JUDGMENT Rajesh Kumar, J.
1. The present revision under Section 11 of the U. P Trade Tax Act, 1948 (hereinafter referred to as, "the Act") is directed against the order of the Tribunal dated August 18, 2005, by which, the Tribunal has allowed the appeal of the opposite party and directed the Check-post Officer to issue transit pass.
2. The brief facts of the case are as follows:
On July 30, 2005 driver of Vehicle No. U.P.-22/3937 applied for transit pass in respect of 225 bags of old mix scrap consisting of 54 bags brass scrap, 100 bags armature scrap, 3 bags radiator scrap, 39 bags mozak scrap, 29 bags steel M. S. scrap at Tinsukhiya check-post. The transit pass was applied for movement of goods through State of U. P. to Delhi. At the time of applying the transit pass, a bill/challan of M/s. Shiva Enterprises, Belsar Nalawadi, Assam, was filed which was issued in favour of M/s. Pawan Metal Trading Company, 9662, Sadar Bazar, Delhi for 225 bags of scrap. The seizure record shows that a copy of form XXIII as provided under Rule 43(7)(j) of the Assam General Sales Tax Rules, 1993, copy of bill/challan No. 27 of M/s. Shiva Enterprises, Belsar Nalawadi, Assam, photocopy of registration certificate under the Assam General Sales Tax Rules, 1993, builty No. 88, dated July 25, 2005 were filed. The Check-post Officer, appears to have made verification of the goods before issuing transit pass. No difference in the quantity of bags and weights of the scrap was found. However, it is alleged that in the stock, 32 bags of aluminium scrap were found which have not been disclosed and apart from 32 bags of aluminium scrap, 54 bags brass scrap, 100 bags armature scrap, 3 bags radiator scrap, 7 bags mozak scrap, 29 bags steel M. S. scrap were found. On the allegation that 32 bags of aluminium scrap have not been declared, a show cause notice was issued on August 5, 2005. It is stated that one show cause notice was also issued on July 30, 2005 on the ground that in the sale bill of M/s. Shiva Enterprises, Belsar Nalawadi, Assam, bill number has been mentioned by hand and it appears that the bill and builty have been prepared in one handwriting and registration number of purchaser was not mentioned. On these facts, it is alleged that the seller was non-genuine. It is also observed that the aluminium scrap was found which was not covered by the documents. Opposite party filed reply before the Check-post Officer along with the photostat copy of registration certificate under the Central Sales Tax (Registration and Turnover) Rules, 1957 in the name of M/s. Shiva Enterprises, Belsar, Nalawadi, Assam and registration certificate issued under the Assam General Sales Tax Rules. Registration certificate of M/s. Pawan Metal Trading Company, Sadar Bazar, Delhi issued both under the Delhi Sales Tax Rules and under the Central Sales Tax (Registration and Turnover) Rules, 1957 were also filed. In reply, it is, stated that there was no difference in the quantity of scrap. The Check-post Officer has not accepted the plea of the opposite party and passed the seizure order on August 11, 2005 asking the opposite party to deposit a sum of Rs. 7,00,056 towards security in cash and a sum of Rs. 71,390 towards trade tax. The opposite party filed an application under the proviso to Section 13A(6) before the Deputy Commissioner, Check-post, Sahayta Kendra, Timkuhi Raj, Kushi Nagar, which has been rejected vide order dated August 12, 2005. Thereafter, opposite party filed an appeal before the Tribunal which has been allowed.
3. Heard Sri U.K. Pandey, learned Standing Counsel and Sri Alok Kumar, learned Counsel appearing on behalf of the opposite party.
4. Learned Standing Counsel submitted that 32 bags of aluminium has not been declared while on physical verification, it was found. He further submitted that the bill of selling dealer is doubtful, inasmuch as, bill number was written by hand, therefore, seizure of goods and demand of security was justified and the Tribunal has erred in allowing the appeal and directing the Check-post Officer to issue form 34. Sri Alok Kumar, learned Counsel appearing on behalf of opposite party relied upon the order of Tribunal.
5. Section 28B of the Act and Rule 87 read as follows:
Section 28B. Transit of goods by road through the State and issue of authorisation for transit of goods.--en 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 28A passes through the State, the driver or other person-in- charge of such vehicle shall obtain in the prescribed manner an authorisation 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-in-charge of the last check-post or barrier before his exit from the State, failing which it shall be presumed that the goods carried thereby have been sold within the State by the owner or person-in-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-in-charge 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 purpose of this section, be deemed to be the owner of the vehicle.
Rule 87. The transit of goods by road through the State.--(1) The driver or person-in-charge of a vehicle coming from any place outside the State and bound for any other place outside the State shall present the trip sheet in triplicate to the officer-in-charge of the check-post or barrier, if any, established near the point of entry into the State hereinafter referred to as entry check-post.
(2) The officer-in-charge of the entry check-post shall after examining the document and after making such enquiries as he deems necessary specify on all the copies of the trip sheet the check-post or the barrier (hereinafter referred to as the exit check-post) of the State to be crossed by the vehicle or vessel and the time and date up to which it should be so crossed and deliver two copies of the trip sheet to the driver or person-in-charge of the vehicle retaining one copy himself.
(3) The driver or person-in-charge of the vehicle or vessel shall stop his vehicle at such exit check-post, surrender one copy of the trip sheet and allow the officer-in-charge of the check-post to inspect the documents, consignments and goods in order to ensure that the consignments being taken out of the State are the same as mentioned in the trip sheet. The officer-in-charge of the exit check-post shall issue a receipt on the other copy of the trip sheet surrendered by such driver or person-in-charge of the vehicle.
(4) The officer-in-charge of the exit check-post shall have the power to detain, unload and search the contents of the vehicle for the purpose mentioned in Sub-rule (3).
6. Section 28B of the Act is a machinery section to check the evasion of tax. It is not a charging section. Every person has a right to move freely and to carry goods throughout the territory of India as guaranteed by Articles 19 and 301 of the Constitution of India. The State Legislature is competent to make the law for levy of tax on purchases and sales of any goods other than newspaper under entry 54 of List II of the Seventh Schedule to the Constitution of India and as an incidental and ancillary power can also enact machinery provisions to check the evasion of tax. If any person wants to carry the goods from one place to another place through the State of U.P., in order to ensure that such goods have not been sold inside the State of U.P., the provisions of Section 28B have been introduced. The validity of Section 28B of the Act has been challenged before the honourable Supreme Court in the case of Sodhi Transport Co. v. State of U.P. reported in [1986] 62 STC 381; [1986] UPTC 721 on the ground that, (i) the provisions were outside the scope of entry 54 of List II of the Seventh Schedule; (ii) they infringed freedom of trade, commerce and intercourse guaranteed under Article 301 of the Constitution of India; and (iii) imposed unreasonable restrictions on the freedom of trade guaranteed under Article 19(1)(g) of the Constitution of India. The honourable Supreme Court has upheld the validity of the provision. The apex court held as follows (at pages 387, 390 and 391 of STC):
Para 8. "Now the impugned provisions are just machinery provisions. They do not levy any charge by themselves. They are enacted to ensure that there is no evasion of tax. As already observed, the Act is traceable to entry 54 in List II of the Seventh Schedule to the Constitution which reads thus: '54. Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92A of List I'. It is well-settled that when the Legislature has the power to make a law with respect to any subject it has all the ancillary and incidental powers to make the law effective.
Para 9. The provisions of Section 28B of the Act and Rule 87 of the Rules which are impugned in these cases as mentioned above are just machinery provisions. They impose no charge on the subject. They are enacted to ensure that a person who has brought the goods inside the State and who has made a declaration that the goods are brought into the State for the purpose of carrying them outside the State should actually take them outside the State. If he hands over the transit pass while taking the goods outside the State, then there would be no liability at all. It is only when he does not deliver the transit pass at the exit check-post as undertaken by him, the question of raising a presumption against him would arise. We shall revert to the question of presumption again at a later stage, but it is sufficient to say here that these provisions are enacted to make the law workable and to prevent evasion. Such provisions fall within the ambit and scope of the power to levy the tax itself....
Para 14. A presumption is not in itself evidence but only makes a prima facie case for party in whose favour it exists. It is a rule concerning evidence. It indicates the person on whom the burden of proof lies. When presumption is conclusive, it obviates the production of any other evidence to dislodge the conclusion to be drawn on proof of certain facts. But when it is rebuttable it only points out the party on whom lies the duty of going forward with evidence on the fact presumed, and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed the purpose of presumption is over. Then the evidence will determine the true nature of the fact to be established. The rules of presumption are deduced from enlightened human knowledge and experience and are drawn from the connection, relation and coincidence of facts and circumstances....
Para 16. In our opinion a statutory provision which creates a rebuttable presumption as regards the proof of a set of circumstances which would make a transaction liable to tax with the object of preventing evasion of the tax cannot be considered as conferring on the authority concerned the power to levy a tax which the Legislature cannot otherwise levy. A rebuttable presumption which is clearly a rule of evidence has the effect of shifting the burden of proof and it is hard to see how it is unconstitutional when the person concerned has the opportunity to displace the presumption by leading evidence.
7. The provision to issue transit pass at the entry check-post and to surrender at the exit check-post is to ensure that the goods, which entered inside the State of U.P. had gone outside the State of U.P. and has not been sold inside the State of U.P. The power to seize the goods is only available at the exit check-post when it is found that the transporter is trying to import different goods. Under the aforesaid provisions there is no power to seize the goods at the entry check-post. At the entry check-post if driver of the vehicle applied for transit pass, authority has to verify the goods loaded in the vehicle and mention the name and quantity of the goods sought to be transported through the State of U.P. in the transit pass so that at the entry check-post, the same may be verified at the time of surrendering the transit pass.
8. I have perused the order of Tribunal and the authorities below and also records of the case. I do not find any error in the order of the Tribunal. The present case is a patent case of arbitrary seizure on the part of the Check-post Officer, which had been illegally confirmed by the Deputy Commissioner, Check-post, Trade Tax, Kushi Nagar. Admittedly, Bill No. 27, dated July 25, 2005 was for 225 bags of scrap and transit pass was also sought for 225 bags of scrap. On physical verification, no difference in the number of bags and quantity of goods was found. The basis of seizure, i.e., on physical verification 32 bags of aluminium scrap was found which was not declared is absolutely incorrect and false. These 32 bags of aluminium scrap was included in 225 bags and was covered by the bill and for which transit pass was sought. The difference was only in mentioning the nature of scrap. It was mentioned as mozak scrap in the bill while according to the Check-post Officer, it was aluminium scrap and therefore, it cannot be said to be a case of non-declaration of any goods. The allegation that the bill number was mentioned by hand and it appears that the bill and builty numbers were written in one handwriting, is wholly baseless. The Tribunal held that this allegation has been made without getting the opinion of a handwriting expert, inasmuch as, this objection is wholly irrelevant when the opposite party furnished the registration certificates and established that both the seller and purchaser were registered dealers under the Central Sales Tax Act and registered under the respective State Acts. Section 28B is a machinery provision, which has been enacted to check the evasion of the tax and to ensure that the goods coming from outside the State and moving through the State of U.P. must go outside the State. Under Section 28B presumption of sale of goods inside the State of U.P. can only be drawn in case the transit pass is not surrendered at the exit check-post. Section 28B fixes the liability of tax on the owner of the vehicle or vehicle-in-charge. Therefore, it is not much relevant whether the seller and purchaser are registered dealers. Movement of goods can be made by unregistered dealers also. For the purpose of Section 28B of the Act whether consigner or consignee is registered or not, is not relevant. Reliance is placed on the decision of this court in the case of Madhya Bharat Transport Carrier, Gwalior v. Commissioner of Trade Tax reported in [2006] 143 STC 493 : [2003] UPTC 1218. In view of the facts and circumstances of the case stated above, in my view, the seizure of the goods and denial to issue transit pass is arbitrary and illegal and has caused harassment and pecuniary loss. Therefore, the Check-post Officer is liable for exemplary costs which is assessed to Rs. 10,000 (rupees ten thousand only). It is also open to the opposite party to claim the damages before the appropriate forum for the loss suffered due to illegal seizure, in accordance with law.
9. In the result, revision fails, and is, accordingly, dismissed. The exemplary cost which is assessed to Rs. 10,000 (rupees ten thousand) is only payable by the Check-post Officer who has seized the goods, to the opposite party, which is directed to be paid within fifteen days. The Check-post Officer is directed to issue transit pass forthwith in accordance with the direction given by the Tribunal.