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TMI Blog2016 (5) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Tribunal has erred in law and in facts in holding that notice to transporter is not sufficient notice to the owner and thereby quashing the order? (3) Whether the Hon'ble Tribunal has erred in law and in facts in holding that no tax and penalty can be levied as no tax incidence arose in the State of Gujarat?" 3. For the purpose of appreciating the controversy in the present case, it would be germane to cull out the facts from the record of the case. The facts are that the respondent dealer had purchased goods, namely, granite from M/s. Jee Granites and Marble Tiles of Telangana State under invoice dated 23.6.2014 against 'C' Form under the Central Sales Tax Act, 1956 (hereinafter referred to as the "CST Act"). The goods were transported in the respective vehicles of the transporter, namely, M/s. Five Star Lorry Transport. It is the case of the appellant that the driver of the truck did not stop the truck at the Songadh Check-post, however, approximately, seven kilometres from the check-post, the truck was intercepted by the Anti Corruption Bureau and brought back to the checkpost. The Commercial Tax Officer at Songadh Check-post, thereafter issued memos No.240 to 243 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods were not intended to be sold within the State of Gujarat. It was pointed out that the legislature has specifically introduced section 69 of the Act and rule 52 of the rules for cases of "goods in transit" and that since the respondent has failed to obtain a transit pass and has also failed to produce a confirmed sale order outside the State of Gujarat, the stand of the respondent that the goods were in transit and were not destined to be delivered/consumed in the State of Gujarat is not acceptable. It was submitted that since the respondent had failed to establish that the goods were transit goods, the incidence of tax falls in Gujarat. 4.1 Referring to the provisions of section 68 of the GVAT Act, it was contended that the liability under sub-section (5) thereof is appropriately placed on the owner, as unlike section 69, section 68(5) of the GVAT Act specifically includes the owner. It was, accordingly, urged that the Tribunal has erred in holding that the liability cannot be imposed on the owner and it can be imposed only on the transporter. It was urged that even otherwise the transporter is an agent of the owner and hence, any tax imposed on the transporter, is ultimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd (3) have not been satisfied, the officer-in-charge of the Check Post has formed the opinion that - (1) The vehicle had not stopped at the checkpost, and despite the fact that the goods were being transported to Rajasthan, a transit pass had not been obtained. Hence, for the purpose of further scrutiny thereof. As indicated vide the order at reference (2), the truck together with the goods has been seized under subsection (4) and the order has been served upon the driver/person in-charge of the goods and the possession of the goods has been taken over on 2.7.2014 at 03:50 hours at the check-post. In this regard, no representation has been received from the driver of the vehicle/owner of the goods/ transporter/ purchaser of the goods. The dealer has passed the vehicle without stopping it at the check-post and without producing the bill-bilty at the check-post and has also not obtained the Transit Pass in terms of section 69(1). It is compulsory to produce the bill bilty etc. documents in respect of the goods which are transported and the legal obligation to produce them before the incharge of the check-post in their correct form at the time of transport is cast upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he officer-in-charge of the check-post or barrier is of the opinion that the eventualities mentioned thereunder are not satisfied, he may, after recording the reasons, seize the goods and detain the vehicle and give receipt thereof to the person from whose possession or control the goods are seized. Sub-section (5) provides for imposition of penalty in addition to tax payable under the Act after giving an opportunity of being heard to the owner, driver or person-incharge of the goods. Thus, section 68 of the GVAT Act provides for action to be taken at the time when a truck passes through the check-post or barrier set up under sub-section (1) of section 68. It is at that stage that the officer-in-charge of the check-post or barrier would call upon the driver to produce the documents which he is required to keep with him and in case of any defect in the same, he is empowered to seize the goods and detain the vehicle and thereafter, to levy penalty in addition to tax payable, after affording an opportunity of hearing to the owner, driver or the person in-charge of the vehicle. 9. Adverting to the facts of the present case, it is an admitted position that the truck had not stopped at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng action thereunder. However, curiously, the concerned authorities have adopted a novel course of action, inasmuch as, trucks which had already crossed the check post without obtaining transit passes, had been intercepted by the Anti Corruption Bureau and brought back to the check post, whereafter powers under section 68(4) of the GVAT Act came to be exercised on account of breach of the provisions of section 69 of that Act. In the opinion of this court, having regard to the scope and ambit of section 68 and section 69 of the GVAT Act, it would not be possible to exercise powers under both the sections simultaneously in case where the check-post is the first check-post after entry into the State, for the reason that if the truck is intercepted at such check-post, the same can be detained and the goods can be seized under section 68(4) of the Act, but ultimately, it is at that check-post that a transit pass is required to be issued and hence, it follows as a necessary corollary that there cannot be a breach of section 69 at the stage where the truck is stopped at the first check-post after its entry into the State. Besides, for breach of the provisions of section 69 of the GVAT Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of non-receipt of such goods. Therefore, with a view to ensure that his business is not prejudicially affected, a dealer succumbs to pressure and pays the tax and penalty demanded by the authorities under the GVAT Act despite there being no liability on his part to pay the amounts demanded. In the opinion of this court, the action taken by the authorities under the GVAT Act of seizing the goods and detaining the vehicles for breach of the provisions of section 69 of the GVAT Act in the manner described hereinabove, which is not backed by any statutory power is required to be deprecated in the strictest terms. At this stage it may be appropriate to sound a note of caution to the authorities under the GVAT Act that the indemnity granted to them under section 90 thereof is limited to anything that is done in good faith or intended to be done under the Act or the rules and not actions taken contrary to and in excess of the jurisdiction vested in them and which on the face of it are not done in good faith. Some day the concerned officers may have to face an action for damages or any other claim from the person who has to suffer the consequences of their illegal acts. 13. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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