1994 (5) TMI 253 - HC - VAT and Sales Tax

Summary

Issues:
Jurisdiction of Assistant Commissioner of Sales Tax under section 29-A(11) of the M.P. General Sales Tax Act, 1958.

Detailed Analysis:

The petitioner, a proprietary firm engaged in the sale and purchase of supari and other products, hired a truck to transport goods to Indore. During the transportation, the truck was stopped by a tax officer, and both the vehicle and goods were seized based on suspicion that the value indicated in the documents was lower than the market value. The petitioners challenged the seizure and subsequent notice issued under section 29-A(11) of the Act as being without jurisdiction.

The petitioner contended that the Assistant Commissioner of Sales Tax lacked the authority to initiate action under section 29-A(11) beyond ensuring the presence of required documents. It was argued that questioning the value of goods, without evidence of evasion, exceeded the officer's mandate. The Government Advocate for the respondents conceded the lack of legal grounds for the seizure and notice, expressing inability to support them.

The relevant provisions of the Act, particularly section 29-CC, outline the conditions under which action can be taken by the officer. The law requires the transporter to carry specific documents, and inspection is limited to verifying the presence and correctness of these documents. The court emphasized that the power to question the value of goods, as done in this case, was not within the scope of the mentioned provisions.

Referring to a Supreme Court ruling, the court reiterated that prescribed conditions must exist for the exercise of jurisdiction under the law. Since the transporter had all necessary documents in order, no basis for seizure or penalty proceedings existed. The court emphasized the importance of authorities acting within their designated powers to prevent overstepping and illegality.

Ultimately, the court held that the seizure and notice were without jurisdiction and quashed them, along with any related penalty proceedings. The goods and vehicle were released, and any potential action based on price differences was not precluded, provided it complied with other legal provisions. The petition was allowed with no order as to costs, affirming the petitioners' stance on the lack of jurisdiction in the actions taken by the tax officer.