2007 (3) TMI 685 - HC - VAT and Sales Tax

Summary

Issues:
Petitioner's complaint of arbitrary actions by respondents in not permitting movement of coal-laden trucks through Assam without tax payment under Assam Value Added Tax Act, 2003.

Analysis:
The petitioner, engaged in coal sale in Northern India, faces obstacles in transporting coal through Assam due to tax issues. The court emphasizes the need to clarify legislative norms to prevent disputes, ensure smooth trade, and comply with the Constitution. The Assam Value Added Tax Act, 2003, governs the movement of goods in transit, requiring valid documents and transit passes for inter-State trade. The Act mandates checks at entry and exit points in Assam to verify goods and documents, ensuring goods leave the state. The Act empowers the entry check-post to levy security in specific situations, refundable upon goods' exit confirmation. The court stresses the importance of mutual compliance to avoid disputes and maintain social order.

The court notes that while the Act lacks a requirement to record reasons for imposing security, such omissions are intentional and not unintended. However, in a rule of law system, all governmental actions must be reasonable, fair, and based on sound reasons. The court suggests that communicating reasons for imposing security ensures fairness, prevents arbitrariness, and aligns with constitutional principles. Referring to legal precedents, the court highlights the importance of interpreting legislative intent to promote fairness and good administration.

The court underscores the need for the check-post authority to generate satisfaction based on relevant materials before imposing security. While the Act does not mandate detailed reasoning, the court suggests that on-the-spot formulations of reasons should suffice, considering the practical challenges at check-posts. The court directs the movement of the petitioner's coal as per the present order and instructs the Commissioner of Taxes to issue a circular incorporating the order's key points for compliance by officials. Consequently, the writ petition is answered and closed based on the provided directions.