DIAMOND FREIGHT CARRIERS Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) AGGRIEVED by the orders passed by the Appellate Deputy Commissioner (CT), Warangal in Appeal No. D/97/2000 -01, dated 2 -9 -2002, the present appeal has been preferred. The appellant is M/s. Diamond Freight Carriers, Adilabad. It is a transport company. During the course of vehicular check conducted by the Commercial Tax Officer, Adilabad on 11 -10 -2000, one lorry was checked and it was found that most of the goods were not supported by proper documents like bill and way -bill in support of the goods under transport. In continuation of the vehicular check, the assessing authority proceeded with the lorry to the premises of the transport company and found one old gunny bag full of LRs (Lorry Receipts). He scrutinized the LRs and observed that there were many blanks without particulars in LRs such as full name and addresses of the consignors or consignees, so much so the LRs are silent in respect of the commodities with particulars of the commodities, except regarding the quantity of goods, freight and weight. He collected tax and penalty of Rs. 18,426/ - on 11 -10 -2000 which is from Hyderabad to Adilabad. The Commercial Tax Officer observed that every transport company is expected to keep the records and registers for the goods booked and also a separate register for the goods delivered in the prescribed format showing the particulars of names and consignees and consignors and name of the commodity and value of the commodities. It is observed by him that the transporter violated Rule 45 -F of APGST Rules, 19957. It is observed by him that the assessee is intentionally helping the dealers to do clandestine business daily through his transport company. Since there is no evidence except the freight charges collected to the tune of Rs. 4,75,631/ -, it is further observed by the assessing authority that the transport company might have transported the goods which are exigible to tax @ 12% and 16%. As such, he estimated the value of the good on the basis of the freight charges, arrived at the figure of Rs. 25/ - per quintal towards freight charges and accordingly he calculated that the value of the goods would be 1,000/ - per quintal. Accordingly, he made best judgment of the turnover of the transporter company, treating as if he is a dealer in goods. Accordingly, he assessed on the gross and net turnovers as detailed below:

(2.) A show cause notice was issued to him. The Transporters sent a reply stating that they are only transporters carrying goods and it is not a dealer. The appellant objected to the very proposal of turnovers alleging that there is no evidence to prove that they are doing business. However, the assessing authority confirmed the proposal made by him and levied tax as indicated above. Aggrieved by the order, the appellant preferred appeal before the Appellate Deputy Commissioner (CT), Warangal, to the fate of the appellant, the same was dismissed by the Appellate Deputy Commissioner.

(3.) AT the time of hearing of the appeal, it has been contended by the learned counsel that the assessing authority as well as the Appellate Authority committed grave error in making the best judgment assessment on a transporter, who is not at all a dealer. It is argued that the appellant is only a transporter, who carries goods in his vehicles as a Bailor under Bailment Contract. The duty and obligation cast upon the appellant is to receive the goods from the consignor under various LRs and to deliver the goods to the consignee at the destination point by collecting bailment charges. The appellant is nothing to do with the ownership of the goods. The appellant is neither doing business in goods nor collecting any sale consideration from anybody. It is therefore, argued that the orders passed by the Appellate Deputy Commissioner are to be set -aside. The State Representative did not state anything.