The opposite party, Punchkanya Road Carriers, Ghaziabad is a transporter. It has a godown in the transhipment area on the U.P-Delhi border which is a free zone and has been declared to be a "no men's land".
It is said and is not disputed that the opposite party receives, various consignments of goods from different places out side U.P. for carrying them through U.P. to different destinations out side U.P. It is on collection/booking of sufficient goods of a particular category that they are transported together by a vehicle (truck) from a particular place out side U.P., and are brought to the godown situate in the transhipment area on U.P. Delhi border for further transportation to the respective destinations by different vehicles.
It is in furtherance of such type of operation that 20 bags of "bari elaichi" from Siliguri to Kallol, (Gujrat), 25 bags from Sikkim to Navi Mumbai and 20 bags from Nepal to Jammu, total 65 bags under different tax invoices/bills, bilti were lying in the godown of the opposite party situate in the aforesaid transhipment area after being brought from outside U.P. for further transportation to places outside U.P.
These 65 bags of "bari elaichi" were seized by the revenue authorities from the said godown of the opposite party vide seizure order dated 2.3.2012 passed under Section 52 of the U.P. Value Added Tax Act (hereinafter referred to as "Act") primarily on the ground that even though necessary documents i.e. tax invoice, bilti etc. in respect of the above goods including transit declaration Forms were available but goods were retained in the State of U.P., beyond the period of exit from the State mentioned in the declaration Forms.
The representation of the opposite party under Section 48 (7) of the Act was rejected by the Joint Commissioner, SIB on 17.3.2012 but in appeal to the tribunal the seizure was held to be bad and the seized goods were allowed to be released without any security vide order dated 28.3.2012.
Thus, the revenue has preferred this revision under Section 58 of the Act against the order of the tribunal referred to above contending that the seized goods were not liable to be released without any security when the opposite party has contravened the provisions of Section 52 of the Act.
The transit declaration Forms accompanying the seized goods mentions the date of entry of goods in the State of U.P. as 23.11.2011, 28.1.2012 and 29.1. 2012 and that of exit 27.11.2011, 2.2. 2012 and 2.2. 2012 respectively. The declaration Forms further provided that the goods would enter the State of U.P., through Tamkhuai Raj in District Kushinagar and would exit from Mohan Nagar, Ghaziabad after passing from Gorakhpur, Lucknow and Bareilly.
The entry of goods in U.P. and their arrival by the route disclosed to the godown at the exit point as per the declaration contained in the Transit Declaration Form is not in question.
The only question which arises for consideration in the present revision is that whether the revenue was justified in seizing the goods from the godown of the opposite party situate on the "no men's land" on the pretext that the goods have not actually gone out of the State of U.P. within the time of exit mentioned in the transit declaration Forms.
I have heard Shri B.K. Pandey, learned counsel for the department and Shri Suyash Agrawal, learned counsel for the opposite party.
Section 48 read with Rule 55 of the Rules framed under the Act authorizes the seizure of goods by the authorised officer which are found in the dealer's place of business, vehicle, vessel or any other building or place provided he has reason to believe that such goods are not accounted for in his books etc; or are not accompanied by any tax invoice or sale invoice or any other document pertaining to value of goods; or the goods have been under valued to the extent more than 50% of the value of goods prevalent at the relevant time in the local market with intention to evade payment of tax; or are not traceable to any bonafide dealer; or documents in respect of consignment are not false, bogus incorrect, incomplete or invalid.
Apart from the above, no other ground for seizure of goods in transit through U.P., has been provided under the Act other than for seizing goods to be imported into the State by road, rail, air, post, river or rope-way as contemplated by Section 50 and 51 read with Rule 54 of the Rules.
Section 52 of the Act provides that when a vehicle coming from out side the State of U.P. and going to any place outside the State carrying goods as specified in Section 50(1) passes through the State of U.P., it shall be accompanied by such documents as may be prescribed failing which it will be presumed that the goods carried are meant for sale within the State of U.P. by owner and person-in-charge of the Vehicle.
Rule 58 of the Rules provide that such a vehicle while coming from outside the State of U.P. and bound for a destination outside the U.P. while passing through the State of U.P. shall carry such documents and follow such procedures as may be prescribed by general or special order issued by the Commissioner from time to time. It further provides that in case such documents are not available with the goods, the presumption would be that the goods are meant for sale within the State of U.P.
The documents which have been prescribed by the Commissioner from time to time are contained in the circular notification dated 30-31 July, 2009. It provides that apart from the bill and bilti relating to the goods, the owner or person incharge of the vehicle while entering the State of U.P. shall obtain/down load a Transit Declaration Form from the official website of the department and shall mention therein the entry point and the exit point from the State of U.P. It shall also disclose the two other important points through which the vehicle would pass while in U.P. In other words, the route which has to be followed by the vehicle while passing through U.P. has to be disclosed. It should also contain the date of entry in the State and the possible date of exit which has to be within a period of 4 days from the date of entry.
In the case at hand there is no controversy that the goods were accompanied by the requisite documents and the transit declaration Forms. They have entered the State of U.P., as declared and after passing through the cities mentioned have also reached the godown of the opposite party situate at Mohan Nagar in District Ghaziabad ie., transhipment area within the time mentioned in the declaration Forms. The goods were seized on 2.3.2012 from the aforesaid godown on the ground that they have not been sent to the ultimate destination and have been retained in the State of U.P., giving rise to presumption under Section 52 of the Act that they are meant for sale in U.P.
The submission of Sri B.K. Pandey, learned Standing counsel is that the so called transhipment area or the "no men's land" is part of U.P. Therefore, on the date of seizure if the goods are found in the godown of the assessee situate in the said area it would mean that they have not gone out of U.P., within time mentioned in the Transit Declaration Forms.
The above argument has been countered by Sri Suyash Agrawal, learned counsel for the opposite party by contending that the transhipment area situate on the U.P-Delhi border is a special area where all transporters have their godown to facilitate the movement of goods. The general practice is that goods coming from various places are unloaded at the godown and are despatched to various pre-fixed destinations as and when found suitable by the transporters. Once the goods reaches the godown of the transporters situate in the transhipment area on the border for all practicable purposes they are deemed to have passed out from State of U.P and the same can not be seized on the ground that they are still in U.P. and have not passed out during the time stipulated.
Previously, by virtue of Section 49 of the Act, to prevent evasion of tax or other dues payable under the Act check posts and barriers were permitted to be established by the State Government at such places within the State as may be specified in the notification and check posts and barriers already established under the erstwhile Trade/Sales Tax Act were deemed to be check posts and barriers under the present Act. However, the establishment of all check posts and barriers were abolished with effect from 27.8.2009 vide U.P. Value Added Tax (Third Amendment) Act, 2009, but there is no notification or circular abolishing the creation or declaration of " no men's land" at the U.P. Delhi border at Mohan Nagar in District Ghaziabad. It thus continues irrespective of the abolition of check-posts and barriers. The existence of the "no men's land" aforesaid has been acknowledged by this Court in various decisions.
The circular dated 31st January 1987 issued from the office of the Commissioner Sales Tax, U.P. (as it was known at that time) states that for checking of the goods going out side the Sate of U.P., check-posts have been established on the border of the U.P., and one such check-post is at Mohan Nagar which is not exactly on the U.P-Delhi border but slightly inside U.P. It is essential to facilitate the transport business by creating "no men's land".
The aforesaid circular demonstrates that about 4 Kms., inside State of U.P., at Mohan Nagar on U.P-Delhi border some area has been declared to be "no men's land". It means that the said area though technically within U.P., has been permitted by the revenue authorities to be used by the transporters to facilitate their business. The check posts and barriers have been abolished with the deletion/omission of Section 49 of the Act, but there is no notification or circular nullifying the effect of declaration of "no men's land" at the border. It is pertinent to remind that any circular issued by the Commissioner of Sales Tax/Commercial Tax is binding upon its subordinate authorities. The aforesaid circular acknowledging the above area as "no men's land" still exits and has not been rescinded or revoked or stand nullified despite the abolition of check-post. Thus, the aforesaid transhipment area at the U.P-Delhi border at Mohan Nagar Ghaziabad continues to be "no men's land".
The phrase "no men's land" ex-facie relates to the land which belongs to no one, not even to the State of U.P. for the limited purpose of collection of tax under the Act.
It is well acknowledged that legislature is quite competent to create a legal fiction by providing assumption of certain facts which does not really exist. Such a legal fiction or assumption of fact may also be created by court as a basis for deciding an issue before it. Therefore, in the peculiar nature of transport business even if the goods have not technically crossed the border of the State of U.P. nonetheless if the goods have reached the godown of the opposite party situate in the area which has been declared to be "no men's land" near the U.P. Delhi border at Mohan Nagar in District Ghaziabad by way of legal fiction, it would mean that they have actually reached the border otherwise the inter-state movement of goods would be impossible and the very purpose of establishing transhipment area would become redundant.
It is not practical for any transporter to carry goods for such long distance without unloading and loading them at certain places in between for carrying them to the ultimate destination. The creation of such free zone is therefore necessary.
Thus, if the goods reaches the godown situate in the said area within the time prescribed, the authorities can not take any exception to it and seize the goods on the pretext that they have not actually passed out of U.P.
It is not the case of the revenue that the goods so seized were actually meant for sale in U.P. or any part or the whole of them were found to be sold within the State.
In view of the above, I answer the question formulated above in favour of the opposite party and against the revenue and hold that the goods which have reached the godown of the opposite party situate in the "no men's land" at the border within the time prescribed would be deemed to have reached the border for passing out from the State of U.P., and are not liable to be seized on the ground that they have over stayed within the State unless they are actually found to be so sold within the State or there is a finding that they are being removed from there for sale in U.P.
No other ground for seizure of goods is attracted.
In view of the above reasoning the tribunal has not erred in directing for the release of the seized goods without any security.
Accordingly, I find no merit in the revision and dismiss the same but without costs.
SKS 26.4.2012