JUDGMENT Rajes 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 Trade Tax Tribunal, Agra, dated May 28, 2003.
2. Brief facts of the case borne out from the record are that the applicant is a transport-company and engaged in the business of transportation of goods. The applicant had booked the goods of various parties against 21 goods receipts (Gil's) for transportation from New Delhi to Akola (State of Maharashtra). The said goods were being transported in a truck No. UP-80/K-9674. At the time of entry in the State of U.P. at Kotwan Check-Post, applicant applied for transit pass in form XXXIV in respect of the goods relating to 21 GR's for transportation to Akola through State of U.P. The officer of Kotwan check-post issued form XXXIV No. 4135/5309 dated November 23, 2002. The said form was required to be surrendered at the exit check-post, Sainya by November 24, 2002. A perusal of form XXXIV, which is at page No. 23 of the revision petition, shows that in form XXXIV details of 21 GR's, number of packages, description of goods and value are mentioned. It appears that on the basis of confidential information, the Assistant Commissioner (Mobile Squad) made an inspection of the godown of M/s. Sodhi Cargo Movers, Jeevani Mandi, Agra. At the time of inspection, vehicle No. UP-80/K-9674 loaded with the goods was found standing and apart from that, two other vehicles were also standing in respect of which there is no dispute in present revision. The officer of mobile squad made the physical verification of the goods loaded in vehicle No. UP-80/K-9674. It is alleged that different goods were found other than declared in bill and builty, and the registration number of Delhi seller was not available, and the vehicle was not on the regular route, and hence show cause notice was issued. The applicant has given the reply of the show cause notice, which was not accepted and a seizure order was passed on December 25, 2002 by which the entire goods against 21 GR's were seized and after estimating the value of the goods at Rs. 16,62,548, a sum of Rs. 6,65,019 was demanded towards the security in cash. Applicant filed an application under the proviso of Section 13-A(6) of the Act before the Deputy Commissioner (Sahayata Kendra/Mobile Squad), Trade Tax, Agra, which was rejected vide order dated January 6, 2003. Applicant further filed appeal before the Trade Tax Tribunal, Agra, which was allowed in part. Tribunal has confirmed the seizure of the goods and the value of the goods estimated by the Assistant Commissioner (Mobile Squad) but has reduced the amount of security to Rs. 2,49,382. Aggrieved by the order of the Tribunal, the present revision has been preferred.
3. I have heard Sri Bharat Ji Agrawal, Senior Advocate assisted by Sri Piyush Agrawal, learned Counsel for the applicant and Sri B.K. Pandey, learned Standing Counsel.
4. Tribunal while confirming the seizure of the goods has observed that,--(i) on initial enquiry Sri Turkman Singh, Manager of M/s. Sodhi Cargo Movers told that the driver had come to take expenses. Subsequently, it was told that certain goods were released on payment and for the purposes of unloading, the vehicle was brought appears to be contradictory ; (ii) registration numbers shown in the bills were not found correct which shows that disclosed sellers are not real consignors. The inference that the consignors were forged is not unjustified ; (iii) the registration number of the purchaser and the address of the purchaser are not mentioned and hence it is doubted that they may be forged ; (iv) on physical verification different goods were found as against mentioned in the bill and builty, shows that they were not relating to transit pass.
5. The relevant provisions are referred as follows :
Section 28-B. Transit of goods by road through the State and issue of authorisation 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 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 28-B 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 business throughout the territory of India as guaranteed by Articles 19 and 301 of the Constitution of India. 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 28-B has been introduced. The validity of Section 28-B 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. Honourable Supreme Court has upheld the validity of the provision. The apex Court held as follows :
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.
The provisions of Section 28-B 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.
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.
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. Admittedly, form XXXIV No. 4135/5309 dated November 23, 2002 was issued by the Kotwan check-post for 21 GR's containing 170 packages of various description of goods and the said form XXXIV was to be surrendered by November 24, 2002 at Sainya check-post. At the time of inspection, made by the Assistant Commissioner (Mobile Squad) on November 24, 2002, the vehicle was found standing loaded with the goods. At this stage, it is pertinent to state that it is not the case of Revenue that any goods of the vehicle was found unloaded or unloading of the goods was going on. It is also not the case of the Revenue that the period for surrendering the said form XXXIV was expired. It was to expire at 12.00 P.M. on November 24, 2002. According to the opposite party distance was hardly 100-125 kms., which could be covered, within three hours. It is not the case of Revenue that vehicle could not cross exit check-post by 12.00 P.M. on November 24, 2002. I am of the view that prior to the expiry of the period for surrendering the transit pass, it is wholly irrelevant at which place where the vehicle was standing. The presumption of sale of goods inside the State of U.P., for which form XXXIV was issued can only be drawn, if it is found that form XXXIV was not surrendered within the period mentioned in form XXXIV and not prior to that.
8. On the facts of the present case as stated above, situation to raise presumption of sales of goods inside of the State of U.P. had not arisen. The time for surrender form XXXIV had not expired and inasmuch as, the vehicle was found standing loaded with the goods, the trade tax authority has a jurisdiction to apply the provisions of U.P. Trade Tax Act only in respect of those goods, which are meant for sale inside the State of U.P. In respect of those goods, which are coming from outside the State of U.P. and going through State of U.P., the trade tax authorities can assume jurisdiction to apply the provisions of the U.P. Trade Tax Act only in case, if it is found that form XXXIV, which has been obtained under rule 87 read with section 28-B of the Act has not been surrendered at the exit check-post. No proceeding can be taken under the Trade Tax Act under any provisions of the Act in respect of such goods unless such situation arises.
9. In my view, for the purpose of Section 28-B, it is wholly irrelevant that consignor or consignee are traceable or non-traceable. Under Section 28-B driver or other person-in-charge or hirer of the vehicle obtains form XXXIV and he has to surrender such form at the exit check-post. Once the goods is booked with the transporter, the transporter becomes the custodian of the goods being a bailee as per the contract between the consignor and transporter and the transporter is required to deliver the goods to the consignee as per the contract. There may be cases where the consignor or consignee are name sake and the goods actually belong to the transporter which it wants to transport for its own purpose and therefore, Legislature was conscious with this situation. The Legislature has put the responsibility on the driver or the person-in-charge or hirer of the vehicle to obtain form XXXIV and to surrender at the exit check-post. In case, if the form XXXIV is not surrendered, it is the transporter against whom the presumption is drawn as contemplated under Section 28-B of the Act and the transporter would be treated as "dealer". It is made clear that transporter may be owner of the vehicle, which includes hirer and person-in-charge and driver represents, owner of vehicle. This situation has also been considered by the honourable Supreme Court in the case of Sodhi Transport Co. case [1986] 62 STC 381 ; 1986 UPTC 721. The honourable Supreme Court observed as follows :
When once a finding is recorded that a person has sold the goods which he had brought inside the State, then he would be a dealer even according to the definition of the word 'dealer' as it stood from the very commencement of the Act subject to the other conditions prescribed in this behalf being fulfilled. A person who sells goods inside the State of Uttar Pradesh and fulfills the other conditions prescribed in that behalf is a dealer even as per amendments made in 1959, 1961, 1964, 1973 and 1978 to the said definition. There is, therefore, no substance in the contention that a transporter was being made liable for the first time after 1979 with retrospective effect to pay sales tax on a transaction which is not a sale. Tax becomes payable by him only after a finding is recorded that he has sold the goods inside the State though with the help of the presumption which is a rebuttable one.
10. Therefore, in view of above position, while issuing form XXXIV the check-post officer must be more concerned about the genuineness of the transport-company and about the ownership of the vehicle, and the genuineness of the consignor and consignee are not much relevant because on the non-surrender of form XXXIV, presumption is being drawn for the sale of goods against the transporter, who is being treated as a "dealer" and subject to payment of penalty and tax.
11. Now the question is whether on physical verification any difference in goods were found as against the goods mentioned in form XXXIV or GR and on the basis of such difference it can be inferred that the goods do not relate to form XXXIV No. 4135/5309 dated November 23, 2002. At the time of physical verification, the details of the GR number, description of the goods and the goods found on physical verification were mentioned on the papers, which have been signed by the officer concerned and by the transporter which finds place at page Nos. 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96 and 97 of the revision petition. The genuineness of such papers have not been disputed by the learned Standing Counsel. A perusal of the paper shows that no difference in packages and description of the goods were found. The difference was found in number of pieces kept inside the packages, which were opened at the time of physical verification. For example, in GR No. 7719 dated November 22, 2002 ten cartons underwear were disclosed with private marka Nos. 3808 to 3817. In the bill number of pieces disclosed was 4404. On physical verification, ten cartons underwear were found with the private marka Nos. 3807 to 3817 but consisting of 5080 pieces. In the case of GR No. 7703 dated November 22, 2002, the number of packages were six and in the bill quantity mentioned was 3900 pieces. On physical verification, six cartons were found with the same private marka but consisting 3600 pieces. Likewise in all other cases so far as the number of packages and description of the goods are concerned they were found exactly same but the difference in number of pieces were found. It is pertinent to state at this stage that in GR only number of packages are mentioned and not the pieces. In form XXXIV also number of packages are only mentioned and not the pieces. The pieces are only found mentioned in the bill. Learned counsel for the applicant contended that form XXXIV was issued with reference to the GR and only number of packages are mentioned in form XXXIV and therefore, what was required to be verified was the number of packages. He submitted that the transporter has no control on the consignor and it is wholly impossible and impracticable to open each and every package and verify the number of pieces inside the packages at the time of booking. He further submitted that verification should be made with reference to the packages, which is mentioned in form XXXIV and not with reference to number of pieces contained inside the packages and if the authority wants to verify the goods with reference to the number of pieces, such verification should also be made at the entry check-post while issuing form XXXIV and if form XXXIV was issued with reference to the packages and not with reference to the pieces, the verification should only be made with reference to the packages and not with reference to the pieces.
12. In my view, since on verification same number of packages and same description of goods were found on physical verification as mentioned in GR's and in form XXXIV, it cannot be said that the goods were not relating to form XXXIV No. 4135/5309 dated November 23, 2002. At the exit check-post, necessary verification should be made only with reference to the details of the goods mentioned in form XXXIV. The details, which are not mentioned in form XXXIV should not be considered at the exit check-post. If in form XXXIV, number of pieces are not mentioned and only number of packages are mentioned, the verification of number of packages should be made at the exit check-post and not the number of pieces. If the officer of exit check-post can verify the goods with reference to the goods mentioned in form XXXIV only, the officer of the Mobile Squad, who propose to check goods can also verify only with reference to the disclosed goods mentioned in form XXXIV and they cannot travel beyond that. In case if in respect of a particular goods or particular transaction, the officer feels that there may be possibility for opening of packages and change in number of pieces, in transit, it is always open to the officer concerned at entry check-post to take necessary care in this regard, and either put a seal or signature on the packages to overrule the possibility of it being opened, or to make the verification even of the contents of the packages and made the mention in form XXXIV itself to overrule the possibility of any presumption and to give liberty to any officer to exercise any kind of discretion.
13. In my opinion, in the present case, the whole exercise was made on suspicions and presumption and without any basis. The detention of goods and subsequently its seizure was wholly arbitrary. The authority concerned are directed to release the goods forthwith. However, while releasing the goods, they may take all precautions whatever they feel necessary to ensure that the goods may cross the State of U.P. and in case, if it is found that form XXXIV is not surrendered, presumption would be raised for its being sold and in that situation, they may catch hold the person responsible for the purpose of the assessment in accordance to the law.
14. In the result, the revision is allowed. The order Tribunal dated May 28, 2003 is set aside and the authority concerned are directed to release the seized goods forthwith without any security.