2017 (2) TMI 131 - HC - VAT and Sales Tax

Presumptive taxation u/s 76(6) & 76(7) of the Assam Value Added Tax Act, 2003 - the transporter failed to rebut the legal presumption, through appropriate evidence - Held that - when a transporter brings goods inside a State, he would be treated to be a dealer for the purpose of levy of tax, when he fails to establish that the goods are transported out of the State, through the exit check gate. In such event, a presumption can be recorded that the goods were sold inside the State with the help of legal presumption. In that situation tax becomes payable by the transporter unless he rebuts the legal presumption, with cogent material - all the documents available for the gunny bags carried by the truck No.AP-16/U 6287 should be furnished to the petitioner to enable them to rebut the legal presumption drawn against them and if satisfactory proof is produced to show that the transporter had no connection with the gunny bags and the truck No.AP-16/U 6287, which entered the Churaibari Check Gate of Assam on 5.8.2005, it will not be logical to hold that the presumption is conclusive against the petitioner. In so far as the two missing trucks are concerned, if in fact, the driver or the in-charge of the vehicles were responsible for misappropriating the loaded sheet rubber, carried in the two missing trucks, to burden the transporter with tax liability in such situation will be an unwarranted exercise - on account of the misdeeds of the driver and his cronies, the transporter may be wrongly subjected to tax, whereas the target of the authority should be the persons, who are actually responsible - the Assessing Officer is at liberty to re-do the exercise in respect of the sheet rubber, carried by the two trucks. Petition allowed.

Summary

Issues Involved:
1. Presumptive tax liability under Section 76(6) & 76(7) of the Assam Value Added Tax Act, 2003.
2. Challenge to the assessment order dated 18.3.2010.
3. Rebuttable presumption of tax evasion for trucks not producing endorsed Transit Permits (TPs) at the exit check post.
4. Liability of the transporter for missing trucks and stolen goods.
5. Connection of the transporter with the truck bearing Regn. No.AP-16/U 6287.

Issue-wise Detailed Analysis:

1. Presumptive Tax Liability under Section 76(6) & 76(7) of the VAT Act:
The case concerns the presumptive tax liability imposed on the transporter due to the failure to discharge the rebuttable presumption that goods entering Assam were transported out without being unloaded, as mandated by Section 76(6) & 76(7) of the VAT Act. The transporter failed to produce endorsed T.P.s at the exit check post, leading to the presumption of tax evasion.

2. Challenge to the Assessment Order dated 18.3.2010:
The petitioner challenged the assessment order dated 18.3.2010, which levied tax, interest, and penalty for goods carried by five trucks. The transporter paid the tax for two trucks but contested the levy for the remaining three trucks. The assessment was initially made on 31.12.2007 for 13 trucks, which was set aside by the Commissioner of Taxes, directing a re-assessment.

3. Rebuttable Presumption of Tax Evasion for Trucks Not Producing Endorsed T.P.s:
The transporter contended that they had collected certificates of crossing the exit check gate for eight trucks, thus no presumption of tax evasion should arise for these vehicles. For the remaining five trucks, they argued that one truck was not operated by them, and two trucks were stolen, for which an FIR was lodged.

4. Liability of the Transporter for Missing Trucks and Stolen Goods:
The transporter argued that the two trucks carrying sheet rubber went missing, and an FIR was lodged. The trial for the missing goods and trucks was ongoing, and the transporter should not be held liable for tax until the conclusion of the trial. The court acknowledged that the tax liability could be drawn against the driver or the person in charge of the goods vehicle, not necessarily the transporter.

5. Connection of the Transporter with the Truck Bearing Regn. No.AP-16/U 6287:
The transporter distanced themselves from the truck carrying gunny bags, claiming no connection with it. The court noted that if the transporter's name was in the T.P. at the entry check gate, they should be given an opportunity to rebut the presumption. The court emphasized that the transporter should be provided with all documents related to the truck to facilitate a fair opportunity to rebut the presumption.

Conclusion:
The court set aside the assessment order dated 18.3.2010 and the judgment of the Revenue Board dated 28.4.2014, concerning the gunny bags and sheet rubber carried by the specified trucks. The Assessing Officer was directed to re-assess the case for the sheet rubber subject to the outcome of the ongoing trial. The transporter was to be provided with necessary documents to rebut the presumption for the gunny bags. The transporter was also made responsible for keeping the Assessing Officer informed about the trial's progress. The revision petition was allowed, with each party bearing their respective costs.