KAR MOBILE LIMITED Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) This revision is directed against an order dated January 8, 1993 passed by the Sales Tax Tribunal, Jhansi Bench, Jhansi. The dispute arises out of proceedings taken under section 28-A read with section 13-A (6) of the U. P. Sales Tax Act (for short "the Act" ). The petitioner is stated to be a registered firm under the Karnataka Sales Tax Act and the Central Sales Tax Act. It is engaged in the manufacture of tractor parts at its unit at Bangalore. It seems that certain tractor parts were consigned by the petitioner by road transport and were being sent to Gorakhpur accompanied by the relevant documents including form 31, said to have been issued by a firm known as M/s. Girraj Auto Agencies of Gorakhpur. The vehicle carrying the goods was checked at Raksha Check-post, Jhansi and was detained under section 28-A (6) of the Act on account of certain irregularities noticed in the documents accompanying the goods. The order of seizure directed that the petitioner may get the goods released on furnishing cash security to the tune of Rs. 52,000 being 40 per cent of the value of the goods. Feeling aggrieved, the petitioner represented the matter before the Assistant Commissioner (Check-post), Sales Tax, Jhansi, under section 13-A (6) of the Act, who maintained the order of seizure but directed that the applicant may furnish security only to the extent of Rs. 19,500 which was three times of the tax sought to be evaded. An appeal against that order to the Sales Tax Tribunal was dismissed by the impugned order. This revision has been filed challenging the order passed by the Sales Tax Tribunal. I have heard learned counsel for the applicant and the learned Standing Counsel who represents the sole respondent. In my opinion, this revision can be disposed of finally without inviting any counter-affidavit. Irregularity noticed by the tax authority was that the order in pursuance to which the goods were despatched was placed by M/s. Krishna Brothers, Gorakhpur and the excise gate pass also mentioned that name whereas the bills and invoices were raised against M/s. Girraj Auto Agency and form 31 was also issued by that concern. The petitioner furnished certain explanation for these irregularities, which was not found acceptable by the tax authorities including the Sales Tax Tribunal. It may be stated that sub-section (6) of section 28-A, inter alia, contemplates that where the officer making the search or inspection under this section finds any person transporting or attempting or abetting to transport any goods to which this section applies without being, covered by proper and genuine documents and if for the reasons to be recorded, he is satisfied that such goods were being so transported in an attempt to evade assessment or payment of tax due or likely to be due under the Act, he may order detention of such goods. Sub-section (7) of section 28-A provides that sub-section (6) of section 13-A, amongst other sections, shall mutatis mutandis apply to such detention as they apply to seizure under that section. A perusal of section 13-A (6) would show that it authorises the officer seizing the goods to serve on the dealer or, as the case may be, the person in-charge an order in writing mentioning the fact of such seizure and indicating the amount that would be sufficient to cover the penalty likely to be imposed on deposit whereof, in cash, the goods so seized may be released in favour of the dealer or, as the case may be, the person-in-charge. The proviso to that sub-section, inter alia, authorises the Assistant Commissioner of Sales Tax for sufficient reasons to be recorded in writing that goods be released on furnishing security in such nature other than cash, as he may deem fit. It is evident that the amount demanded under sub-section (6) of section 13-A from a dealer is by way of security to cover the amount of tax and penalty that may ultimately be assessed and imposed. There is nothing on the record to show whether any penalty proceedings have been initiated so far. It is not disputed for the petitioner that there were some irregularities in the documents accompanying the goods. The question as to whether those irregularities were accidental or with a view to evade the payment of tax is yet to be gone into by the tax authorities. For the present, the only question that arises for consideration is whether the goods could be let off without security, and if the demand of security was warranted, whether on the facts it should have been only in cash or some other kind of security would have served the purpose. Without entering into the merits as to whether there was any attempt to evade the payment of any due tax under the Act, in my opinion, in the facts and circumstances of the case, a security other than cash or a bank guarantee instead of cash would have served the purpose of securing the interest of the Revenue. The revision is accordingly, disposed of with the direction that if the petitioner furnishes a security other than cash to the sum as directed by the Assistant Commissioner, Sales Tax, Check-post, Jhansi, to the satisfaction of the said officer, the goods may be released. Penalty proceedings may, however, be expedited and concluded at an early date. The security so furnished shall be subject to the orders passed in penalty proceedings. To the extent, the order of the Sales Tax Tribunal is contrary to the directions as given above, cannot be sustained and is set aside. In giving effect to this order the Sales Tax Tribunal shall restore the appeal giving rise to this revision in conformity with the order passed by this Court. The revision succeeds and is allowed in part. There shall be no order as to costs. Petition partly allowed. .