above
revision petition requires to be admitted.
2. The present revision petition is filed by the
Assessee under Section 65(1) of the Karnataka Value Added
Tax Act, 20031 challenging the order dated 21.11.2023 passed
in STA No.241/2019 by the Karnataka Appellate Tribunal,
Bengaluru2.
3. The relevant facts necessary for consideration of
the present petition are that the Assessee is an individual
transport Contractor undertaking transport of goods to various
parts of the country. When the Assessee's vehicle was
Hereinafter referred to as the 'KVAT Act'
Hereinafter referred to as the 'KAT'
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transporting consignments on 2.6.2016, the same was
intercepted at Shiradi Ghat by the Commercial Tax Officer,
Enforcement 13, Mangalore3, and since there were
discrepancies in the documents tendered by the person in-
charge of the vehicle, a GC endorsement dated 2.6.2016 was
under Section 53(8) of the KVAT Act. Thereafter, the CTO
issued a notice under Section 61(3) of the KVACT Act levying a
penalty of `2,78,688/-. The notice was replied to by the
Assessee. Vide order dated 8.6.2016 the CTO confirmed the
penalty mentioned in the said notice.
4. Being aggrieved, the Assessee preferred an appeal
under Section 62(6) of the KVAT Act. The Joint Commissioner
of Commercial Taxes (Appeals), Malnad Division, Shivamogga4
by order dated 24.6.2019 dismissed the appeal and upheld the
order dated 8.6.2016 levying the penalty. Being aggrieved, the
Assessee preferred an appeal under Section 63(1) of the KVAT
Act in STA No.241/2019 before the KAT. The KAT by order
dated 21.10.2023 dismissed the appeal and upheld the order of
penalty. Being aggrieved, the present revision petition is filed
by the Assessee.
Hereinafter referred to as the 'CTO'
Hereinafter referred to as the 'Commissioner (Appeals)'
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5. Learned counsel for the Assessee vehemently
contends that a substantial question of law arises for
consideration in the present appeal, inasmuch as the levy of
penalty under Section 53(12) of the KVAT Act was required to
be considered in a situation wherein the Assessee had the
documents in accordance with Section 53(2) of the KVAT Act.
6. Per contra, learned AGA contends that no question
of law arises for consideration and the question sought to be
raised by the Assessee in the present petition is a factual one,
which has been adequately answered in the proceedings before
the CTO, Commissioner (Appeals) as well as before the KAT
and hence, the appeal is required to be dismissed at the stage
of admission itself.
7. The submissions made by both the learned counsel
have been considered and the material on record has been
perused.
8. It is relevant to note that in the transportation that
was being carried on by the Assessee, the following
discrepancies were noted:
"1) As per the tax invoices issued, the transporting
vehicle is subjected to move via Udupi, Kumuta,
Dharwad, Nippani to exit Karnataka State (NH 63 &
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NH 4), to reach the destinations, whereas the Goods
vehicle was moving towards Sakaleshapura.
2) None of the above GC Notes issued by the
transporter contains vehicle number.
3) In the APMC permits generated by the dealers, the
vehicle numbers mentioned were 0000. It is clearly
evident that the registration number of the vehicle
has to be mentioned. There was no hurry for the
consignor to put 0000 just for the sake of generation
of APMC permit for transportation of notified
Agriculture Produce. There was no compulsion of time
or any other reason for him to generate APMC
permits, which can be generated online 24*7, When
the government has given such a facility, the forms
as and when required may be generated, the
question of entering 0000 does not arise.
4) Drivers of the goods vehicle have stated that 245
bags of Arecanut were loaded at Puttur on the
evening of 01/06/2016 and they were instructed
to unload the goods at Hospet. It is clear that the
Goods vehicle was moving towards Hospet via.
Sakaleshapura.
5) Further, the transaction details were uploaded by
the dealers to generate e-SUGAM and also APMC
permits within a gap of 10 minutes. The question of
Vehicle number not known by the dealers does not
arise. Because the destination of transport is above
1600km.
6) Confirmation details of both the parties not
furnished."
9. The CTO considering the objections raised by the
Assessee has held as follows:
"One more reason to suspect the genuineness of the
consignor and the transporter M/s. Ocean Cargo,
Mangalore is that if the goods were loaded in the vehicle
as contemplated by the consignor, the transporter should
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have mentioned the lorry number in his goods
consignment notes, while transporting the goods from
Puttur. It appears that both consignor and transporter
have clearly avoided mentioning the vehicle number on
the tax invoice and on the goods consignment note. All
these acts are done with the intention of recycling the
documents for number of unaccounted transactions
thereby causing huge revenue loss to the government.
The Transporter in order to evade the taxes in
transporting 245 bags of Arecanut from Puttur to Hospet
via Sakleshapura by carrying documents which do not
related to the present transportation."
(emphasis supplied)
10. Hence, the CTO by the said order dated 8.6.2016
confirmed the penalty of `2,78,688/-.
11. The Commissioner (Appeals) while considering the
appeal of the Assessee has recorded the following findings:
"8. The argument put-forth by the appellant and the
decisions quoted are perused with the facts and
circumstances of the case. It is observed that the
Enforcement authority has taken the statement from
the person in-charge of the goods vehicle at the time
of interception of goods vehicle. As stated by the
drivers of the vehicle bearing No.MP-09/KD-8155,
total 245 bags of arecanut were loaded at Ocean
Cargo Office, Opposite to Railway Station, Puttur on
01/06/2016 at about 5pm to 9pm and the Manager
goods of the transporter M/s. Ocean Cargo has
directed them to unload the above goods at Hospet.
The goods were intercepted between Gundya and
Sakaleshpur. As per the invoices the destination was
Baddi, Himachal Pradesh and the vehicle suppose
the take ordinary route via Udupi, Kumuta, Dharwad,
Nippani. Whereas the goods vehicle was intercepted
between Gundya and Sakaleshpur; which is not the
ordinary route to reach destination. Further none of
the GC's and e-SUGAM reflect the vehicle No. Vehicle
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number mentioned in the e-SUGAM forms were
handwritten. None of the documents, bill of sale or
the goods consignment note reflects transporter
name. The appellant has contended that the entry of
vehicle number is not mandatory. But in the present
case, non-mentioning of the vehicle number/
transporter name in the documents is one of the
evidence to suspect the transaction.
10. The invoice of the goods carried in the vehicle
clearly gives the name of the consigner and
consignee, which is from Mangalore /Bantwal to
Choghala, Diu and Delhi. Therefore, the said
document is a valid for carrying the goods to the way
Diu and Delhi. At the time of its interception at
Shiradighat there was no valid document as required
under law authorizing transporter to transport the
goods to Shiradighat. Because it is not the ordinary
route to reach the Diu and Delhi. The vehicle had
travelled beyond the ordinary route without valid
documents. Thus there was a intention to evade tax.
In this matter the decisions quoted by the appellant
have no application to the facts of this case.
11. Moreover the drivers of the goods vehicle Sri
Krishna and Sri Adam have categorically stated that
245 bags of arecanut were loaded at Ocean Cargo
Office, Opposite to Railway Station, Puttur on
01/06/2016 at about 5.00 pm to 9.00 pm. and they
were asked to transport and unload the goods at
Hospet. In that view of the matter, the respondent
was justified in imposing the penalty for
contravention of carrying the goods at Shiradighat
without valid documents. The documents tendered at
the time of interception of goods vehicle pertain to
load and transport the goods from Bantwal/
Mangalore to Diu and Baddi, Himachal Pradesh and
Delhi.
12. In view of the above discussion and observation,
I make the order as under
Order
The penalty of `2,78,688/- levied u/s. 53(12) of
the KVAT Act by the respondent in his order dated
08/06/2016 is upheld.
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The appeal stands dismissed."
(emphasis supplied)
12. The KAT while considering the appeal of the
Assessee has held as follows:
"24. The counsel for the appellant has stated that
goods i.e., 245 bags of Arecanut from Mangalore and
Mudipu (Bantwal) have been transported to Puttur
transporter's office in small six vehicles and stored in
that office. Thus, here there are two journeys, one
from the place of consignors to the Transporter's
office and another from Puttur Transport office to
final destination. But the counsel for the appellant has
failed to prove the actual movement of the goods
taken place from Mangalore and Mudipu (Bantwal) to
Puttur along with the documentary evidences and the
details of goods vehicles. So also in the documents
tendered at the time of interception of the goods
vehicles that there is no indication of the goods being
first taken to Puttur Transporter's office from the
places of consignors before starting movement goods
to final destinations. It is evident from the above,
that there is no bearing between the goods loaded in
Puttur office to the bills accompanied. On the other
hand it is proved by itself that goods of Puttur is
transported on the strength of documents of
Mangalore and Mudipu (Bantwal) in contravention of
the provisions of Section 53(2) which warranted levy
of penalty U/s. 53(12) of the Act and hence the PA
has rightly invoked the provisions of Section 53(12)
by levying the Rs. 2,78,688/-.
25. From the perusal of the aforesaid discussions and
submissions we understand that, markings on the tax
invoice and the gunny bags is a general practice
adopted by Arecanut traders. The marking namely
"ST" is present in the bill of sale of M/s Shauhan
Traders. We reiterate that if similar markings were to
be there at least on the gunny bags pertaining to the
same consignor it would have been easy to come to
conclusion that goods are related to that consignor
and this would have left no room for checking officer
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to doubt the appellant's transaction even while taking
a deviation route away from the destination or a
route not normally taken. The practices adopted here
namely, hand written vehicle numbers on documents
required for movement of goods, not using machine
numbered invoices, using more than six vehicles to
transport goods of two dealers for short distances
without providing documentary evidence for
transshipments, and not giving satisfactory
explanations for having taken a deviation route away
from the destination points, are such practices that
are common in Arecanut trade for recycling of
documents and to do unaccounted transactions and
evade tax to the State exchequer. Hence we find no
reason to interfere with the orders of the PA and FAA
and accordingly we answer point No.1 in the
Affirmative."
(emphasis supplied)
13. It is clear and forthcoming from the aforementioned
that the transport of arecanut was being done by the Assessee
from Puttur to Diu and Delhi and the place at which the vehicle
of the Assessee was intercepted i.e., Shiradhi Ghat was not the
ordinary route to reach the place of destination. Further, it was
also noticed that in the documents issued the vehicle number
was also not mentioned. Hence, noticing the various
discrepancies the statutory authorities have categorically
recorded a finding that there was an intention to evade tax by
the Assessee. Further, in view of the discrepancies noticed, the
Assessee was imposed with a penalty as noticed above.
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14. Section 53(2) of the KVAT Act requires the owner
in-charge of the goods vehicle to carry with him: (a) vehicle
trip sheet/a log book; (b) documents in respect of the goods
carried in the vehicle; (c) report at the first check post situated
on the route ordinarily taken from the place in the State from
which the movement of the goods commences towards the
destination; (d) report at the first and last check post situated
in the State limits.
15. In the present case, the statutory authorities have
categorically recorded a finding of fact that there has been
various irregularities in the petitioner carrying the goods as
required under Section 53(2) of the KVAT Act.
16. It is further relevant to note that under Section 65
of the KVAT Act a revision petition would lie to this Court
against the order passed by the Appellate Tribunal. However,
the said revision petition is maintainable only if question of law
arises for consideration. In the present case, the authorities
having recorded concurrent findings of fact that there has been
non compliance of the requisite provisions of the KVAT Act,
inasmuch as the petitioner was not carrying the required
documents at the time of transportation. Hence, it cannot be
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said that the Assessee has the necessary documents in terms
of Section 53(2) of the KVAT Act. It is clear that no question of
law arises for consideration in the present revision petition.
17. In view of the aforementioned, the above revision
petition is dismissed as being devoid of merit at the stage of
admission itself.
No costs.
Sd/-
JUDGE
Sd/-
JUDGE
nd
