Delhi High Court in its recent judgement held that information about the goods must be produced within a reasonable time by the person in whose custody the goods were found.
The appellant, Rashtriya Transport Corporation challenged an order dated 26.08.2021, passed by the Appellate Tribunal Value Added Tax, Delhi which confirmed the levy of tax amounting to ₹4,91,096/- as well as levy of penalty under Section 86(14) of the Delhi Value Added Tax Act, 2004.
The appellant is engaged in carrying on the business of transportation of goods under the name and style of his proprietorship concern. The appellant is not a registered dealer under the Delhi Value-Added Tax Act. It was claimed by the appellant that he had taken on rent a godown at 83-84, Gali No. 2, Master Mohalla, LibasPur, New Delhi. On 09.03.2006, the Value Added Tax Officer (VATO) inspected the said godown and found that lakh/rubber was stored in the said premises.
The statement of Sh. Ram Kumar Sharma, the Manager of the godown, was recorded. He stated that he was unable to produce the documents/books of accounts related to the goods stored in the godown.
The VATO passed an order directing that the goods should not be moved. The appellant claimed that he transports goods on behalf of his customers and delivers the same to various consignees at their directions along with the requisite documents. The appellant also assured that the goods would be delivered only when the same would be released by the VATO.
The VATO passed an order of default assessment under Section 32 read with Section 3(9) of the Delhi Value Added Tax Act assessing tax at the rate of 4 per cent of the value of the goods of ₹1,22,77,400/- which worked out to ₹4,91,096/-. In addition, the VATO also imposed a penalty of an equivalent amount under Section 86(19) of the Delhi Value Added Tax Act on account of goods being transported without proper documentation.
The Objection Hearing Authority (OHA) held that since the documents had not been produced at the time of inspection, the appellant was liable to pay tax on the goods as assessed.
On appeal, the Appellate Tribunal concluded that there was nothing on record to rebut the presumption under Section 3(9) of the Delhi Value-Added Tax Act. On the issue of the levy of penalty under Section 86(19) of the DVAT, the Appellate Tribunal accepted the appellant’s contention that the goods in question were not required to be considered as “being carried” by transport and therefore, the penalty could not be levied under Section 86(19) of the Delhi Value Added Tax Act.
It was evident that Section 3(9) of the Delhi Value Added Tax Act does not specifically provide a time frame for the submission of documents. It merely contemplates a presumption as to the ownership of the goods if the person in custody fails to furnish any information in possession regarding the goods on being required to do so by the Commissioner.
A Coram comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that “it would be open for a person found in the custody of goods to produce the relevant information in its possession in respect of the goods within a reasonable time on being required to do so by the Commissioner.”
The Court set aside the impugned order and the appellant’s appeal is restored to the Appellate Tribunal. The Appellate Tribunal shall consider the documents as produced by the appellant and take an informed decision on the appellant’s appeal.To Read the full text of the Order CLICK HERE
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RASHTRIYA TRANSPORT CORPORATION vs COMMISSIONER OF DELHI GOODS AND SERVICE TAX
CITATION: 2023 TAXSCAN (HC) 677
Counsel for Appellant: Mr. Rajesh Mahna, Mrs. Sonia Sharma, Mr. Mayank Kouts
Counsel for Respondent: Mr. Anuj Aggarwal, Ms. Ayushi Bansal, Mr. Sanyam Suri
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