BHARTI AIRTEL LIMITED Vs. COMMISSIONER OF COMMERCIAL TAXES

JUDGEMENT

(1.) This is a revision by the dealer i.e. M/s Bharti Airtel Ltd. under Sec. 11 of the U.P. Trade Tax Act 1948 (hereinafter referred as 'Act 1948') which was admitted by this Court on 7.5.2009 and as stated in the earlier orders it was admitted on the following questions of law:

(2.) The facts of the case, in brief, are that Telecom equipments were being transported by the revisionist-dealer which was registered under the Act 1948 from Jaipur to Lucknow vide vehicle No.RG-14/2 G-7602 on 25.4.2007. The goods were accompanied by the requisite documents including the import declaration form, bill, Beejak of M/s Axis India Pvt. Ltd., Jaipur. The driver of the vehicle entered Agra through Bharatpur, but did not get an endorsement made on the declaration-form on any check-post. On 25.4.2007 the mobile squad of Kanpur stopped the vehicle and inspected it and found that the declaration-form had not been submitted at any check-post nor got passed though the declaration-form in two copies was annexed, therefore, on the suspicion that the form could be used again for transportation of goods and as the value of the goods was more than 10 lacs and as according to the concerned the declaration-forms were not got endorsed with the intent to evade Entry Tax, thus, finding a prima facie violation of Sec. 28-A of the act 1948, a notice was issued under the said provision, whereupon, a reply was submitted by the revisionist-dealer stating that all the requisite documents i.e. the declaration-form, excise gate pass-cum-invoice number of M/s Axis Company Jaipur dated 23.4.2007 and non-returnable gate-pass was annexed along-with the challan, therefore both the consignor and consignee being bona fide and as the goods were being imported for expansion of mobile services and that the declaration-form in two copies with the address of the consignor and consignee was completely filled up, it was stated that the goods were not being imported for sale, but for installation of telecommunication network. On account of lapse of the driver of the vehicle the declaration-form could not be produced at the requisite centre, which was merely a technical lapse. Accordingly, a request for release of the goods was made, but the inquiry officer, on the ground that mistake of law cannot be condoned and that no mens rea was necessary under Sec. 28-A of the Act 1948 and also that the machines being transported could be used for telecom services, therefore, they were taxable under the Right to Use and as the value of the machinery was more than Rs. 10 lacs, therefore, considering the intent to evade Entry Tax the goods were seized/detained, hence security to the extent of Rs. 3163200.00 was demanded on the estimated value of the goods i.e. Rs. 26360000.00. The dealer submitted an application under Sec. 13-A(6) of the Act 1948 whereupon the goods were released on furnishing a surety of Rs. 900000.00 plus Rs. 154400.00 and bank-guarantee of Rs. 2108800.00.

(3.) The mobile squad sent the report dated 19.6.2007 for imposition of penalty to the office of the Deputy Commissioner-I, Trade Tax, Lucknow, whereupon a notice under Sec. 15A(1)(o) of the Act 1948 was issued on prima facie satisfaction regarding violation of Sec. 28-A of the Act 1948. In response thereto, the reply was submitted in the penalty proceedings by the revisionist-dealer stating the same things i.e. all the requisite documents including the declaration-form duly filled were available with the goods and the driver, but were not produced by him inadvertently, which was merely a technical lapse, therefore, no penalty should be levied. Full cooperation was extended at the time of inspection by the mobile squad and all the relevant documents were produced before it. All the columns in the declaration-form had been duly filled. The documents had the requisite seal and signature of the Trade Tax Department of the State of Rajasthan including the bill, bilty etc. All the requisite documents for import of the goods had been provided, but the driver on account of the technical lapse did not produce the same before the inspecting check-post, therefore, there was no malintent to evade tax, as such penalty was not leviable. The dealer-consignee had complied with the provisions of Sec. 28-A(2) and had provided the consignor with regular documents for import. Various decisions were relied upon by the counsels for the dealer in support of the contentions to the effect that mens rea was necessary for imposition of penalty under Sec. 15-A read with Sec. 28-A of the Act 1948. Other decisions were cited to the effect that if the goods were not being imported for sale, then mens rea was not established. Another decision in the case of B.S.N.L. Ltd. Vs. Union of Indiaors., 2006 N.T.N. Vol.29 307 was cited to put forth the contention that there is no tax liability in respect of cellular mobile service involving mere Right to Use and that such tax liability would be imposed only in the case of sale of S.I.M. card.