JUDGMENT I.M.Quddusi, J.
1. The present revision has been filed against the order dated January 25, 2001, passed by the Trade Tax Tribunal confirming the imposition of penalty order under Section 15-A(1) of the U.P. Trade Tax Act, 1948 (hereinafter referred to as "the Act") for the alleged violation of Section 28-A of the U.P. Trade Tax Act, 1948.
2. Before adverting to the various contentions raised by the revisionist and opposite parties, it is necessary to state the facts which have led to the filing of this revision and are borne out from a perusal of the pleadings on record, The revisionist is a manufacturer of soft drinks in Uttar Pradesh, having two bottling plants which manufactures the aforesaid soft drinks.
3. The revisionist on January 8, 1998, placed a purchase order for the supply of soft drinks concentrates which is the raw material needed for producing soft drinks from a company based in Patiala known as Pepsi Foods Limited. A perusal of the purchase order which has been annexed with the revision-petition, shows that the revisionist had placed orders for the purchase of 200 units of Pepsi concentrate, nine units of 7-UP concentrates, 81 units of Mirinda concentrates and 12 units of TEEM concentrate from Pepsi Foods Limited.
4. The Patiala based company, i.e., Pepsi Foods Limited despatched the above-mentioned soft drinks concentrates by means of three different consignments, out of which two bearing invoice No. 673, dated January 29, 1998, and invoice No : 689, dated January 13, 1998, were passed by the trade tax authorities but the third consignment of 120 units of Pepsi bearing invoice No : 687, dated January 30, 1998, was detained by the check-post officer, Sarsawan, on February 2, 1998,
5. A show cause notice was issued on February 2, 1998, i.e., the date when the consignment was detained and the reasons cited in the show cause notice was that the driver of the truck had not mentioned the goods, which he was carrying in the truck, in the trip sheet. The show cause notice further stated that the form XXXI which the driver had produced, was obsolete and therefore, the revisionist was asked to show cause and explain why action may not be taken against him under Section 13-A/28-A of the Trade Tax Act, 1948. A seizure order was passed by the trade tax authorities on February 7, 1998, and a penalty notice was also issued against the revisionist under Section 15-A(1)(o) for the violation of Section 28-A of the Act. A penalty of Rs. 22,59,684 was imposed by the trade tax authorities by means of the order dated August 11, 1998.
6. The revisionist preferred an appeal against the imposition of penalty and this appeal was partly allowed by the Deputy Commissioner (Appeals) vide his order dated July 20, 1999, who, while upholding the imposition of penalty, was pleased to reduce the penalty amount by Rs. 2,59,684. The revisionist aggrieved by the order confirming the penalty, passed by the Deputy Commissioner (Appeals), filed a second appeal before the Trade Tax Tribunal. The Trade Tax Tribunal confirmed the orders imposing the penalty and dismissed the second appeal of the revisionist by means of the order dated January 25, 2001.
7. A perusal of the order of the Deputy Commissioner (Appeals) reveals that while partly allowing the appeal of the revisionist, the Deputy Commissioner (Appeals) has held that the revisionist was in possession of the new series of form XXXI and despite this he used an expired series of form XXXI which raises a suspicion that the revisionist harboured the intention of evading tax. The Deputy Commissioner (Appeals) has further recorded a finding that the non-mention of the goods in the trip sheet also fortifies the belief that the revisionist was intending to evade payment of tax. The other reasoning which the Deputy Commissioner (Appeals) has given for upholding the imposition -of penalty on the revisionist is that he failed to adhere to the time Schedule and this confirms the fact that the revisionist was intending to evade payment of tax and imposition of penalty on the revisionist was justified.
8. A perusal of the order passed by the Trade Tax Tribunal reveals that it has upheld the orders passed by the Deputy Commissioner (Appeals) and dismissed both the appeals, i.e., of the revisionist as well as of the department. The Trade Tax Tribunal has held that the facts and circumstances of the case led to an inference that the revisionist was intending to evade tax and thus was guilty of contravening the provisions of Section 28-A of the Act. The Tribunal has held that the goods were not accompanied with proper cash memos, bills and challans and there was no mention of the goods in the trip sheet and this fact has also not been satisfactorily explained by the revisionist. The Tribunal has further held that the revisionist has also failed to properly explain the fact why old series of form XXXI were being used when new series of form XXXI had already been issued to the revisionist. The Tribunal, therefore, due to these reasons, has upheld the order of the Deputy Commissioner (Appeals) and dismissed the second appeal of the revisionist.
9. Sri Bharatji Agrawal, the learned Senior Advocate appearing for the revisionist has submitted that the Tribunal had erred in dismissing the appeal of the revisionist and has submitted that the order of the Trade Tax Tribunal and the Deputy Commissioner (Appeals) suffers from the following infirmities and is liable to be set aside for the following reasons :
(a) All the documents, namely G.R., form XXXI, etc., have been produced by the driver of the truck before the issue of notice for detention and seizure before the Sales Tax Officer, check-post, hence in view of division Bench decision of this Court, no seizure could have been legally made what to say of imposing penalty for the alleged violation of Section 28-A, since there was no intention of the applicant-company to evade the payment of tax. Purchase order of January 8, 1998 are duly recorded in the account books of the applicant, in pursuance of which major part of concentrate/raw material has already been received by the applicant-company, which despatched from Patiala and were received on January 30, 1998, and February 1, 1998.
(b) Because material of the same purchase order dated January 8, 1998 could not have been avoided by the applicant-company to be shown, since the entire purchase order dated January 8, 1998 was already referred to in all the documents, which were coming along with the first and third consignments.
(c) Trade Tax Tribunal has upheld the imposition of penalty on a new ground that no application under Section 13-A(6) was filed by the company against the seizure order dated February 2, 1998.
10. The learned counsel for the revisionist has submitted that the Tribunal as well as the Deputy Commissioner (Appeals) ignored the position of law and have wrongly interpreted Section 28-A of the Trade Tax Act, 1948 and the driver of the truck had, before passing of the seizure order, submitted all the documents and merely for this default of the driver, the revisionist cannot be held liable, and be charged for violating Section 28-A of the Act. The learned counsel has relied on the decision of this Court titled as Jain Shudh Vanaspati Ltd. v. State of U.P. reported in [1983] 53 STC 54 ; 1983 UPTC 198 and has drawn the attention of this Court to paragraph 23 of the aforesaid decision, in which it has been held as under :
".........the section does not authorise the sales tax authorities either to seize the said goods or to penalise the importer thereof on any such assumption. Its present basis is the attempt to evade tax. The power to detain the goods and levy penalty in respect thereof cannot be exercised merely for the reason that the said goods were not accompanied by the requisite documents or that the documents accompanying them were false. This power can be exercised only if the goods detained are not accompanied by the requisite documents or that the documents accompanying them are false and if there is material before the detaining authority to indicate that the goods are being imported in an attempt to evade assessment or payment of tax due or likely to be due under the Act."
11. The learned counsel has submitted that in view of the above decision, the Tribunal and the Deputy Commissioner (Appeals) erred in holding that the revisionist was guilty of violating Section 28-A, as there was no material before the authorities which indicated that there was an attempt to evade tax and the relevant documents were produced before the seizure order was passed and therefore, there was no justification for imposing the penalty.
12. The learned counsel, as regards the other aspects of the matter that the form XXXI produced by the revisionist at the time of inspection was obsolete, has submitted that the validity of form XXXI was extended by the Commissioner of Trade Tax by Notification No. 377, dated November 19, 1997, which stated that the form XXXI would remain valid till March 31, 1998, and they would be acceptable at all check-posts in the State of Uttar Pradesh. He has further submitted that the circular issued by the Commissioner is binding on the trade tax authorities. The learned counsel has further relied on the decision of this Court in the case of Bharat Ply-wood Products Pvt. Ltd. v. Commissioner of Sales Tax reported in [1990] 79 STC 400 ; 1989 UPTC 1097 at 1102 in which it has been held that no penalty can be imposed even if form XXXI which has become obsolete subsequent to the issuance, even if the goods have arrived after the validity period of form XXXI has expired. The learned counsel for the revisionist has further urged that when there was no intention to evade tax and the goods were being, legally imported, the revisionist should not have been charged for this technical breach, in view of the decision of the court titled as Commissioner of Sales Tax v. Jaipur Golden Transport Co., Delhi, reported in 1999 UPTC 1167.
13. The learned counsel relying on a decision of this Court in the case of Noida Polychem Pvt. Ltd. v. Commissioner of Trade Tax reported in [1999] 115 STC 120 ; 1999 UPTC 839, has urged that under Rules so far as the assessee is concerned his responsibility was over, once form XXXI and other documents were handed over to the driver of the truck and therefore, for the default of the driver, the penalty should not have been imposed on the revisionist. The learned counsel has further submitted that in the case of Hyderabad Industries Ltd. v. Commissioner of Sales Tax reported in 1996 UPTC 776, this Court has held that failure of the driver to produce the documents at the check-post as is the requirement of Rules 84(4) and 83(5) of the Act, would not make the owner of the goods liable for this breach and therefore, no penalty can be imposed on the owner of the goods.
14. The learned counsel has lastly urged that the purchase order was despatched by means of three consignments and two consignments were received by the revisionist, whereas the third consignment was detained by the trade tax authorities and in view of the decision of this Court, titled as Garg Associates Pvt. Ltd. v. Commissioner of Sales Tax reported in 1993 UPTC 79, no penalty can be imposed even if the form XXXI was not produced at the time of checking as the consignment it was part of one purchase order.
15. The counsel for both the parties were granted time to file written submissions, but the learned Standing Counsel despite sufficient time being granted by this Court has not filed the written submissions.
16. The learned Standing Counsel in reply to the arguments of the learned counsel for the revisionist, has submitted and relied on the averments made in the short counter-affidavit filed by the State and has urged that the orders passed by the Deputy Commissioner (Appeals) and Trade Tax Tribunal do not suffer from any infirmity and after diligently examining the relevant provisions of the Act as well as the records, have imposed the penalty. The learned Standing Counsel has urged that the driver of the truck has failed to produce the documents at the time of checking and was unable to produce papers relating to import of 80 drums of Pepsi which had been hidden under the consignment of cycle tyres and therefore, the revisionist was guilty of attempting to mislead the check-post authorities with a view to evade payment of tax and therefore has violated Section 28-A of the Act and thus the penalty imposed under Section 15-A has been rightly imposed and the revisionist is liable to pay the same.
17. I have considered the various submissions advanced by the learned counsel for the parties. It is necessary to peruse Section 28-A of the Act and Rule 84(4)(a) and Rule 83(5)(a) which are being reproduced as under :
"Section 28-A. Import of goods into the State against declaration.--(1) Any person (hereinafter in this section referred to as "the importer") who intends to bring, import or otherwise receive, into the State from any place without the State, any goods other than the goods exempt under Clause (a) of Section 4 in such quantity or measure or of such value, exceeds,--
(a)(i) twenty kilograms in the case of foodgrains, cereals, pulses, soyabean, and all products thereof, and all raw materials including resin, rosin or oil seeds used for extracting oils of any kind ; or
(ii) rupees fifty, in the case of other goods ; or
(b) the quantity, measure or value notified by the State Government in that behalf, in connection with business, shall obtain the prescribed form of declaration on payment of the prescribed fee from the assessing authority having jurisdiction over the area where his principal place of business is situated or, in case there is no such place, where he ordinarily resides :
Provided that where the importer intends to bring, import or otherwise receive such goods otherwise than in connection with business, he may, at his option, in the like manner obtain the prescribed form of certificate.
(2) Where such goods are to be consigned by road,--
(a) the importer shall furnish to the consignor the declaration in the prescribed form in duplicate duly filled in and signed by him and driver or any other person-in-charge of any vehicle carrying any such goods carry with him the copies of such declaration duly verified by the consignor in the prescribed manner together with such other documents as may be prescribed and shall before crossing any check-post or barrier established under Section 28, deliver one copy of such declaration...."
The documents which have been prescribed, which have to be accompanied along with the consignment of the goods coming by road, have been prescribed under Rule 83(4) which provides as follows :
"83(4)(a) The owner, driver or any other person in-charge of the vehicle or vessel shall, in respect of such goods carried in the vehicle or vessel as are notified under or referred in Sub-section (1) of Section 28-A and as exceed the quantity, measure or value specified in the notification therein, carry with him the following documents :
(i) form of declaration for import of certificate in form XXXII, hereinafter in the Rules in this chapter referred to as declaration or certificate, as the case my be, in duplicate ;
(ii) cash memo, bill or challan;
(iii) authorisation for transfer of goods/goods challan hereinafter referred to as trip sheet in triplicate.
(b) The owner, driver or any other person in-charge of the vehicle or vessel shall in respect of all other goods carried in such vehicle or vessel carry with him a trip sheet in triplicate.
(5)(a) The owner, driver or any other person in-charge of the vehicle or vessel shall produce the documents mentioned in Sub-rule (4) before the officer in-charge of the check-post or barrier before any other officer not below the rank of an assessing authority on demand.
(b) At the first check-post or barrier after his entry into the State, the owner, driver or any other person in-charge of the vehicle or vessel, as the case may be, shall give the original and duplicate copies each of the declaration or certificate and original, duplicate and triplicate copies of the trip sheet to the officer in-charge of the said check-post or barrier who will after satisfying himself about their completeness and correctness, sign and stamp them with his official seal and return the duplicate copy of the declaration or certificate and the triplicate copy of the trip sheet after endorsing thereon, for the copy received, a receipt duly dated mentioning time and place."
18. A perusal of the above provisions spell out the intention of the enactment which is abundantly clear that penalty can only be imposed under Section 15-A(1)(o), if there is any attempt to evade tax by importing goods in an unauthorised manner into the State.
19. I have perused the order passed by the Tribunal. The purchase order dated January 8, 1998 was given by the revisionist to the Pepsi Food Ltd., Patiala for supply of concentrate and the same was to be delivered by January 30, 1998. The two consignments of the three consignments from the same purchase order dated January 8, 1998, were passed on January 30, 1998, but the third one, dispatched vide invoice No : 687 dated January 30, 1998, was detained by the check-post, Sarsava, on the ground that the driver of the truck was unable to produce form XXXI and failed to mention the goods in the trip sheet. Besides form XXXI had also expired on January 31, 1998. The contention of the revisionist was that due to the lapse on the part of the driver of the truck, no penalty can be imposed on the revisionist particularly when the revisionist had taken every care of and all the documents including form XXXI were already produced before the check-post officer and prior to issue of show cause notice and passing of the seizure order. It was also submitted that the revisionist was not liable to pay any penalty when the validity of form XXXI expiring on January 31, 1998 was extended up to March 31, 1998. Even otherwise, form XXXI was sent by the revisionist much earlier, i.e., before January 31, 1998, the date of expiry of form XXXI to seller at Punjab. The contention of the department was that the penalty of Rs. 22,59,685 was rightly imposed by the Assistant Commissioner (Assessment), but the Deputy Commissioner (Appeals) wrongly reduced the penalty by Rs. 2,59,684. The learned counsel for the respondent further submitted that the contention of the revisionist that for the fault of the transporter, revisionist should not be penalised is not correct but on the other hand, non-filing of form XXXV by the transporter in the case establishes the collusion between the transporter and the revisionist and the expired form XXXI was rightly rejected by the check-post officer. He further submitted that the various judgments relied upon are not applicable in the present case but the case is covered by a judgment reported in [1988] 69 STC 356 (All.); 1987 UPTC 1093 [Behari Lal Ram Kishun Lal v. Commissioner of Sales Tax].
20. Having heard the submission made by the parties and going through the various judgments relied on by the parties, as mentioned above, I am of the view that the non-production of form XXXI at the time of checking would not render the goods which are being brought into the State as being unauthorised as the drive before passing the seizure order had submitted the form XXXI. The premise that the form XXXI submitted was obsolete and therefore, the revisionist is liable to be penalised for this breach is unfounded as the Trade Tax Commissioner had, by his own circular, extended the validity of form XXXI and this circular was binding on the authorities and the action of the official at the check-post in ignoring this circular, was clearly not warranted and the authorities at the check-post should not have passed the seizure order dated February 8, 1998, in violation of the circular dated February 4, 1998, which resulted in the penalty being imposed on the revisionist. The Deputy Commissioner (Appeals) and Trade Tax Tribunal have also ignored the circular dated February 4, 1998, which as per the decision of the honourable Supreme Court referred above, was binding on the authorities, and therefore, on this ground alone, the penalty order should have been set aside. The reasoning that the form XXXI was obsolete, therefore falls, and even if assuming that the form XXXI was obsolete, no penalty on the goods could have been imposed as the goods which were being brought into the State by those form XXXI, were sent by the revisionist much prior to January 31, 1998, and the goods were transported on January 30, 1998, and therefore, the revisionist cannot be held for the lapse of the transporter. So far as non-filing of form XXXV is concerned, it is the responsibility of the transporter and for this lapse, no inference can be drawn that the transporter and the revisionist were in collusion to evade tax and therefore, I hold that no penalty can be imposed upon the revisionist on this ground also. So far as the loading of tyres of Ralso India, Ludhiana by the transporter is concerned, revisionist has no role in this transaction and this cannot be a ground to hold that the revisionist has intention to evade tax. Moreover, the delay in producing the documents at the check-post by the driver, does not establish the intention of the revisionist to evade tax and therefore, for this reason also, the penalty could not have been imposed. The decision cited by the learned counsel for the revisionist fully supports the case of the revisionist and it is well-settled proposition that when there is no intention to evade tax, penalty should not be imposed. It is unfortunate due to over-zealous attitude of the authorities, it sometimes, results in mis-carriage of justice. The Trade Tax Tribunal as well as Deputy Commissioner (Appeals) have therefore grossly erred in upholding the imposition of penalty.
21. I, therefore, allow the revision and set aside the impugned orders of the Tribunal and the order imposing the penalty and direct the trade tax authorities to refund the amount deposited by the revisionist with 12 per cent interest from the date of deposit, within three months from the date of the certified copy of the order is produced.
22. There shall be no order as to costs,