2015 (5) TMI 1022 - HC - VAT and Sales Tax

Seeking setting aside of impugned order - Show cause notices issued are vague in most of the cases - Petitioners are transporters registered under the Tripura Value Added Tax Act, 2004 - Held that - there was a practice going on for long in Tripura that the transporters used to deal with the check post and settle the cases with the departments. In case the transporter compounds the matter then the transporter is virtually admitting that he is at fault because compounding can only be done by the person who is at fault or by his representative. However, this position was not clear till now. Therefore, one more opportunity is to be give to the transporters for the past and also because in most of the cases the show cause notices issued are very vague and do not clearly depict what are the violations made by the transporter. But in the final order reference has been made to the various violations committed by the transporter and compounded by them. Since the transporters have not denied that they have compounded these matters, it is apparent that they settled the matters. Whether these matters were settled on behalf of the dealers or not is not for this Court to decide in these proceedings. Therefore, for the future, we make it clear that if the transporter settles the matter and compounds the matter at the check post it shall be deemed that he is the offender and, therefore, he is compounding the matter unless he produces a written authorization from the dealer authorizing the transporter to compound on his behalf when the composition shall be treated to be an offence by the dealer and not by the transporter. Therefore, the impugned order is set aside. - Petitions disposed of

Summary

Issues Involved:
1. Registration and compliance requirements for transporters under the Tripura Value Added Tax Act, 2004 (T.V.A.T. Act).
2. Penalties for transporters violating the T.V.A.T. Act.
3. Duties and responsibilities of transporters regarding documentation and delivery of taxable goods.
4. Consequences of undervaluation and mis-description of goods.
5. Compounding of offences by transporters.
6. Clarification of legal provisions and their implications for transporters.

Issue-wise Detailed Analysis:

1. Registration and Compliance Requirements for Transporters:
The petitioners, who are transporters, are required to be registered under the T.V.A.T. Act. Section 22 mandates that no transporter can operate in Tripura without proper registration if they carry taxable goods. The Commissioner of Taxes has the authority to suspend or cancel this registration if the transporter contravenes the Act and Rules.

2. Penalties for Transporters Violating the T.V.A.T. Act:
Section 77 stipulates that if a transporter delivers taxable goods without obtaining a valid permit or conceals the particulars of the consignment, the Commissioner can impose a penalty up to 150% of the tax involved. The transporter must be given a reasonable opportunity to be heard before any penalty is imposed.

3. Duties and Responsibilities of Transporters:
Transporters must carry the necessary documentation, including Challan, Bills of Sale, Dispatch Memos, and the prescribed declaration form (Form-XXV and XXVI). They must ensure that these documents are accurate and match the goods being transported. Upon reaching the destination, the transporter must not deliver the goods without obtaining a duly signed Form-XXIV from the Superintendent of Taxes.

4. Consequences of Undervaluation and Mis-description of Goods:
Transporters are not liable for undervaluation or mis-description of goods as they rely on the documents provided by the consignor. However, if the description on the documents does not match the visible goods, the transporter must explain the discrepancy. If it is proven that the transporter knowingly misrepresented the goods, they could face penal proceedings.

5. Compounding of Offences by Transporters:
Section 80 allows the Commissioner to compound offences. It was noted that the transporters in these cases had compounded offences multiple times. Compounding implies an admission of fault by the transporter. The court clarified that if a transporter compounds an offence, it will be deemed that the transporter is at fault unless they produce written authorization from the dealer to compound on their behalf.

6. Clarification of Legal Provisions and Their Implications:
The court provided a detailed clarification of the duties of transporters to avoid future issues. The transporters must comply with the Act and Rules, and any violation will lead to penalties and possible cancellation of registration. The court set aside the impugned orders due to vague show cause notices but emphasized strict compliance from 1st July 2015 onwards. Any future violations will result in severe penalties and cancellation of registration after due process.

Conclusion:
The petitions were disposed of with specific directions for future compliance. Transporters must adhere to the provisions of the T.V.A.T. Act and the duties outlined by the court. The Commissioner is empowered to impose maximum penalties for violations and cancel registrations upon repeated offences.