# The Commissioner, Commercial Tax, U.P., Lucknow Revisionist v. S/S Deepak Trading Co. Ghaziabad

- **Citation:** (2020) 2 ILRA 1422
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-01-10
- **Case number:** Sales/Trade Tax Revision No. 570 of 2013
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/the-commissioner-commercial-tax-u-p-lucknow-revisionist-v-s-s-deepak-trading-co-45498
- **Pages:** 7

## Headnote

A. Trade/Sales Tax - Penalty - Section
54(1)(14) - UP Value Added Tax, 2008 -
non-filling up of column 6 of Form 38 -
inference that form may be reused for
importing goods of same quantity, weight
and value to evade payment of tax
cannot be the sole ground to impose
penalty - opportunity to be given to the
assessee/dealer - reasons to be recorded
after
considering
all
the
relevant
materials/evidences on records - guilty
mind is necessary to be established

Revision Rejected. (E-10)

List of cases cited:-

## Text

1422 INDIAN LAW REPORTS ALLAHABAD SERIES
conferred under Section 22 of the Act,
1948. In the facts of the present case, I am
of the considered opinion that where an
issue
was
never
raised
before
the
Appellate Authority nor considered by it,
it cannot be subject matter for correction
of a mistake and therefore application
under Section 22 of the Act, 1948,
preferred by the revenue for correction of
mistake
in
the
order
of
Joint
Commissioner (Appeals), was clearly
misconceived.

40. Another aspect of the matter
which
has
been
considered
in
the
discussion made above is with regard to
the "doctrine of merger" as discussed in
the case of M.R. Soap (Pvt.) Ltd.
(supra). According to the Division Bench
of this Court in the aforesaid case, it is
provided as under :

"12..........That being so, the
entire
assessment
order,
whether
challenged in appeal as a whole or only in
part, will merge in the appellate order
irrespective of the points urged by the
parties or decided by the Appellate
Authority.

13. Once it is found that the
order of assessment has merged in the
appellate order, it follows as a matter of
necessary corollary that the Assessing
Authority shall not have the power to
reopen the assessment under Section 22 of
the U.P. Sales Tax Act. ......"

41. Taking into consideration the
"doctrine of merger" as per the judgment
of the Hon'ble Apex Court in the case of
Commissioner of Central Excise Vs.
Pearl Drinks Ltd. (supra), and applying
it to the facts of the present case, it
emerges that issue regarding taxability on
the lease rent as provided under Section 3F
of the Act, 1948, becomes final at the
stage of the Assessing Authority and the
same was not challenged by the revenue
before the Joint Commissioner (Appeals)
nor there was an order of reassessment and
therefore, the said issue became final and
even if the said issue did not merge with
the order of the Appellate Authority, the
same could not have been rectified by an
application under Section 22 of the Act,
1948.

42. From the perusal of the record,
the application for rectification under
Section 22 of the Act, 1948 was moved
by the revenue for rectification of the
order
of
the
Joint
Commissioner
(Appeals) but in the entire application
there was no mention of the mistake
sought to be rectified in the said order
and therefore, such an application would
not be maintainable and it would be a
colourable exercise that under the garb
of rectification of mistake of the order of
first Appellate Authority, the order of
the
Assessing
Authority
is
rectified/modified and fresh assessment
is made in this regard.

43. In the light of above, the
impugned order of the Tribunal is not
sustainable and therefore the same is set
aside.

44. The revision is allowed.
----------
(2020)02ILR A1422

REVISIONAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 10.01.2020

BEFORE
THE HON'BLE ALOK MATHUR, J.

Sales/Trade Tax Revision No. 570 of 2013
2 All. The Commissioner Commercial Tax, U.P., Lucknow Vs. S/S Deepak Trading Co. Ghaziabad
1423
The Commissioner, Commercial Tax, U.P.,
Lucknow ...Revisionist
Versus
S/S Deepak Trading Co. Ghaziabad
 ...Opposite Party

Counsel for the Revisionist:
S.C.

Counsel for the Opposite Party:
Sri Nishant Mishra

A. Trade/Sales Tax - Penalty - Section
54(1)(14) - UP Value Added Tax, 2008 -
non-filling up of column 6 of Form 38 -
inference that form may be reused for
importing goods of same quantity, weight
and value to evade payment of tax
cannot be the sole ground to impose
penalty - opportunity to be given to the
assessee/dealer - reasons to be recorded
after
considering
all
the
relevant
materials/evidences on records - guilty
mind is necessary to be established

Revision Rejected. (E-10)

List of cases cited:-

1. M/s Gulraj Industries V. Commercial Tax
Officer 2007 NTN (Vol. 35) 61 (distinguished)

2. Jain Suddh Vanaspati Ltd. V. State of U.P.
1983 UPTC 198

3. I.C.I. India Ltd. V. Commissioner of Sales Tax
(2003) 134 STC 286 (All) (followed)

4. The Commissioner, Commercial Tax, U.P. Lko
V. S/S Dabur India Ltd. 22 Site-4, Ind. Area
Sahibabad Sales/Trade Tax Revision No. 441 of
2014
(Delivered by Hon'ble Alok Mathur, J.)

1. Heard Sri Bipin Kumar Pandey,
learned Standing Counsel for the revisionist as
well as Sri Nishant Mishra, learned counsel for
the respondent.

2. By means of this revision the revenue
has assailed the order dated 25.02.2013, passed
by the Trade Tax Tribunal in the Second
Appeal No. 1183 of 2011, whereby the appeal
preferred by the respondent has been allowed
and the order passed by the first Appellate
Authority has been set aside. This revision
relates to assessment year 2009-10.

3. The revision has been admitted
by order dated 12.07.2013, on the
following question of law :

(i) Whether under the facts
and circumstances of the case, the
Commercial Tax Tribunal was legally
justified in deleting the penalty levied
under Section 54(1)(14) of U.P. Value
Added Tax Act, 2008?

4. Brief facts giving rise to the
present revision are that Vehicle No.
HR-58/5439, was intercepted by the
Mobile Squad Authority, Commercial
Tax, Unit-3, Ghaziabad on 23.10.2009
and the dealer was found importing
goods from outside the State and Form
38 had certain unfilled (blank) column,
which gave rise to the apprehension of
intention to evade tax. The Assessing
Authority issued show cause notice to
the revisionist/assessee for levying
penalty under Section 54(1)(14) of the
U.P. Value Added Tax Act, 2008
(hereinafter referred to as "the Act,
2008"). The assessee filed reply to the
show cause notice. The Assessing
Authority after considering the reply of
the assessee, rejected the explanation
and passed assessment order imposing
penalty to the tune of Rs.1,80,000/- i.e.
40% of the value of the goods in
question.
1424 INDIAN LAW REPORTS ALLAHABAD SERIES

5. The assessee/revisionist aggrieved
by the order of the Assessing Authority
filed first appeal before the first appellate
authority which was dismissed by order
dated 04.03.2011. Aggrieved by the order
passed by the first appellate authority the
assessee/revisionist
preferred
second
appeal before the Trade Tax Tribunal, and
the Tribunal by means of impugned order
allowed
the
appeal
of
the
assessee/revisionist. Hence this revision
preferred by the revenue.

6.

Learned
Standing
Counsel
appearing for the revisionist has submitted
that the order of Tribunal is bad in law as
well as on facts. The column no. 6 of
Form-38 was left blank deliberately by the
respondent with intention to use the same
again so as to evade tax. The learned
counsel for the revenue has relied upon the
judgment of the Apex Court in the case of
M/s Guljag Industries Vs. Commercial
Tax Officer, 2007 NTN (Vol. 35) 61,
wherein the Apex Court has held that if
relevant column of forms have not been
filled while importing the goods the
presumption is that there is intention to
evade payment of tax as the said forms can
be used again.

7.

Learned
counsel
for
the
respondent
on
the
other
hand
has
supported the judgment and order passed
by the Tribunal stating that there is no
error apparent in the same and no
interference from this Court is required.
The revision is devoid of merit and is
liable to to be dismissed.

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

9. The controversy involved in the
present revision is in respect to the levy of
penalty under Section 54(1)(14) of the
Act,
2008
in
contravention
of
the
provisions of Section 50 of the Act, 2008.
As per scheme of the Act, 2008 any
person, who intends to bring, import or
otherwise receive, into the State from any
place outside the State any goods other
than goods named, and described in
schedule-I in such quantity or measure or
of such value, as may be notified by the
State Government in this behalf, in
connection with business, shall either
obtain the prescribed form of declaration,
in such manner as may be prescribed, from
the assessing authority having jurisdiction
over the area, where this principal place of
business is situated or in case there is no
such place, where he ordinarily resides or
shall down load from official website of
the department in the manner as may be
prescribed under Rule 58 or 59.

10. The driver or other person
incharge of vehicle carrying goods
referred to in sub Section (1) of
Section 50 of the Act, 2008 is required
to carry the declaration form along
with other relevant documents and if
on inspection he is found to transport
or attempting or abetting to transport
any goods to which this section applies
without being covered by proper and
genuine documents then for reasons to
be
recorded
and
after
giving
opportunity of being heard he may
order for detention of such goods. The
declaration form for import may be
obtained
by
registered
dealer
for
import of goods either from his
assessing
authority
or
he
may
download it from the official website
of the department in the manner
prescribed by the Commissioner. The
aforesaid declaration form for import is
Form 38. The Form is required to be
2 All. The Commissioner Commercial Tax, U.P., Lucknow Vs. S/S Deepak Trading Co. Ghaziabad
1425
sent to the selling dealer or consignor
of the other State in two copies.

11. In Form 38 the name and address
of the dealer to whom form is to be issued,
description of goods, weight / measure,
quantity, value in figure, value in words,
bill / cash memo / Chalan / tax invoice
number and date, name and address of
seller / consignor and certain particulars of
transporters / carrier, namely, service
provider number, truck number, name and
address of driver and driving license
number are to be filled up. Column no. 1
to 6 may be filled up only with the help of
bill / cash memo / chalan / tax invoice.
Recurring instances comes to light that
column no. 6 is left blank due to which
penalty under Section 54(1)(14) of the
Act, 2008 is imposed by the assessing
authority on the ground that non filling of
this column facilitates tax evaders to evade
tax by re-using the same form 38 for
import of unaccounted goods. It is the case
of the department that when entire
informations in form XXXVIII are filled
up with the help of the relevant bill / cash
memo / chalan / tax invoice then there is
no reason not to fill up column no. 6 i.e.
bill / cash memo / chalan / tax invoice
number and date. According to the
department this clearly indicates import of
goods to evade payment of tax which
attracts penalty under Section 54(1)(14) of
the Act, 2008 unless it is shown that even
if details in column no. 6 have not been
filled up yet there was no intention to
evade payment of tax.

12. In the instant case it is admitted
fact that the respondent had duly applied
for and obtained Form 38 for import of
goods and the Column 6 of the said Form
was left blank on account of negligence of
the respondent. It is only on account of
non filling of Column 6, penalty has been
imposed upon the respondent. It has been
submitted on behalf of the respondent that
there was no intention to evade tax and the
driver of the vehicle carrying the goods
was carrying all the relevant documents
including the bill/challan/bilty etc. from
which the details of goods being carried on
the vehicle could have been verified by the
officer concerned and therefore there was
no occasion for the assessing officer to
pass penalty order, inasmuch as there was
no intention on the part of the assesee to
evade tax.

13.

Learned
counsel
for
the
assessee/respondent has also produced a
copy of Circular dated 03.02.2009, passed
by the office of the Commissioner,
Commercial Tax U.P., which has been
addressed to all the Zonal Additional
Commissioners/Additional Commissioners
Grade-II etc. wherein it has been provided
that in case vehicle importing goods is
accompanied with Form 38 and the goods
being carried tallies with the said Form 38
and also that in case any column in Form
38 remains unfilled, then the Officer
inspecting the vehicle at the Check Post is
under duty to fill up the blank Form in
accordance with the other documents
alongwith his signature and stamp and
release the goods thereafter.

14. In the case of Jain Suddh
Vanaspati Ltd. Vs. State of U.P., 1983
U.P.T.C. 198 a Division Bench of this
Court considered the similar provisions of
the U.P. Sales Tax Act, 1948 and held in
paragraphs 23, 29 as under :-

"23. The provision contained in
Section 28-A as it stands after enactment
of U.P. Act No. 33 of 1979 are materially
different. It cannot be said that there is
1426 INDIAN LAW REPORTS ALLAHABAD SERIES
any assumption underlying therein that the
goods to which the provision of Section
28-A applies have actually been sold
inside the State and the section does not
authorise the sales tax authorities either to
seize the said goods or to penalise the
importer thereof on any such assumption.
Its present basis is the attempt to evade
tax. The power to detain the goods and
levy penalty in respect thereof cannot be
exercised merely for the reason that the
said goods were not accompanied by the
requisite documents or that the documents
accompanying them were false. This
power can be exercised only if the goods
detained are not accompanied by the
requisite documents or that the documents
accompanying them are false and if there
is material before the detaining authority
to indicate that the goods are being
imported
in
an
attempt
to
evade
assessment or payment of tax due or likely
to be due under the Act. The instant case,
therefore, in our opinion, clearly falls
outside the ratio of the case of Check Post
Officer v. K. P. Abdulla & Bros. [1971] 27
STC 1 (SC) as decided by the Supreme
Court.

29. The first question that arises
for
consideration
is
whether
the
expression "attempt to evade assessment
or payment of tax due or likely to be due"
can be said to be vague and whether the
power conferred upon the Check Post
Officer in this regard can be said to be
arbitrary. In our opinion, the expression
"attempt, to evade assessment or payment
of tax due or likely to be due" cannot be
said to be an expression conveying vague
ideas. It is, in our opinion, an expression
having a definite connotation. An attempt
to evade assessment or payment of tax due
or likely to be due can take place in so
many different ways that it is not possible
for any legislature to specify all such
methods of evasion in the Act. The
expression does not become vague merely
because all the circumstances in which
such an attempt to evade assessment or
payment of tax due or likely to be due have
not been enumerated therein."

15. Learned counsel for the
respondent has placed reliance on the
judgment passed by this Court in the
case of I.C.I. India Limited Vs.
Commissioner of Sales Tax, (2003)
134 STC 286 (All), wherein in similar
circumstances the Court has held as
under :-

"13. In the present case,
dealer's
books
of
account
was
accepted.
Tribunal
recorded
the
finding to this effect. Admittedly, bill
and builty were produced at the time of
the checking at the check-post and
form XXXI had also been submitted
along with bill and builty. The purpose
of form XXXI is, to bring to the notice
of the department about the import of
the goods so that the imported goods
may not be escaped from consideration
at the time of assessment. Merely
because some off the columns of form
XXXI were not filled which was merely
a procedural defect it cannot be said
that the provisions of Section 28-A has
not
been
complied.
No
finding
whatsoever has been recorded by any
of the authority that there was any
attempt on the part of the applicant to
evade the tax. Inasmuch as goods were
not for resale and were not liable to
tax in the hands of the applicant it
cannot be said that there was any
violation of Section 28-A. In the
circumstances,
the
penalty
under
Section 15-A(1)(0) is not sustainable.

14. In the result, the revision
2 All. The Commissioner Commercial Tax, U.P., Lucknow Vs. S/S Deepak Trading Co. Ghaziabad
1427
is allowed. The order of Tribunal dated
September 3, 1990 is set aside and the
penalty under Section 15-A(1)(o) is
quashed."

16. Learned Single Judge of this
High Court in Sales/Trade Tax Revision
No. 441 of 2014 - The Commissioner,
Commercial Tax, U.P,. Lko Vs. S/S
Dabur India Ltd. 22 Site-4, Ind. Area
Sahibabad and other connected revisions
(decided on 25.09.2014), wherein similar
controversy is involved, has taken same
view in respect to unfilled Form-38.

17. Learned Standing Counsel for the
revisionist has placed reliance on the
judgment of Apex Court in the case of M/s
Guljag Industries (supra), whereby he
has invited attention of this Court towards
the observations made by the Apex Court
in para 22 of the judgment, wherein it has
been recorded as under :

"22. ...... Section 78(2) is a
mandatory provision. If the declaration
Form 18A/18C does not support the goods
in movement because it is left blank then in
that event Section 78(5) provides for
imposition of monetary penalty for noncompliance. Default or failure to comply
with Section 78(2) is the failure/default of
statutory civil obligation and proceedings
under Section 78(5) is neither criminal nor
quasi-criminal in nature. The penalty is
for statutory offence. Therefore, there is no
question of proving of intention or of mens
rea as the same is excluded from the
category of essential element for imposing
penalty. ........"

18. Perusal sub Section 6 of Section
28A itself indicates that penalty can be
imposed only after giving opportunity of
being heard that the goods were being so
transported in an attempt to evade payment
of tax due or likely to be due under the Act
and therefore mens rea becomes essential
ingredient, and therefore the facts in the
case of M/s M/s Guljag Industries
(supra) are distinguishable in respect to
the provisions of the Act, 2008 applicable
in the State of Uttar Pradesh.

19. Non-filling up of column no. 6
i.e. not mentioning of bill / cash memo /
chalan / invoice number may lead to an
inference that in case of non-checking of
goods the declaration form may be re-used
for importing goods of same quantity,
weight and value to evade payment of tax
but it cannot be the sole ground to impose
penalty under Section 54(1)(14) of the
Act, 2008. Satisfaction has to be recorded
after giving opportunity to the dealer /
person and after considering all the
relevant materials / evidences on record
that there was an intention to evade
payment of tax. The guilty mind is
necessary to be established to impose
penalty under Section 54(1)(14) of the
Act, 2008. If the last fact finding authority
i.e. the tribunal has recorded a finding of
fact that there was no intention to evade
payment of tax, same cannot be interfered
with in revision under Section 58 of the
Act, 2008 provided the finding is perverse
or it is based on consideration of irrelevant
material or non consideration of relevant
material.

20. In the present case also the
vehicle was accompanied by Form 38 and
all other documents were being carried
along with other documents and only due
to human error column would remain
unfilled. It was the duty of the Officer
managing the Check Post who after
discovering that some column of Form 38
found unfilled should have filled the same
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,