JUDGMENT Rajes Kumar, J.
1. Present revision under Section 11 of U.P. Trade Tax Act (hereinafter preferred to as "Act"), is directed against the order of Tribunal dated 04.02.2005 by which Tribunal has confirmed the seizure of the goods and the demand of security at Rs. 1,20,000/- for the release of goods.
2. Brief facts of the case are that the goods loaded in vehicle No. UA-12/4513 reached at Maharajpur on 09.01.2005 and on the basis of the documents namely, challan No. 1312 dated 05.01.2005, builty No. 11051 dated 05.01.2005, the driver of the vehicle requested for the issue of trip sheet (hereinafter referred to as "Transit Pass") for the movement of the goods through the State of U.P. to Uttaranchal. It appears that in pursuance of the order dated 10.09.2004 given by the department of ICDS, Uttaranchal, Dehradun, 599 bags Cereal Based Blanded Food were despatched from the factory situated at Industrial Area Gudli, Udaipur (Rajasthan) to director, ICDS, Uttaranchal, Government of Uttaranchal. At the time of seeking Transit Pass, Form-32, which is declaration of import prescribed by the Uttaranchal Government under the Trade Tax Act was also produced. However, Transit Pass was denied and the goods were detained and show cause notice was issued on the ground that for the issuance of Transit Pass, G.R. No. 11051 dated 05.01.2005 for 599 bags sattu, challan No. 1312 dated 05.01.2005 and Form-32 No. 021296/201 were produced in which name of goods mentioned was "Sattu" while on verification it was found that in the packing, constituent of the goods mention was wheat, soyabeen, rice, sugar, vitamin and mineral. It was further stated that on enquiry it was stated that the goods was being imported through Mewar Goods Carrier, Udaipur from Udaipur to Uttaranchal in vehicle No.HR-47-9203 but in the GR no instruction was issued to the driver for the transfer of the goods at U.P. Border nor in the U.P. Border any new GR was issued and on this basis it was inferred that the goods was being imported for unregistered and non-bonafide dealer on the garb of the transit pass with an intent to evade the tax In the supplementary show cause notice it was mentioned that in challan there was a seal of Commercial Tax Officer, Alwar, Rajasthan but there was no serial number and signature of authority. Applicant filed reply to the show cause notice, which was not accepted and the goods were seized vide order dated 13.01.2005 and a sum of Rs. 1,20,000/- was demanded as security. Applicant filed application under the Proviso to Section 13-A (6) of the Act before Deputy Commissioner, Trade Tax Check Post, Mohan Nagar, Ghaziabad, which was rejected vide order dated 24.01.2005. Applicant further filed appeal before Tribunal, which has been rejected by the impugned order.
3. Heard learned counsel for the parties and perused the order of the Tribunal and the authorities below.
4. Tribunal has confirmed the seizure of the goods on the ground that initially good was loaded in vehicle No.HR-47-9203 from Rajasthan, as per challan and builty, which was subsequently transferred in vehicle No.UA-12/4513. It has been observed that in the invoice there was no mention that the goods was to be transferred to another vehicle. Tribunal observed that it has not been explained that why the goods were transferred to another vehicle. Tribunal further observed that on physical verification in place of "sattu" different good namely, a mixture of wheat, soyabeen, vitamin and mineral were found while in the challan "Cereal Based Blanded Food (Sattu)" has been declared. It has been further observed that the builty is made for Uttaranchal but the place of Uttaranchal is not mentioned in the builty for which no proper explanation was given. It is further observed that the authority below has also mentioned in their order that in the builty there was a seal of Commercial Tax Officer, Shahjahanpur, Alwar (Rajasthan), in which the date mentioned was 01.01.2005 but the serial number was blank and on this basis it has been inferred that the builty is forged. On these grounds, the seizure of the good has been upheld.
5. In my opinion, present case is the case of harassment and the arbitrariness on the part of the authorities below in seizing the goods and improper appreciation of the law by the Tribunal and the authorities below. In my view all the aforesaid grounds taken for the seizure of the goods and for denying the issuance of Form-34 (Transit Pass) are irrelevant.
6. Section 28-B of the Act and Rule 87 reads as follows Section 28-B. Transit of goods by road through the State and issue of [authorization for transit of goods/--When a vehicle coming front 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 per son-incharge 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-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 purposes 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 hound for any other place outside the State shall present the trip sheet in triplicate to the officer-in-charge of 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-enquires 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 upto 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 contents of the vehicle for the purpose mentioned in Sub-rule (3). "
7. 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 goods 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 of 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 Hon'ble Supreme Court in the case of Sodhi Transport Company and Anr. v. State of U.P. and Anr., reported in 1986 UPTC, 712 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. Hon'ble Supreme Court has upheld the validity of the provision. The Apex Court held as follows:
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 news papers subject to the provisions of Entry 92-A 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 ancilliary and incidental powers to make the law effective.
Para-9 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 of 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 the 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 connecting 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 can not 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."
8. Section 28-B of the Act is a machinery section, which has been introduced to check the evasion of tax while the goods are in movement from outside the State of U.P. to outside the State of U.P. The provision to issue transit pass at the entry check post and to surrender at the exit check post is to ensure that the good, which entered inside the State of U.P. had gone outside the State of UP. 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 a different goods. Under 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. The objection of the check post officer that in the builty or in the invoice it was not mentioned that the goods would be transferred in another vehicle and no explanation in this regard has been given is irrelevant. What had been happened prior to the arrival of the vehicle at the entry check post is wholly irrelevant. The objection of the check post officer that a different goods were found than the goods mentioned in the challan is also baseless Perusal of the challan shows that the goods mentioned is cereal Based Blanded Food (Sattu). Show cause notice says that on verification it was found that in the packing, constituents of the goods mentioned are wheat, sugar, rice, soyabeen. vitamin and mineral. Therefore, in my opinion, there was no difference in the goods mentioned in the invoice and the goods mentioned in the packing. The items mentioned in packing are the constituent of the Cereal Based Blanded Food for which invoice was issued. The word "Sattu" is mentioned in bracket. It is seen that one particular item is called by different name and arc also understood differently at different places. It may be that Cereal Based Blanded Food, is called as sattu at Rajasthan but in the State of U.P. may be understood differently. Since in the invoice the name "Cereal Based Blanded Food" is mentioned and the same was also found with reference to its constituent namely wheat, soyabeen. sugar, vitamin and mineral, it can not be said that a different item was found than the them mentioned in the invoice. No difference in the quantity was found. Even assuming if according to the check post officer, there was any difference in the name mentioned in the invoice and the name of goods mentioned in Transit Pass. which has been applied, the cheek post officer should mention the correct name of the goods for the proper verification but this can not be a ground to raise any doubt that goods may not cross State of U.P. All the documents namely, challan, builty, and Form-32, which is a declaration form for import under the Uttaranchal Trade Tax Act shows that movement of goods started from Rajasthan and was going to Uttaranchal and was not intended for import inside the State of U.P. The provision of Section 28-A of the Act is not applicable. The inference of an intent to evade tax is based on suspicion and merely on surmises and conjectures and on irrelevant consideration. Therefore, the check post officer has erred in refusing to issue transit pass and seizing the goods and the Tribunal has erred in confirming the seizure of the goods.
9. In the result, revision is allowed. Order of the Tribunal dated 04.02.2005 and the seizure order are quashed. Check post officer is directed to release the goods and to issue transit pass forthwith. Check post officer is also liable to cost for the arbitrary seizure of the goods, which caused harassment and financial loss. The cost is assessed to Rs. 10,000/-. which is payable to the applicant within a period of one month. This Court be informed about the compliance of the order.
10. List on 14.03.2005 for compliance report.