1971 (11) TMI 153 - HC - VAT and Sales Tax

Issues Involved:
1. Legitimacy of the notices served on the drivers under Section 44 of the Madras General Sales Tax Act, 1959.
2. Whether the petitioners have the standing to file the writ petitions.
3. Determination of wilful contravention of Section 44 of the Act.
4. Jurisdiction and authority of the Check Post Officer in issuing the notices.

Detailed Analysis:

1. Legitimacy of the Notices Served on the Drivers:
The primary issue revolves around the notices served on the drivers for allegedly contravening Section 44 of the Madras General Sales Tax Act, 1959. The court examined whether the transportation of goods was accompanied by the requisite documents. In W.P. No. 455 of 1970, the consignment of 91 bags of buller seeds was sent for "commission sales" and was accompanied by a pro forma invoice, not a sale document. The Check Post Officer intercepted the goods and noted defects such as the absence of a bill or delivery note and lack of supporting documents for commission sales. Similarly, in W.P. No. 3581 of 1968, the goods were accompanied by a letter from the petitioners to the transport company. The court found that the Check Post Officer did not conduct a reasonable inquiry to establish that there was a wilful contravention of Section 44, leading to an assumption without foundation.

2. Standing of the Petitioners to File the Writ Petitions:
The revenue contended that the petitioners were not entitled to file the writ petitions as the notices were served on the drivers, not the petitioners. The court disagreed, stating that the petitioners had a perceivable interest in the subject matter since the goods belonged to them. The court emphasized that the petitioners' interests were directly affected by the notices, making them "persons aggrieved" and eligible to seek redress. The court cited precedents to support this view, including the decision in Asea Electric (India) P. Ltd. v. Joint Commercial Tax Officer, which highlighted that the determination of an "aggrieved person" depends on the specific facts of each case.

3. Determination of Wilful Contravention of Section 44:
The court scrutinized whether the transportation of goods was in wilful contravention of Section 44. The court noted that the Check Post Officer must establish or at least subjectively satisfy himself that there has been a wilful contravention. In both cases, the court found that the documents accompanying the goods indicated legitimate transportation without the intention of evading tax. The court criticized the Check Post Officer for not applying his mind to the documents and failing to conduct a reasonable inquiry. The court concluded that the assumption of tax evasion was without foundation and that the notices were issued without jurisdiction.

4. Jurisdiction and Authority of the Check Post Officer:
The court examined the jurisdiction and authority of the Check Post Officer in issuing the notices. The court held that the officer's actions were not justified as there was no reasonable inquiry or application of mind to establish a wilful contravention of Section 44. The court emphasized that each case must be decided on its own merits and that the officer must be satisfied, at least subjectively, that there has been a wilful contravention. The court found that the officer's actions were flippant and unsatisfactory, leading to an erroneous assumption of tax evasion.

Conclusion:
The court declared that the notices served on the drivers were without jurisdiction and illegal. The court made the rules absolute and allowed the petitions, emphasizing that the petitioners had real interests in the subject matter and were entitled to seek redress. The court's decision underscores the importance of a reasonable inquiry and proper application of mind by the authorities before issuing notices for alleged contraventions.

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