# The Commissioner, Commercial Tax, U.P. Lucknow Revisionist v. S/s Gaurav Gupta, New Delhi

- **Citation:** (2022) 4 ILRA 952
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-03-31
- **Case number:** Commercial Tax Revision No. 234 of 2016
- **Bench:** Piyush Agrawal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/the-commissioner-commercial-tax-u-p-lucknow-revisionist-v-s-s-gaurav-gupta-new-48379
- **Pages:** 6

## Headnote

A. Tax Law - VAT Act, 2013 - Section 3(8),
17 - U.P. VAT Rules, 2016 - Rules 63(4),
38(7), 38(7)(a) & 38(9) _ U.P. VAT Act,
2008 - Section 2(h)(ix) - The Railway
Container Contractor is deemed to be a
dealer and is required to get itself
registered
within
the
State
for
transporting the goods. (Para 9)

S. 2(h)(ix), VAT Act provides that the person
operating as a Railway Container Contractor
shall be deemed to be a dealer and is obliged to
provide complete details and address of the
consignor and consignee name and address,
etc. Further, as per the provision of S.17, VAT
Act, the Railway Container Contractor is
required to get itself registered under the Act,
failing which shall not operate its business
within the State. Rule 38(7), VAT Rules
prescribes for maintenance of record. Rule
38(7)(a) further provides register in respect of
all consignment and goods received by the
Railway Container Contractor for transportation
and storage is required to be maintained and
before receiving the goods, require to obtain
declaration in Form - XVIII and before delivery
is required to obtain declaration in Form - XX
from the owner of the goods. Further, Rule
38(9), VAT Rules provides to preserve all
records maintained by the Railway Container
Contractor for a period of 8 years after expiry of
the assessment order, to which they belong.
(Para 8)

B. The Tribunal, before passing the final
order, should/must have called for the
report from the Assessing Authority of
the respective dealer on the books of
account produced in support of the
claim by the respondents. The Tribunal
has failed to do so and just calling for
the record of the Department and
making certain observations cannot be
sustained in the eyes of law. (Para 11)

C. The Tribunal has shifted the burden
on the Revenue in the impugned order
and has held that the Revenue has
failed to bring on record any taxable
goods being transported through SLR
taken on lease by the respondents.
This observation of the Tribunal is
perverse and liable to be set aside.
(Para 12)

The Tribunal should have kept in mind that
the
present
proceedings
are
regular
proceedings
and
not
reassessment
proceedings for which the burden is upon
the Revenue for placing materials for
escapement of assessment. Since it is a
regular assessment for non-payment of tax
or there is not liability of tax, it is
incumbent upon the dealers to produce
such material/such record or other evidence
to support their claim. (Para 13)
4 All. The Commissioner, Commercial Tax, U.P. Lucknow Vs. S/s Gaurav Gupta, New Delhi
953
D. In the event of failure on the part
of the dealer to produce evidence,
the assessment order cannot be set
aside
by
merely
referring
the
provision
of
the
Act,
which,
otherwise, supports the claim of the
Revenue. In other words, the language
of the provision is very clear and straight.
(Para 14, 16)

The person, who is doing/operating as a
Railway
Container
Contractor
has
to
follow and abide its activity as per the
provision of the U.P. VAT Act, which was
enforced in the relevant disputed years.
Once the provisions of the VAT Act are
applicable upon the respondents to claim
any
benefit
or
non-taxable,
the
respondents are required to produce all
the documents, forms, books of account,
etc. as prescribed under the Act. (Para
15)

Revisions allowed. Remanded back to
Tribunal. (E-4)

Precedent followed:

## Text

952 INDIAN LAW REPORTS ALLAHABAD SERIES
either Assessing Authority or Appellate
Authority had accepted the contention of
the Revisionist.

(27) The Tribunal shall pass necessary
orders taking into account the observations
made hereinabove within a period of three
months from the date a certified copy of
this order is produced before it.
----------
(2022)04ILR A952
REVISIONAL JURIDICTION
CIVIL SIDE
DATED: LUCKNOW 31.03.2022

BEFORE

THE HON'BLE PIYUSH AGRAWAL, J.

Commercial Tax Revision No. 234 of 2016
with
Sales/Trade Tax Revision No. 272 of 2016
and
Sales/Trade Tax Revision No. 233 of 2016

The Commissioner, Commercial Tax, U.P.
Lucknow ...Revisionist
Versus
S/s Gaurav Gupta, New Delhi
 ...Opposite Party

Counsel for the Revisionist:
S.C.

Counsel for the Opposite Party:
Sri Naveen Chandra Gupta

A. Tax Law - VAT Act, 2013 - Section 3(8),
17 - U.P. VAT Rules, 2016 - Rules 63(4),
38(7), 38(7)(a) & 38(9) _ U.P. VAT Act,
2008 - Section 2(h)(ix) - The Railway
Container Contractor is deemed to be a
dealer and is required to get itself
registered
within
the
State
for
transporting the goods. (Para 9)

S. 2(h)(ix), VAT Act provides that the person
operating as a Railway Container Contractor
shall be deemed to be a dealer and is obliged to
provide complete details and address of the
consignor and consignee name and address,
etc. Further, as per the provision of S.17, VAT
Act, the Railway Container Contractor is
required to get itself registered under the Act,
failing which shall not operate its business
within the State. Rule 38(7), VAT Rules
prescribes for maintenance of record. Rule
38(7)(a) further provides register in respect of
all consignment and goods received by the
Railway Container Contractor for transportation
and storage is required to be maintained and
before receiving the goods, require to obtain
declaration in Form - XVIII and before delivery
is required to obtain declaration in Form - XX
from the owner of the goods. Further, Rule
38(9), VAT Rules provides to preserve all
records maintained by the Railway Container
Contractor for a period of 8 years after expiry of
the assessment order, to which they belong.
(Para 8)

B. The Tribunal, before passing the final
order, should/must have called for the
report from the Assessing Authority of
the respective dealer on the books of
account produced in support of the
claim by the respondents. The Tribunal
has failed to do so and just calling for
the record of the Department and
making certain observations cannot be
sustained in the eyes of law. (Para 11)

C. The Tribunal has shifted the burden
on the Revenue in the impugned order
and has held that the Revenue has
failed to bring on record any taxable
goods being transported through SLR
taken on lease by the respondents.
This observation of the Tribunal is
perverse and liable to be set aside.
(Para 12)

The Tribunal should have kept in mind that
the
present
proceedings
are
regular
proceedings
and
not
reassessment
proceedings for which the burden is upon
the Revenue for placing materials for
escapement of assessment. Since it is a
regular assessment for non-payment of tax
or there is not liability of tax, it is
incumbent upon the dealers to produce
such material/such record or other evidence
to support their claim. (Para 13)
4 All. The Commissioner, Commercial Tax, U.P. Lucknow Vs. S/s Gaurav Gupta, New Delhi
953
D. In the event of failure on the part
of the dealer to produce evidence,
the assessment order cannot be set
aside
by
merely
referring
the
provision
of
the
Act,
which,
otherwise, supports the claim of the
Revenue. In other words, the language
of the provision is very clear and straight.
(Para 14, 16)

The person, who is doing/operating as a
Railway
Container
Contractor
has
to
follow and abide its activity as per the
provision of the U.P. VAT Act, which was
enforced in the relevant disputed years.
Once the provisions of the VAT Act are
applicable upon the respondents to claim
any
benefit
or
non-taxable,
the
respondents are required to produce all
the documents, forms, books of account,
etc. as prescribed under the Act. (Para
15)

Revisions allowed. Remanded back to
Tribunal. (E-4)

Precedent followed:

1. Haryana & ors.Vs Sant Lal & Another, (1993)
4 SCC 380 (Para 4)

Present revisions challenge judgments
and orders dated 04.03.2016, passed by
the Commercial Tax Tribunal (Bench - I),
Ghaziabad.

(Delivered by Hon'ble Piyush Agrawal, J.)

1. Heard Shri A.C. Tripathi, learned
Standing Counsel for the revisionist and
Shri Naveen Chandra Gupta, learned
counsel for the opposite party.

2. These revisions have been filed
against the judgements & orders dated
04.03.2016 passed by the Commercial Tax
Tribunal (Bench-I), Ghaziabad in Second
Appeal Nos. 261, 259 & 260 of 2015 for
the assessment year 2010-11, in which
following common question of law has
been framed:-

"Whether on the facts & in the
circumstances of the case, Commercial Tax
Tribunal was legally justified in holding
that the opposite party is not a dealer and
not liable for payment of tax under the
provisions of the U.P. Value Added Tax
Act?"

3. Learned Standing Counsel submits
that it is admitted case between the parties
that the opposite party has taken SLR on
lease in the passenger train run by the
Northern
Railways
for
transporting/
carrying goods of other dealer(s)/person(s)
from the station of origin to the station of
destination, on which the persons, whose
goods are transported, paid the money for
such transport. In other words, the
opposite party was treated as Railway
Container Contractor. Once this fact is
admitted between the parties, the opposite
party was treated as Railway Container
Contractor,
then
the
provisions
as
provided under the Act and the Rules were
required to be fulfilled, i.e., the Railway
Container Contractors were required to get
themselves registered and follow the
procedure for maintaining books of
account, relevant forms, as prescribed
therein, were required to be filled up and
maintained, but the opposite party had, at
no stage during the assessment or at the
appellate stage, produced any document
to discharge its liability. Once the dealer
has failed to discharge its liability as
provided under the Act, the Tribunal was
not justified in accepting the version of
the dealer and allowing the appeal by
deleting heavy tax imposed upon the
opposite party. He prays for allowing the
revision.
954 INDIAN LAW REPORTS ALLAHABAD SERIES

4. Per contra, learned counsel for the
opposite party supports the orders passed
by the Tribunal and submits that there is no
iota of evidence to show that any taxable
goods were found in possession of the
dealer so that levy of tax can be justified.
At this juncture, he further refers to section
3(8) of the VAT Act providing incident of
tax to be levied on possession of taxable
goods by the opposite party. He further
submits that the primary burden has not
been
discharged
by
the
Department.
Therefore, levy of tax upon the opposite
party cannot be justified. He further
submits that as per rule 63(4) of the U.P.
VAT Rules, records were summoned. On
perusal of the records by the Tribunal, no
material was found and therefore, the
Tribunal has rightly allowed the appeal of
the dealer and discharged the liability of
tax. He further submits that the Tribunal
has rightly interpreted the provisions of the
Act and deleted the tax. In support of his
submissions, he has placed reliance on the
judgement of the Hon'ble Supreme Court in
State of Haryana & Others Vs. Sant Lal &
Another reported in (1993) 4 SCC 380
(paragraph no. 19) and prays for dismissal
of the revision.

5. Heard learned counsel for the
parties and perused the records.

6. Admittedly, all the respondents in
these revisions have taken SLR's on lease
in the Passenger Trains from Northern
Railways for transporting/carrying the
goods of the person(s) or dealer(s) from the
station of origin to the station of destination
and charged transportation charges. It is
also admitted between the parties that the
said activity of the respondents fall or can
be classifiable as a Railway Container
Contractor as described under section
2(h)(ix) of the U.P. VAT Act as "dealer", as
person, who carries on in Uttar Pradesh, a
business of distributing goods, directly or
indirectly, for cash or deferred payment or
for commission, remuneration or other
valuable consideration. Section 17 of the
VAT Act provides for registration of
dealers. Sub-section 6(a) thereof, provides
that no Railway Container Contractor shall
operate its business of taxable goods in the
State without being registered with the
registering authority in such manner as may
be prescribed.

7. Admittedly, in the normal course of
business, the respondents were transporting
goods for and on behalf of the person, who
sends its goods through SLR of the
respondents, from the station of origin to
the
station
of
destination.
Certain
provisions of the UP VAT Act as well as UP
VAT
Rules,
which
are
relevant
for
consideration of the issue involved in the
present revisions, are quoted herein-below:-

"Section 2(h): "dealer" means
any person who carries on in Uttar
Pradesh (whether regularly or otherwise)
the business of buying, selling, supplying or
distributing goods directly or indirectly, for
cash
or
deferred
payment
or
for
commission,
remuneration
or
other
valuable consideration and includes,

(ix)
a
railway
container
contractor, an air cargo operator, a courier
service provider, who fails to disclose the
name and complete address of consigner or
consignee or if discloses such name or
address of consigner or consignee is found
bogus, forged or not verifiable, or the
owner or person in-charge of a vehicle who
obtained authorization for transit of goods
from the officer in-charge of entry check
post but failed to deliver the same to the
officer in -charge of the exit check post;

17. Registration of dealers:
4 All. The Commissioner, Commercial Tax, U.P. Lucknow Vs. S/s Gaurav Gupta, New Delhi
955

(6) (a) No railway container
contractor, air cargo operator, courier
service provider, or owner or person incharge of a godown, cold storage or
warehouse other than transporter who
stores commercial goods, shall operate its
business of taxable goods in the State
without
being
registered
with
the
registering authority in such manner as
may be prescribed. Any operator of such
business shall apply within prescribed
period for his registration to the registering
authority in the prescribed manner;

Rule 38: Registration of railway
container contractor, an air cargo operator,
a courier service operator, owner or person
incharge of godown or cold storage or
warehouse other than transporter:

8(a): Where a railway container
contractor, an air cargo operator or a
courier service provider, receives any
goods from any person for carrying to any
destination, he shall require the person to
submit a declaration in Form XVII and like
wise where a railway container contractor,
an air cargo operator or a courier service
provider receives any good for delivery he
shall obtain declaration in Form XVIII
from the person to whom goods are
delivered;

Rule 38(9): Every a railway
container contractor, an air cargo operator
or a courier service provider or an owner
or person incharge of godown or cold
storage
or
warehouse
other
than
transporter or carrier shall preserve all
records maintained by him for a period of 8
years after the expiry of the assessment
year to which they belong."

8. Section 2(h)(ix) of the VAT Act
provides the and at the person operating as
a Railway Container Contractor shall be
deemed to be a dealer and is obliged to
provide complete details and address of the
consignor and consignee name and address,
etc. Further, as per the provision of section
17 of the VAT Act, the Railway Container
Contractor
is
required
to
get
itself
registered under the Act, failing which shall
not operate its business within the State.
Rule 38(7) of the VAT Rules prescribes for
maintenance of record. Rule 38(7)(a) of the
Rules further provides register in respect of
all consignment and goods received by the
Railway
Container
Contractor
for
transportation and storage is required to be
maintained and before receiving the goods,
require to obtain declaration in Form -
XVIII and before delivery is required to
obtain declaration in Form - XX from the
owner of the goods. Further, Rule 38(9) of
the VAT Rules provides to preserve all
records
maintained
by
the
Railway
Container Contractor for a period of 8 years
after expiry of the assessment order, to
which they belong.

9. From the perusal of the aforesaid
provisions, it is amply clear that the
Railway Container Contractor is deemed to
be a dealer and is required to get itself
registered within the State for transporting
the goods. Further, the provisions provide
for disclosure of various details, failing
which it should be deemed to be the dealer
and is liable to be taxed for transportation
of goods. Section 3(8)(1) of the Act is
quoted below:-

"Section 3: Incidence and levy
of tax:-

(3) 8(i) A railway container
contractor, an air cargo operator, a courier
service provider, who fails to disclose the
name and complete address of consigner or
consignee or if discloses such name or
address of consigner or consignee is found
bogus, forged or not verifiable; or the
owner or person in-charge of a vehicle who
956 INDIAN LAW REPORTS ALLAHABAD SERIES
obtained authorization for transit of goods
from the officer in-charge of entry check
post but failed to deliver the same to the
officer in-charge of the exit check post."

10. The aforesaid provision provides
for incidence and levy of tax, who fails to
disclose the name and complete address of
consigner or consignee or if discloses such
name or address of consigner or consignee
is found bogus, forged or not verifiable.

11. It is nobody's case that the goods
during the disputed period/year have not
been transported through SLR taken on
lease by the respondents. Once this fact is
admitted between the parties, the first
appellate authority has remanded the matter
to the assessing authority empowering to
provide an opportunity to the respondents
to clarify their position on facts as the
assessment order was passed ex parte. The
Tribunal, against the remand order, has just
allowed the appeal of the respondents by
just referring to the provisions of the Act.
Further, the Tribunal has observed that on
record, there is no information of transport
of goods by SLR and therefore, deleted the
levy of tax. Once a fact is admitted by the
respondents that SLR was taken on lease
for transporting the goods, as per the
provision was required to take registration
and further all the details of the person(s)
for whom the goods were transported from
the station of origin to the station of
destination were required to be maintained
by the respondents. The Tribunal ought to
have called for the records of the
respondents and should & must have
recorded a finding of fact after due
verification of the books of account. The
Tribunal, before passing the final order,
should/must have called for the report from
the Assessing Authority of the respective
dealer on the books of account produced in
support of the claim by the respondents.
The Tribunal has failed to do so and just
calling for the record of the Department
and making certain observations cannot be
sustained in the eyes of law.

12. It is not the case of the
respondents that the SLR was neither taken
on lease nor any transportation in the
disputed year has been undertaken by them.
The Tribunal has shifted the burden on the
Revenue in the impugned order and has
held that the Revenue has failed to bring on
record any taxable goods being transported
through SLR taken on lease by the
respondents. This observation of the
Tribunal is perverse and liable to be set
aside.

13. The Tribunal should have kept in
mind that the present proceedings are
regular proceedings and not reassessment
proceedings for which the burden is upon
the Revenue for placing materials for
escapement of assessment. Since it is a
regular assessment for non-payment of tax
or there is not liability of tax, it is
incumbent upon the dealers to produce
such material/such record or other evidence
to support their claim.

14. In the event of failure on the part
of the dealer to produce such evidence, the
assessment order cannot be set aside by
merely referring the provision of the Act,
which, otherwise, supports the claim of the
Revenue. In other words, the language of
the provision is very clear and straight.

15.

The
person,
who
is
doing/operating as a Railway Container
Contractor has to follow and abide its
activity as per the provision of the U.P.
VAT Act, which was enforced in the
relevant
disputed
years.
Once
the
4 All. M/S Ambuj Food Pvt. Ltd. Vs. Principal Comm. Of Income Tax & Ors.
957
provisions of the VAT Act are applicable
upon the respondents to claim any benefit
or
non-taxable,
the
respondents
are
required to produce all the documents,
forms, books of account, etc. as prescribed
under the Act.

16. In the event of failure by the
respondents, the levy of tax cannot be said
to be unjustified, but the Tribunal, in the
case in hand, has just referred to the
provisions and passed the impugned order
deleting levy of tax upon the respondents
without verifying any books of account or
material.

17. In view of the aforesaid facts &
circumstances of the case, the impugned
orders passed by the Tribunal are set aside.
The matter is remanded back to the
Tribunal to reconsider the matter afresh in
the light of the observations made above
and decide the same in accordance with
law.

18. The revisions are allowed. The
question of law is answered accordingly.

19. It is expected that since the matter
is very old, the Tribunal may take all
possible effort to decide the same within a
period of three months from the date of
receipt of a copy of this order.

20. The revisionist undertakes to
serve the copy of this order within a a
month from today. In the event of failure on
the part of the revisionist, the benefit of this
order shall not be accorded to the
revisionist.
----------
(2022)04ILR A957
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 11.04.2022

BEFORE

THE HON'BLE DEVENDRA KUMAR
UPADHYAYA, J.
THE HON'BLE SUBHASH VIDYARTHI, J.

Writ-Tax No. 48 of 2022

M/S Ambuj Food Pvt. Ltd. ...Petitioner
Versus
Principal Comm. Of Income Tax & Ors.
 ...Respondents

Counsel for the Petitioner:
Pradeep Agrawal

Counsel for the Respondents:
Manish Misra

A. Tax Law - Reassessment - Income Tax
Act, 1961 - Sections 148, 143(1), 143(2) &
142(1) - At the stage of the notice of
reopening of the assessment, the Court
has only to see whether there is prima
facie some material on the basis of which
the Department could reopen the case.
The sufficiency or correctness of the
material is not a thing to be considered at
this stage. (Para 14)

The detailed discussion made by in the
assessment order of the petitioner for the A.Y.
2012-13, it was established that the companies
listed (at sl. Nos. 3 to 5 in the chart given) are
shell companies used solely for providing
accommodation entries and during the A.Y.
2013-14,
the
petitioner
had
routed
its
undisclosed funds amounting to Rs. 95,00,000/-
through entry providers and absorbed it in its
books of accounts. It is amply evident that the
transactions shown by the petitioner (as given
in the chart) are not genuine transactions and
accommodation entries of pre-arranged share
application
money
and
share
premium
aggregating to Rs. 95,00,000/- was obtained by
the petitioner with the help of a syndicate of
operators by way of loopholes of the system in
A.Y. 2013-14. In this way, the unaccounted
money of the petitioner amounting to Rs.
95,00,000/- was routed to its books of accounts.
(Para 20)