# Transport Co. & another Etc v. State of

- **Citation:** (2005) 1 ILRA 1
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2004-11-01
- **Case number:** Trade Tax Revision No. 41 (Defective) of 2004
- **Bench:** Rajes Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/transport-co-another-etc-v-state-of-40297
- **Pages:** 4

## Headnote

U.P. Trade Tax Act-S. 28-B and S. 15-A
(1)
(9)-Under
S.
28-B
there
is
a
rebuttable presumption in case of non
surrender of Transit pass, that goods
have been sold inside State of U.P.-No
evidence adduced to prove that goods
have not been inside State of U.P.-Thus
presumption of sale of goods inside U.P.
can not be held, stand rebutted-Burden
has on party taking form 34 and not on
revenue- in present case transit form
was not surrendered-Hence under S. 28
B, it has been rightly presumed that
goods have been sold inside State of U.P.
absence of any evidence to contraryAdmittedly, vehicle belongs to applicant
and driver was employee of applicantTherefore,
for
act
of
driver,
held,
applicant liable to Tax-However, penalty
reduced from Rs.60,000/- to Rs.10,000/-
various liability.
Held: Para 5 & 6
Under section 28-B of the Act, in case of
non-surrender
of
transit
pass,
the
presumption is that the goods have been
sold inside the State of U.P. Hon'ble
Supreme Court in the case of M/s Sodhi
Transport Co. & another Etc. Vs. State of
U.P. and another, reported in 1986 UPTC,
721 held that such presumption is
rebuttable, which can be rebutted by
adducing the evidence by the person,
who has obtained the transit pass. In the
present case, no evidence has been
adduced to prove that the goods have
not been sold inside the State of U.P.
and, therefore, the presumption of sale
inside the State of U.P. can not be held,
stand
rebutted.
To
rebut
the
presumption, burden lies upon the party,
who has taken Form-34 and not on the
revenue. In the present case it was
found that the transit pass has not been
surrendered, therefore, under section
28-B of the Act, it has been rightly
presumed that the goods have been sold
inside the State of U.P in the absence of
any evidence to the contrary. Argument
of learned counsel for the applicant that
the misappropriation of the goods was
made by his driver and not by him and
no liability of tax can be created against
the applicant can not be accepted.
Admittedly,
vehicle
belongs
to
the
applicant
and
the
driver
was
an
employee
of
the
applicant
and,
therefore, for the act of the driver, the
applicant is liable to tax. Therefore, the
tax has been rightly assessed against the
applicant.

So far as revision no.42 (Defective) of
2004
with
regard
to
penalty
is
concerned, in my opinion, on the facts
and circumstances, the levy of penalty at
Rs.60,000/- is excessive. The facts of the
case prima-facie does not establishes the
involvement
of
the
applicant
in
misappropriation of the goods but at the
same time the applicant can not be
absolved from his responsibility for the
act done by its employee. On the facts
and circumstances, a sum of Rs.10,000/-
towards penalty would be reasonable.
Case law discussed:
1986 UPTC 721 (SC)

## Text

http://www.allahabadhighcourt.nic.in
1All] Bikaner Assam Roadlines India Ltd. Ghaziabad V. Commissioner, Trade Tax, Lucknow 1
REVISIONAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 01.11.2004

BEFORE
THE HON'BLE RAJES KUMAR, J.

Trade Tax Revision No. 41 (Defective) of 2004
And
Trade Tax Revision No. 42 (Defective) of 2004

Bikaner Assam Roadlines India Ltd,
Ghaziabad.

...Applicant
Versus
Commissioner, Trade Tax, U.P. Lucknow.

...Opposite-party
Counsel for the Applicant:
Sri Kunwar Saksena

Counsel for the Respondent:
S.C.

U.P. Trade Tax Act-S. 28-B and S. 15-A
(1)
(9)-Under
S.
28-B
there
is
a
rebuttable presumption in case of non
surrender of Transit pass, that goods
have been sold inside State of U.P.-No
evidence adduced to prove that goods
have not been inside State of U.P.-Thus
presumption of sale of goods inside U.P.
can not be held, stand rebutted-Burden
has on party taking form 34 and not on
revenue- in present case transit form
was not surrendered-Hence under S. 28
B, it has been rightly presumed that
goods have been sold inside State of U.P.
absence of any evidence to contraryAdmittedly, vehicle belongs to applicant
and driver was employee of applicantTherefore,
for
act
of
driver,
held,
applicant liable to Tax-However, penalty
reduced from Rs.60,000/- to Rs.10,000/-
various liability.
Held: Para 5 & 6
Under section 28-B of the Act, in case of
non-surrender
of
transit
pass,
the
presumption is that the goods have been
sold inside the State of U.P. Hon'ble
Supreme Court in the case of M/s Sodhi
Transport Co. & another Etc. Vs. State of
U.P. and another, reported in 1986 UPTC,
721 held that such presumption is
rebuttable, which can be rebutted by
adducing the evidence by the person,
who has obtained the transit pass. In the
present case, no evidence has been
adduced to prove that the goods have
not been sold inside the State of U.P.
and, therefore, the presumption of sale
inside the State of U.P. can not be held,
stand
rebutted.
To
rebut
the
presumption, burden lies upon the party,
who has taken Form-34 and not on the
revenue. In the present case it was
found that the transit pass has not been
surrendered, therefore, under section
28-B of the Act, it has been rightly
presumed that the goods have been sold
inside the State of U.P in the absence of
any evidence to the contrary. Argument
of learned counsel for the applicant that
the misappropriation of the goods was
made by his driver and not by him and
no liability of tax can be created against
the applicant can not be accepted.
Admittedly,
vehicle
belongs
to
the
applicant
and
the
driver
was
an
employee
of
the
applicant
and,
therefore, for the act of the driver, the
applicant is liable to tax. Therefore, the
tax has been rightly assessed against the
applicant.

So far as revision no.42 (Defective) of
2004
with
regard
to
penalty
is
concerned, in my opinion, on the facts
and circumstances, the levy of penalty at
Rs.60,000/- is excessive. The facts of the
case prima-facie does not establishes the
involvement
of
the
applicant
in
misappropriation of the goods but at the
same time the applicant can not be
absolved from his responsibility for the
act done by its employee. On the facts
and circumstances, a sum of Rs.10,000/-
towards penalty would be reasonable.
Case law discussed:
1986 UPTC 721 (SC)

(Delivered by Hon'ble Rajes Kumar, J.)

1. These two revisions under section
11 of the U.P. Trade Tax Act (hereinafter
http://www.allahabadhighcourt.nic.in
 INDIAN LAW REPORTS ALLAHABAD SERIES [2005
2
referred to as the "Act") are directed
against the order of the Tribunal dated
20th September, 2003 both relating to the
assessment year, 1988-89.

Revision no.41 (defective) of 2004
relates to assessment proceeding and
revision no. 42 (defective) of 2004 relates
to penalty proceeding under section 15-A
(1) (q) of the Act.

2. Brief facts of the case are that the
applicant is a transporter. Vehicle No.DL1G/2664 belongs to the applicant. It is
alleged that the vehicle was driven by the
driver, Sri Kamlesh Yadav, son of
Chennai Ram Yadav, who was the
employee of the applicant. In the vehicle
222 cartoons of parchun goods valuing
Rs.3,67,982/- , which were meant for
transport from Delhi to Gauhati. The
driver of the vehicle obtained transit pass
no.2095 dated 21.04.1998 at the entry
T.P. Nagar check post in respect of 222
cartons of parchun goods, which was to
be surrendered at Tankuhiraj, district
Deoria by 30.04.1998 under section 28-B
of the Act. The case of the applicant is
that when the goods could not reach
Gauhati by 26.04.1998 and the applicant
had a doubt about the misappropriation of
the goods by the driver of the vehicle on
26.04.1998, a first information report was
lodged
with
the
Station
Officer
Sahibabad, district Ghaziabad. The said
F.I.R. was lodged against the driver of the
vehicle, Sri Kamlesh Yadav, son of Sri
Chennai Ram Yadav, resident of village
and post Chatai Kala, Tehsil Shahganj,
district Jaunpur and his assistant Hardeo
Singh, son of Arvind Kumar. Said F.I.R.
was registered by the police under section
406 I.P.C. Application and F.I.R are
annexed as annexure-2 to the revision.
However, on 24.04.1998 the chaukidar of
the village Kurari, district Hamirpur
found the aforesaid truck standing with
fire. He reported to the police station
Hamirpur who had sent information to the
police station Ghaziabad. Applicant also
informed to the police station Sahibabad
about the vehicle being standing at
Hamirpur. It appears that on 17.06.1998
report was given by the police that on
01.06.1998 vehicle no.DL-1G/2664 was
found in the area of police station Kurari,
district Hamirpur, in which goods relating
to the case was not found and the vehicle
was found burnt from the front side. In
pursuance of the report, charge sheet has
also been filed on 04.03.1998 under
section 406 I.P.C., which is annexure-5 to
the revision. The vehicle was insured and,
therefore, on the information being given
to the Insurance Company, survey was
conducted by Sri S.K.Gupta, Surveyor
and Loss Accessor. Report of the
surveyor is annexed as annexure-3 to the
revision. A perusal of the report shows
that it only reported the loss of vehicle
and there is no reference to the goods. On
the information being received that
alleged
Form-34
No.2095
dated
21.04.1998 was not surrendered at the exit
check post. Proceeding under section 7
(4) and section 15-A (1) (q) of the Act
were initiated and after consideration of
the reply of the applicant, a sum of
RS.54,375/- was imposed towards tax
vide order under section 7(4) a sum of
Rs.2,00,000/- had been imposed under
section 15-A (1) (q) of the Act towards
penalty. Applicant filed two appeals
before the Deputy Commissioner, Trade
Tax, Ghaziabd. First appellate authority
allowed both the appeals in part and
reduced the amount of tax to Rs.43,500/-
and amount of penalty to Rs.60,000/-
Being aggrieved by the order of first
appellate authority, applicant as well as
http://www.allahabadhighcourt.nic.in
1All] Bikaner Assam Roadlines India Ltd. Ghaziabad V. Commissioner, Trade Tax, Lucknow 3
Commissioner of Trade Tax filed appeals
before
the
Trade
Tax
Tribunal,
Ghaziabad,
who
vide
order
dated
20.09.2003 rejected all the four appeals.

3. Heard learned counsel fro the
parties.

Learned Counsel for the applicant
submitted that the facts and circumstances
shows
that
the
goods
were
misappropriated by the driver of the
vehicle and no case had been made by the
revenue that there was any involvement of
the applicant in disposing of the goods
and, therefore, for the criminal act of the
driver, the applicant should not be
subjected to liability of tax under the Act
and should also not be subjected to
penalty.
Learned
Standing
Counsel
submitted that admittedly, the vehicle
belongs to the applicant and the driver of
the vehicle was the employee of the
applicant and, therefore, for the act of the
driver, the applicant is liable to tax. He
submitted that the order of Tribunal both
in respect of the assessment and the
penalty is liable to be upheld. Learned
Counsel for the applicant submitted that
there is no finding that the goods have
been sold inside the State of U.P.

4. I have perused the order of the
Tribunal and the authorities below.
Section 28-B of the Act reads as follows:

"Transit of goods by road through
the State and issue of [authorization for
transit of goods]----- When a vehicle
coming from any place outside the State
and bound for any other place outside
the State, and carrying goods referred to
in sub-section (1) of Section 28-A, passes
through the State, the driver or other
person-in-charge of such vehicle shall
obtain in the prescribed manner an
[authorization for transit of goods] from
the officer-in-charge of the First Check
Post or barrier after his entry into the
State and deliver it to the officer-incharge of the Last Check Post or barrier
before his exit from the state, falling
which it shall be presumed that the
goods carried thereby have been sold
within the State by the owner or personin-charge of the vehicle:

Provided that where the goods
carried by such vehicle are, after their
entry into the State, transported outside
the State by any other vehicle or
conveyance, the onus of proving that
goods have actually moved out of the
State shall be on the owner or person-incharge of the vehicle.
Explanation: In a case where a vehicle
owned by a person, is hired for
transportation of goods by some other
person, the hirer of the vehicle shall for
the purposes of this section, be deemed to
be the owner of the vehicle."

Section 15-A (1) (q) of the Act reads
as follows:

"Penalties in certain cases- (1) If
the Assessing Authority is satisfied that
any dealer or other person-- (q) fails to
obtained [authorization for transit of
goods] or to deliver the same, as provided
in section 28-B or:"

5. A perusal of the order of the first
appellate authority and the Tribunal
shows that the fact stated by the applicant
that the goods have been misappropriated
by the driver in respect of which, F.I.R.
was lodged and the vehicle was found at
district Hamirpur in a burnt stage and
have not been disputed. Perusal of the
surveyor report and the police report
shows that when the vehicle was found in
http://www.allahabadhighcourt.nic.in
 INDIAN LAW REPORTS ALLAHABAD SERIES [2005
4
burnt stage, the goods were not found. No
one has reported that the goods were
burnt. Even it is not the case of the
applicant that the goods were burnt
alongwith the vehicle. I do not agree with
the submission of the learned counsel for
the applicant that in absence of any
positive evidence that the goods have
been sold inside the State of U.P. and in
the absence of any evidence that in the
mis-appropriation of goods, there was
involvement of the applicant, liability of
tax can not be fastened on the applicant.
Under section 28-B of the Act, in case of
non-surrender
of
transit
pass,
the
presumption is that the goods have been
sold inside the State of U.P. Hon'ble
Supreme Court in the case of M/s Sodhi
Transport Co. & another Etc. Vs. State of
U.P. and another, reported in 1986 UPTC,
721 held that such presumption is
rebuttable, which can be rebutted by
adducing the evidence by the person, who
has obtained the transit pass. In the
present case, no evidence has been
adduced to prove that the goods have not
been sold inside the State of U.P. and,
therefore, the presumption of sale inside
the State of U.P. can not be held, stand
rebutted. To rebut the presumption,
burden lies upon the party, who has taken
Form-34 and not on the revenue. In the
present case it was found that the transit
pass has not been surrendered, therefore,
under section 28-B of the Act, it has been
rightly presumed that the goods have been
sold inside the State of U.P in the absence
of any evidence to the contrary. Argument
of learned counsel for the applicant that
the misappropriation of the goods was
made by his driver and not by him and no
liability of tax can be created against the
applicant
can
not
be
accepted.
Admittedly,
vehicle
belongs
to
the
applicant and the driver was an employee
of the applicant and, therefore, for the act
of the driver, the applicant is liable to tax.
Therefore, the tax has been rightly
assessed against the applicant.

For the reasons stated above, I
upheld the order of the Tribunal so far as
it relates to the assessment.

Revision No. 41 (Defective) of 2004
is accordingly, dismissed.

6. So far as revision no.42
(Defective) of 2004 with regard to penalty
is concerned, in my opinion, on the facts
and circumstances, the levy of penalty at
Rs.60,000/- is excessive. The facts of the
case prima-facie does not establishes the
involvement
of
the
applicant
in
misappropriation of the goods but at the
same time the applicant can not be
absolved from his responsibility for the
act done by its employee. On the facts and
circumstances, a sum of Rs.10,000/-
towards penalty would be reasonable.

7. In the result, revision no. 41
(Defective) of 2004 is dismissed and
revision no.42 (Defective) of 2004 is
allowed in part and order of the Tribunal
is modified to the extent reducing the
amount of penalty from Rs.60,000/- to
Rs.10,000/-.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 05.11.2004

BEFORE
THE HON'BLE VIKRAM NATH, J.

Civil Misc. Writ Petition No.6070 of 2001

Shyam Singh

...Petitioner
Versus
Allahabad Bank & another...Respondents