# S/S Fakir Chand Hazari Lal Revisionist v. Commissioner Trade Tax, U.P., Lucknow

- **Citation:** (2020) 2 ILRA 1428
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-01-18
- **Bench:** Alok Mathur
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/s-s-fakir-chand-hazari-lal-revisionist-v-commissioner-trade-tax-u-p-lucknow-45500
- **Pages:** 5

## Headnote

C.S.C.

A.
Trade/Sales Tax
-
Certificate
of
registration - absence of items in the
certificate of registration could not be
imported under Form C - goods imported
bonafidely need to be demonstrated else
penalty is leviable under Section 10A read
with Section 10(b) of the Central Sales
Tax Act
The revisionist had full knowledge about the
fate of his applications for addition of branch as
well as items. He had commenced his business
at the new branch which was added in the
amended certificate of registration. Despite the
fact that his application for addition of items
was not allowed, he continued to import the
aid goods under Form-C and therefore from the
above facts it cannot be deciphered that the
revisionist has acted in bonafide manner in
importing the said goods. (Para 20)

Revision Rejected. (E-10)

List of case cited:-

Commissioner of Sales Tax, U.P. V. M/s Sajiv
Fabrics, 2010 NTN (Vol. 44) 69 (distinguished)

## Text

1428 INDIAN LAW REPORTS ALLAHABAD SERIES
himself in the light of Circular dated
03.02.2009 and should have allowed the
vehicle to proceed alongwith the goods. It
is undisputed that the goods transported
were the same which were mentioned in
the various documents (bill/builty/challan
etc.) carried by the driver of the vehicle.

21. The judgment passed by this Court
in the case of I.C.I. India Limited (supra) has
clearly spelt out the law in this regard and a
circular issued by the Revenue clearly
indicates that the Officer managing the check
post after verifying the goods on the basis of
other documents available at that point of
time and have filled up the blank column of
Form 38 and there was no occasion for
imposing penalty, as has been done by the
Assessing Officer.

22. In the light of above, this Court
finds no merit in the contention raised by
learned Standing Counsel appearing on behalf
of the revenue. The revision lacks merit and is
accordingly dismissed.

23. The impugned order dated
25.02.2013, passed by the Tribunal is hereby
affirmed.

24. The question of law is answered in
favour of assessee and against the revenue.
----------
(2020)02ILR A1428

REVISIONAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 18.01.2020

BEFORE
THE HON'BLE ALOK MATHUR, J.

Sales/Trade Tax Revision No. 1031 of 2006 Connected
with Sales/Trade Tax Revision No.1032 of 2006

S/S Fakir Chand Hazari Lal ...Revisionist
Versus
Commissioner Trade Tax, U.P., Lucknow
 ...Opposite Party

Counsel for the Revisionist:
Sri Kunwar Saksena, Murari Mohan Rai, Sri
Nitin Kesarwani

Counsel for the Opposite Party:
C.S.C.

A.
Trade/Sales Tax
-
Certificate
of
registration - absence of items in the
certificate of registration could not be
imported under Form C - goods imported
bonafidely need to be demonstrated else
penalty is leviable under Section 10A read
with Section 10(b) of the Central Sales
Tax Act
The revisionist had full knowledge about the
fate of his applications for addition of branch as
well as items. He had commenced his business
at the new branch which was added in the
amended certificate of registration. Despite the
fact that his application for addition of items
was not allowed, he continued to import the
aid goods under Form-C and therefore from the
above facts it cannot be deciphered that the
revisionist has acted in bonafide manner in
importing the said goods. (Para 20)

Revision Rejected. (E-10)

List of case cited:-

Commissioner of Sales Tax, U.P. V. M/s Sajiv
Fabrics, 2010 NTN (Vol. 44) 69 (distinguished)
(Delivered by Hon'ble Alok Mathur, J.)

1. Heard Sri Murari Mohan Rai,
learned counsel for the revisionist as well
as Sri Bipin Kumar Pandey, learned
Standing Counsel appearing on behalf of
respondent.

2. By means of aforesaid revisions
challenge has been made to common
judgment and order dated 24th July, 2006,
2 All. S/S Fakir Chand Hazari Lal Vs. Commissioner Trade Tax, U.P., Lucknow
1429
passed by the Trade Tax Tribunal in
Second Appeal No. 43 of 2006 and Second
Appeal No. 44 of 2006, whereby the
appeals preferred by the revisionist were
rejected.
These
revisions
relate
to
assessment years 2001-02 and 2002-03.

3. The facts of the case in brief are
that assessee/revisionist is a firm engaged
in the business of buying and selling
"Vanaspati, other edible oils, sugar etc.".
The revisionist firm is registered under
Section 8-A of U.P. Trade Tax Act as well
as under Section 7 of the Central Sales Tax
Act. The revisionist established a Cold
Storage under the name and style of
Shreenathji Cold Storage, Wazirganj,
Budaun as a branch of the head office at
Allahabad and accordingly moved an
application for the amendment of the
registration certificates under the U.P.
Trade Tax Act as well as under the Central
Sales Tax Act.

4. The assessing authority by order
dated
09.01.2002,
amended
the
registration certificate in Form-15, issued
under the U.P. Trade Tax Act as also
registration Certificate in Form-B issued
under the Central Sales Tax Act showing
the business of the revisionist at Budaun as
a
Branch
Office,
but
no
addition/amendment with regard to the
items required to be imported by the
revisionist was made in the registration
certificate and for the that purpose
revisionist moved another application for
addition of items in Form-C, before the
Assessing Authority.

5. In the meanwhile, the revisionist
started importing machinery and parts.
During
the
course
of
assessment
proceedings for the year 2001-02, it came
to be notice of the Assessing Officer that
the items imported by the assesseerevisionist, did not find mention in the
registration certificate and therefore issued
a show cause notice to the revisionist
stating that he had imported machinery
and parts amounting to Rs.9,26,236/-, in
respect of which permission not having
been granted, and held that the revisionist
had imported the items in question
unauthorizedly and illegally.

6. In response to the show-causenotice, the revisionist filed a detailed reply
stating that his application for addition of
machines and parts thereof was still
pending and in any case the same had not
been rejected by the Assessing Authority
and nor any communication in this regard
was made to the revisionist, thus, the
applicant was under the bonafide belief
that the applicant was authorized to import
the goods in question against Form-C, and
therefore no violation of any provision has
been made by him for which he can be
penalized under Section 10-A of the
Central Sales Tax Act.

7. The Assessing Authority however
did not accepted the explanation of the
revisionist and imposed penalty in exercise
of powers under Section 10-A of the
Central Sales Tax Act, holding that the
revisionist had imported machines and
parts thereof on Form-C without having
been duly authorized in this regard and
imposed
penalty
to
the
tune
of
Rs.1,30,000.00 under Section 10-A of the
Central Sales Tax Act by order dated
22.02.2005.

8. Aggrieved by the aforesaid order
of
penalty,
the
revisionist
preferred
appeals before the Joint Commissioner
(Appeals), Trade Tax, Allahabad, which
were dismissed vide judgment and order
1430 INDIAN LAW REPORTS ALLAHABAD SERIES
dated 28.01.2006, mainly on the ground
that in the certificate of registration only
branch has been added and not the items.
Against the order passed by the first
appellate
authority,
the
revisionist
preferred Second Appeals before the Trade
Tax Tribunal, Allahabad, which has also
been dismissed by means of impugned
judgment and order dated 24.07.2006.
Hence present revisions.

9. Following substantial questions of
law have been framed in these revisions
for consideration :

(i) Whether on the facts and in
the circumstances of the case, the
applicant was liable for penalty U/s 10-A
read with Section 10(b) of the Central
Sales Tax Act?

(ii) Whether on the facts and in
the circumstances of the case, the quantum
of penalty fixed by the authorities below
was excessive and arbitrary?

10.

Learned
counsel
for
the
revisionist has submitted that he has made
an application for addition of items in the
certificate
of
registration,
but
the
competent authority had only added the
Branch, while the application regarding
addition of items remained pending. He
further submitted that he had issued formC and only thereupon imported the goods
and considering the aforesaid facts it can
safely presumed that the revisionist was
acting bonafidely and he had no intention
to evade tax and therefore the orders
passed by the Assessing Authority, the
first Appellate Authority as well as
Tribunal were arbitrary and have not
considered the case of the revisionist in
proper perspective and therefore the
penalty imposed upon him is liable to be
set aside.

11. Learned Standing Counsel
appearing on behalf of Revenue on the
other hand has submitted that under the
scheme of the Central Sales Tax Act it is
mandatory that certificate of registration
should assign list of items which are
purported to be dealt by the assessee. He
further submitted that the application in
this regard was preferred by the revisionist
but no orders in this regard have been
passed in favour of the revisionist and
therefore in absence of the addition of
items in the registration certificate the
revisionist could not have imported the
goods on Form-C which are not included
in the certificate of registration. He further
submits that the penalty imposed upon the
revisionist was just and proper and that
there is clear violation of statutory
provisions under the scheme of the Act.

12. Heard learned counsel for the
parties and perused the record.

13. The admitted facts of this case
are that the revisionist had moved an
application for adding of Branch of his
firm and also for addition of items. The
competent authority had only added the
Branch but no order was passed with
regard to addition of the items. It is true
that Form-C was issued in respect to the
items to be imported, which did not find
mention in the certificate of registration
and the revisionist is claiming that the said
goods were imported under the bona-fide
belief that the goods have been included in
the amended certificate of registration.

14. It is also uncontroverted that
application regarding addition of items
was not allowed nor were the items
entered on the certificate of registration.
Without
addition
of
items
in
the
registration certificate, it is not permissible
2 All. S/S Fakir Chand Hazari Lal Vs. Commissioner Trade Tax, U.P., Lucknow
1431
for the revisionist to import the goods and
in case such goods which are not included
in the certificate of registration are
imported, same would amount to penalty
under the provisions of the Central Sales
Tax Act.

15.

Learned
counsel
for
the
revisionist has relied upon the Apex
Court's
judgment
in
the
case
of
Commissioner of Sales Tax, U.P. Vs.
M/s Sanjiv Fabrics, 2010 NTN (Vol. 44)
69, to canvass his submissions. In
paragraph 22 of the said judgment, the
Court has held as under :

"22. In view of the above, we are
of the considered opinion that the use of
the expression "falsely represents" is
indicative of the fact that the offence under
Section 10(b) of the Act comes into
existence only where a dealer acts
deliberately in defiance of law or is guilty
of contumacious or dishonest conduct.
Therefore, in proceedings for levy of
penalty under Section 10-A of the Act,
burden would be on the revenue to prove
the existence of circumstances constituting
the said offence. Furthermore, it is
evidenct from the heading of Section 10-A
of the Act that for breach of any provision
of the Act, constituting an offence under
Section 10 of the Act, ordinary remedy is
prosecution which may entail a sentence of
imprisonment and the penalty under
Section 1-0A of the Act is only in lieu of
prosecution. In light of the language
employed in the Section and the nature of
penalty contemplated therein, we find it
difficult to hld that all types of omissions
or commissions in the use of Form ''C' will
be embraced in the expression "false
representation". In our opinion, therefore,
a finding of mens rea is a condition
precedent for levying penalty under
Section 10(b) read with Section 10-A of
the Act.

23. That takes us to the next
question viz. Whether on the facts of the
two cases before us it could be said that
the dealers had purchased the goods in
question and furnished Form ''C' in
respect of those goods knowing that the
said goods were not covered by their
certificates of registration and, therefore,
the requirement of the mens rea was
satisfied.

24. As regards, the first set of
appeals, as afore-stated, the High
Court has deleted the penalty on the
ground that apart from the fact that on
earlier occasions the department had
not raised any objection while issuing
Form ''C' to the dealer, the dealer filed
an application for amendment of the
registration certificate as soon as he
learnt about his fault. It is evident from
the impugned judgment that the High
Court had lost sight of the fact tha the
dealer had used Form ''C' to import
items like sutli, tat etc., in addition to
the cotton waste. Assuming that the
dealer was of the bona fide belief that
cotton included the cotton waste, it is
hard to believe that there was some
confusion in the mind of the dealer in
so far as other items were concerned.

Similarly, in the second set of
appeals,
it
is
evident
from
the
impugned judgment that the High
Court
has
not
examined
the
explanation furnished by the dealer
that they were under a bona fide belief
that they were authorized to purchase
oil seeds against Form ''C' issued to
them regularly by the department
without any objection. It is manifest
that the High Court proceeded to
examine the case of the dealer on the
premise that offence under Section
1432 INDIAN LAW REPORTS ALLAHABAD SERIES
10(b) of the Act was an absolute
offence."

16. Perusal of the aforesaid judgment
clearly indicates that the assessee therein
was able to demonstrate before the Court
that he had imported the goods bonafidely
and did not file any false returns, his
intentions were further demonstrated by
the fact that on coming to know that the
items are not included in the registration
certificate, he had immediately moved an
application
for
amendment
of
the
registration certificate to include the items.

17. In the instant case, the assessee
despite
coming
to
know
that
the
goods/items have not been included in the
list, he did not moved any application for
disposal of pending application or moved a
fresh application for including the goods in
the certificate of registration.

18. The bonafides of the revisionist
are also not made out in the instant case,
inasmuch as, the certificate of registration
after due amendment would have been
returned to him alongwith endorsement of
the authority concerned. On the strength of
the aforesaid certificate of registration, the
revisionist continued his business of
importing
the
goods,
therefore,
the
revisionist cannot plead ignorance of the
certificate of registration wherein the list
of goods is also mentioned.

19. The revisionist in the present
case was fully aware of the amendments
incorporated
in
his
certificate
of
registration and from the list of items
appended therein, he should have been
aware of the fact that his application for
addition of goods had not been allowed
and this the items had not been included in
the list of goods he intends to import on
Form - C.

20. In the light of the above, the
judgment of the Hon'ble Apex Court in the
case of M/s Sanjiv Fabrics (supra) is
distinguishable on facts. In the instant
case, the revisionist had full knowledge
about the fate of his applications for
addition of branch as well as items. He had
commenced his business at the new branch
which
was
added
in
the
amended
certificate of registration. Despite the fact
that his application for addition of items
was not allowed, he continued to import
the said goods under Form-C and therefore
from the above facts it cannot be
deciphered that the revisionist has acted in
bonafide manner in importing the said
goods.

21. In view of the discussion made
above, this Court is of the considered
opinion that there is no illegality or
infirmity in the order of the Tribunal and
therefore no interference in the same is
required.

22. The revisions are dismissed.

23. The substantial questions of law
raised in these revisions are answered in
favour of the revenue and against the
revisionist.
----------
(2020)02ILR A1432

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.01.2020

BEFORE
THE HON'BLE NEERAJ TIWARI, J.

Matters Under Article 227 No. 404 of 2020