1967 (3) TMI 91 - HC - VAT and Sales Tax

Summary

Issues:
1. Imposition of penalty in lieu of confiscation on the owner of the goods through his driver.
2. Interpretation of Section 42(3) with related rules for confiscation of goods under transport.
3. Requirement for the dealer or owner to pay penalty in lieu of confiscation.

Detailed Analysis:
1. The judgment revolves around the imposition of a penalty in lieu of confiscation on the owner of goods through his driver. The petitioner, claimed to be the owner of a lorry, had the vehicle stopped and checked by the Deputy Commercial Tax Officer. The driver, in the absence of delivery notes or sale bills, drove away the vehicle initially but returned later. A penalty of Rs. 750 was levied in lieu of confiscation, which the driver paid on the spot. The Tribunal dismissed the petitioner's appeal, leading to the contention before the High Court.

2. The interpretation of Section 42(3) of the Madras General Sales Tax Rules, 1959, was crucial in this case. The section empowers the officer-in-charge of a check post to seize and confiscate goods under transport if not covered by necessary documents. The rules specify the procedure for confiscation, indicating that goods are confiscated as those of a dealer or owner. The court highlighted that the provision allowing payment in lieu of confiscation cannot apply to the owner of the lorry unless proven to be the dealer or owner of the goods.

3. The court emphasized the requirement for the dealer or owner to pay the penalty in lieu of confiscation. It rejected the argument that the penalty could be imposed on the owner merely because the driver paid it in the absence of assistance to find the real dealer or owner. The court held that the revenue can only accept money in lieu of confiscation from the owner or dealer of the goods. Consequently, the court allowed the petition, set aside the Tribunal's order, and remitted the appeal for fresh disposal, emphasizing the necessity for a finding regarding the ownership or dealership of the goods before imposing penalties.