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TMI Blog2012 (12) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 230 metres of pipe proceeded from Macawber Beky Pvt. Ltd., Greater Nodia (U.P.) to M/s. Jindal Steel and Power Ltd., Angul, Odisha. The said consignment was covered with all valid required documents such as invoice No. 2172 dated December 16, 2011 for Rs. 16,81,965, E. waybill bearing No. 21W-110694206, etc. While the vehicle was running towards its destination at Angul, opposite party No. 3 on December 26, 2011 intercepted and detained the said vehicle near Chandimal. On demand, the person in charge of the vehicle immediately handed over all original documents carried with him in support of the consignment, but opposite-party No. 3 without assigning any reason forcefully took the vehicle to Talasara Police Station without any notice or show-cause to the person in-charge of the vehicle. Statement of the driver of the vehicle was recorded, but the driver signed the statement on coercion and duress without knowing the contents thereof. On December 26, 2011, opposite-party No. 3 served two notices ; one under the OVAT Act and another under the OET Act. In response to the said notices, the petitioner appeared and filed a petition before opposite-party No. 3 on December 29, 2011 pray ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill and as such the levy of tax and penalty under section 74(5) of the OVAT Act is without any authority of law. The petitioner has only committed a mistake for not entering into the check gate disclosed in the way-bill. Placing reliance on the judgment of the Madhya Pradesh High Court (Indore Bench) in the case of Indore-Kolhapur Roadlines v. Assistant Commissioner of Sales Tax reported in [1994] 95 STC 141 (MP), it was argued that once it is found that goods carried in a truck are accompanied by all the documents as required under the law, initiation of proceedings for imposing penalty would not arise merely because the truck had taken a different route. Therefore, imposition of tax and penalty upon the petitioner under section 74(5) of the OVAT Act is per se illegal and without jurisdiction. Similarly, imposition of tax and penalty upon the petitioner under section 25 of the OET Act is also illegal and without jurisdiction. It was further argued that in the present case, both the consignee and consignor are registered dealers and the opposite-parties did not find any fault in the documents produced before them by the owner of the truck. There is no provision under the OVAT Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 947 the Sales Tax Officer (Vigilance) has power not only to search and seize the documents, but also entitled to assess and recover the tax. On the rival contentions of the parties, the following questions fall for consideration by this court:- (i) Whether, in the facts and circumstances of the case, opposite-party No. 4-Sales Tax Officer (Vigilance), Sambalpur, is justified in taking action under sub-section (5) of section 74 of the OVAT Act and section 25 of the OET Act and passing the orders dated December 31, 2011 under annexures 9 and 10? (ii) Whether the order dated January 16, 2012 under annexure 1 passed by opposite-party No. 2, the revisional authority, sustaining the imposition of penalty under section 74(5) of the OVAT Act and under section 25 of the OET Act is valid in law? To deal with question No. (i) as above, it is necessary to know what is contemplated under sub-section (5) of section 74 of the OVAT Act. Same is extracted below:- "74. Establishment of check-posts and inspection of goods while in transit.-(1) to (4)... (5) The officer-in-charge of the check-post or barrier or the offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 74(2)(b), (c), (d) of the OVAT Act, 2004. The petitioner was further asked to show-cause within seven days from the date of receipt of the order as to why tax and penalty under section 74(5) read with subsection (7) amounting to Rs. 4,03,674 shall not be imposed on the petitioner. Similarly, vide show-cause notice issued under section 25 of the OET Act, the petitioner was informed that the vehicle carrying scheduled goods violated the provisions of sections 23 and 24 of the OET Act, 1999 and as to why penalty of Rs. 50,460 cannot be imposed on him under the OET Act. The petitioner has filed his reply to show-cause notice with a prayer to drop the penalty proceedings initiated under section 74(5) of the OVAT Act. However, opposite-party No. 4, the Sales Tax Officer (Vigilance), Sambalpur, vide his order dated December 31, 2011 under annexure 9 imposed tax and penalty of Rs. 4,03,674 under section 74(5) of the OVAT Act on the ground of violation of the provisions of section 74(2) (b), (c), (d), (e) of the OVAT Act. Opposite-party No. 4 also imposed tax and penalty of Rs. 50,460 under section 25 of the OET Act vide his order dated December 31, 2011 under annexure 10 on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section for contravention of the provisions of section 74(2) (b), (c), (d), (e) of the OVAT Act. While the Legislature in its wisdom has provided that only in case of violation of the provisions of clause (a) of sub-section (2) of section 74 or for, submission of false or forged documents or way-bill either covering the entire goods or part of the goods carried, the prescribed authority may impose penalty as provided in sub-section (5) of section 74, it cannot be said that the prescribed authority assumes jurisdiction for contravention of any other provision (s) of section 74(2) or that the vehicle in question had avoided the check gate violating the terms of the declaration in way-bill. The intention of the Legislature is further clear when a comparison is made between sub-sections (2) and (5) of section 74. While under sub-section (2) of section 74, several obligations are cast on the driver or person-in-charge of the vehicle or carrier of goods in transit under sub-section (5) of section 74 only for violation of either of the two conditions, i.e., violation of provisions of clause (a) of sub-section (2) of section 74 or for submission of false or forged documents or way-bills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , one favourable to the citizen is to be ordinarily preferred. The High Court of Madhya Pradesh in the case of Indore-Kolhapur Roadlines [1994] 95 STC 141 (MP), held that once it is found that goods carried on a truck are accompanied by all the documents as are required under the law, no occasion for initiation of the proceedings for penalty would arise. Merely because the truck had taken a different route, this would not be a sufficient ground for taking action under section 29CC of the Madhya Pradesh General Sales Tax Act, 1958. The decisions of this court in Singhal Converter (P) Ltd. [2008] 18 VST 165 (Orissa), as well as Vinayak Agro Industry [2012] 47 VST 191 (Orissa), relied upon by the Revenue have no application to the facts of the present case. In Singhal Converter's case [2008] 18 VST 165 (Orissa), the vehicle carrying goods from outside the State of Orissa pursuant to the purchase order placed by the assessee, a registered dealer under the Orissa Sales Tax Act, 1949, was intercepted by the Sales Tax Officer (Vigilance), Sambalpur, Orissa and the goods were found to be not covered by any statutory waybill in form XXXII. The Sales Tax Officer (Vigilance) levied and coll ..... X X X X Extracts X X X X X X X X Extracts X X X X
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