2024 (9) TMI 764 - HC - VAT / Sales Tax

Cancellation of assessment order - whether the Notification dated 13.09.2012 can be made applicable in the case of the present revisionist, whose goods were seized way back in the year 2008-2009? - HELD THAT - As per the Notification dated 13.09.2012, the transporter during movement has to carry with him duly signed two copies of Lorry Challan/E-generated Lorry Challan , document of title to goods/GR/bilty, invoice/challan etc. The present revisionist has been registered with the Ministry of Railways, and as per the letter dated 25.05.2006, he is bound to keep the complete address of the consignors as well as the consignee. When he was issued a show-cause notice before the assessment order dated 01.09.2009, and on that date, the Notification dated 13.09.2012, was not existing. Hence, the case of the revisionist has to be examined in view of the provisions of the Act applicable on the date when the assessment order was passed on 01.09.2009. In the present case, the provisions of section 49 (3) were done away by deleting the same by Notifications dated 13.09.2012 and 17.12.2012 with effect from 01.03.2012. The law which was applicable with respect to the definition of the word dealer and whether the non production of the documents relating to the title of the goods i.e. duly signed two copies of Lorry Challan/E-generated Lorry Challan , document of title to goods/GR/bilty, invoice/challan etc., could be made basis to assess tax liability has already been considered by the Hon ble Supreme Court in various judgments. In the present case, after the Notification of 13.09.2012, and 17.12.2012, the State of Uttarakhand had established check-posts at Kashipur, Rudrapur, Haldwani, Dehradun, Haridwar and Rishikesh, and if they are non functional, then mobile squad has also been deployed. In the case of the revisionist when the goods were transported, there was no checking done on the way as the goods were being transported on the railways coach, and hence, there was no checking done during the transportation of these goods, and hence, when there no checking was done during the transportation of the goods, the revisionist being a transporter of the goods cannot be liable to pay tax, if he has not produced the evidence of the name of the consignors and consignees. The order dated 02.04.2014, passed by the Commissioner Tax Tribunal, Dehradun Bench, Dehradun is set aside, and the order passed by the JCA dated 19.06.2012, is being upheld - the present revision is being allowed.

Summary

Issues Involved:
1. Whether the revisionist/assessee is a dealer.
2. Applicability of Notification dated 13.09.2012 to the assessment year 2008-2009.
3. Requirement of maintaining and furnishing verifiable details of consignors and consignees.
4. Legal obligations of transporters under the Railway Act and relevant notifications.
5. Assessment of tax liability based on non-production of title documents during transportation.

Issue-wise Detailed Analysis:

1. Whether the revisionist/assessee is a dealer:
The Tribunal examined if the revisionist/assessee qualifies as a dealer under section 2(11) and the provisions of section 3(7)(b) and section 15(3) of the Act. The revisionist transported goods without maintaining records of consignors and consignees, leading to an assumption of tax evasion. The Tribunal concluded that the revisionist, lacking proper documentation, was rightly deemed a dealer by the Assessing Authority.

2. Applicability of Notification dated 13.09.2012 to the assessment year 2008-2009:
The judgment clarified that the Notification dated 13.09.2012, which mandates transporters to carry specific documents during goods movement, was not applicable to the assessment year 2008-2009. The revisionist's case must be evaluated based on the provisions in effect at the time of the assessment order dated 01.09.2009. Section 49(3) of the Act, which was applicable then, did not impose such obligations on railway administrations or servants.

3. Requirement of maintaining and furnishing verifiable details of consignors and consignees:
The revisionist failed to provide verifiable details of consignors and consignees, violating the Ministry of Railways' letter dated 25.05.2006 and the Notification dated 13.09.2012. Despite being registered with the Railways, the revisionist did not maintain records, leading to the initiation of assessment proceedings. The Tribunal emphasized the importance of these records for tax assessment purposes.

4. Legal obligations of transporters under the Railway Act and relevant notifications:
The Tribunal noted that the Railway Board's order dated 16.10.1985 and subsequent communications emphasized the need for accurate consignor and consignee details on forwarding notes and railway receipts. The revisionist's non-compliance with these requirements contributed to the assumption of tax evasion. The Tribunal also referenced the establishment of railway check posts and mobile squads to curb evasion.

5. Assessment of tax liability based on non-production of title documents during transportation:
The Tribunal referred to Supreme Court and High Court judgments, including "State of Haryana vs. Sant Lal" and "Prince Road Lines vs. Commissioner of Commercial Tax, U.P.," to highlight that transporters are not liable for tax if they do not engage in trading activities. The Supreme Court affirmed that clearing or forwarding agents and transporters are not liable for sales tax if they do not handle the sale of goods. The Allahabad High Court further clarified that non-production of documents during transportation does not imply tax liability once goods reach their destination.

Conclusion:
The Tribunal's decision to set aside the order dated 02.04.2014 and uphold the JCA's order dated 19.06.2012 was based on the legal principle that the revisionist, as a transporter, was not liable for tax if not engaged in trading activities. The judgment emphasized the importance of maintaining proper documentation and the limitations of applying post-incident notifications retroactively.