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TMI Blog1986 (3) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... dency of these appeals or petitions, not filed any appeal or revision against any order passed under the Act, such appellant or petitioner may prefer such appeal or revision, as the case may be, on or before April 30, 1986, and if any such appeal or revision is filed it shall be disposed of by the concerned authority without raising any objection as to the period of limitation. - Civil Appeal No. 3376-3380, 3382 of 1982, 3134 -3142, 3232, 3291, 3293, 3364, 3365, 3433, 3434, 4005, 4006 of 1982, 69, 10682 of 1983, - - - Dated:- 20-3-1986 - VENKATARAMIAH E.S. AND THAKKAR M.P. JJ. Civil Appeal No. 3376-3380, 3382 of 1982, 3134 -3142, 3232, 3291, 3293, 3364, 3365, 3433, 3434, 4005, 4006 of 1982, 69, 10682 of 1983, Writ Petition No. 663, Writ Petition No. 9433 of 1981, Writ Petition No. 3212, Writ Petition No. 11275, Writ Petition No. 11288, Writ Petition No. 13062 of 1984, Writ Petition No. 434, Writ Petition No. 2785, Writ Petition No. 2691, Writ Petition No. 5340, Writ Petition No. 9920, Writ Petition No. 12788, Writ Petition No. 11689, Writ Petition No. 11979 of 1985, Writ Petition No. 4295, Writ Petition No. 4296, Writ Petition No. 4297, Writ Petition No. 9715, Writ Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeals for purposes of all these cases as the questions involved are mostly legal issues. The appellants who claim to be engaged in the business of transport of goods belonging to others for hire from one place to another and who in the course of their business have to carry goods from one State to another State along roads lying in the State of Uttar Pradesh filed the writ petitions out of which these appeals arise feeling aggrieved by the restrictions imposed on them by section 28-B of the Act and rule 87 of the Rules and the orders of assessment passed under the Act against them by the sales tax authorities of the State of Uttar Pradesh. The Legislature of a State is entitled to levy tax on sales under entry 54 of List II of the Seventh Schedule to the Constitution. The Act, however, came into force prior to the commencement of the Constitution. When the State of Uttar Pradesh found that there was large scale evasion of sales tax by persons engaged in trade who were bringing goods from outside the State of Uttar Pradesh into that State the legislature enacted certain measures by way of amendment of the Act to prevent as far as possible such evasion. First, section 28 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent) Rules, 1974, for the purpose of section 28-B of the Act reads thus: "87. Transit of goods by road through the State and issue of transit pass.-(1) The driver or other person-in-charge of a vehicle shall, in order to obtain a pass under section 28-13, submit an application, in triplicate, in form XXXIV to the officer-in-charge of the check post or barrier, if any, established near the point of entry into the State, hereinafter referred to as Entry Check Post. (2) The officer-in-charge of the Entry Check Post shall, after examining the document and after making such enquiries as he deems necessary, issue a pass on the duplicate and triplicate copies of the application, retaining the original himself. The pass shall specify the check post or barrier (hereinafter referred to as the Exit Check Post) of the State to be crossed by the vehicle or vessel and the time and date up to which it should be so crossed. (3) The driver or other person-in-charge of the vehicle or vessel shall stop his vehicle at such Exit Check Post, surrender the duplicate copy of the pass and allow the officer-in-charge of the check post to inspect the documents, consignments and goods in order to ensu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or before.........................................(date). Place............................ Date............................. Time............................ Signature of the Officer I/c Check Post (SEAL) ------------------------------------------------------------------------------------------------------------- *Strike out whichever is not applicable. Certified that I have received the duplicate copy of this pass. Place................................ Date................................. Time................................ Signature of the Officer I/c Check Post (SEAL)." Now section 28 authorises the State Government to establish check posts and barriers, if it so desires, with a view to preventing evasion of tax or other dues payable under the Act in respect of sale of goods in the State of Uttar Pradesh. Section 28-B makes provision for the procedure to be followed by persons who intend to transport goods by roads into the State of Uttar Pradesh from places outside the State of Uttar Pradesh for the purpose of transporting them to places situated outside that State. It provides that when a vehicle coming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... islature has the power to make a law with respect to any subject it has all the ancillary and incidental powers to make the law effective. Taxation laws usually consist of three parts-charging provisions, machinery provisions, and provisions providing for recovery of the tax. We may refer here to the observations of Lord Dunedin in Whitney v. Commissioners of Inland Revenue (1925) 10 Tax Cas 88 at 110. The learned Lord said: "My Lords, I shall now permit myself a general observation. Once that it is fixed that there is liability, it is antecedently highly improbable that the statute should not go on to make that liability effective. A statute is designed to be workable and the interpretation thereof by a court should be to secure that object unless crucial omission or clear direction makes that end unattainable. Now, there are three stages in the imposition of a tax: there is the declaration of liability, that is the part of the statute which determines what persons in respect of what property are liable. Next, there is the assessment. Liability does not depend on assessment. That, ex hypothesi, has already been fixed. But assessment particularises the exact sum which a person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. It is seen that if the transit pass is not handed over to the officer-in-charge of the check post or barrier before his exit from the State, it shall be presumed that the goods carried thereby have been sold inside the State by the person-in-charge of the said goods. It is contended that the said rule virtually makes a person who has not actually sold the goods liable to pay sales tax and it is further argued that a transporter being just a transporter cannot be treated as a dealer within the meaning of that expression as it was defined in the Act at the time when section 28-B was introduced into the Act. The appellants contend that the words "it shall be presumed that the goods carried thereby have been sold within the State" in section 28-B of the Act as meaning that it shall be conclusively held that the goods carried thereby have been sold within the State to buttress their argument that a tax is being levied on a transaction which is not a sale at all under entry 54 of List II of the Seventh Schedule by introducing a legal fiction. This argument overlooks the essential difference between the two sets of words set out above. The meaning of these words would become clear if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general that the law itself, without the aid of a jury, infers the one fact from the proved existence of the other in the absence of all opposing evidence. In this mode, the law defines the nature and the amount of the evidence which is sufficient to establish a Prima facie case, and to throw the burden of proof upon the other party; and if no opposing evidence is offered, the jury are bound to find in favour of the presumption. A contrary verdict might be set aside as being against evidence. The rules in this class of presumptions as in the former, have been adopted by common consent from motives of public policy and for the promotion of the general good; yet not as in the former class forbidding all further evidence, but only dispensing with it till some proof is given on the other side to rebut the presumption raised.' " Having regard to the definition of the words "may presume", it is open to a court where they are used in its discretion either to draw a presumption referred to in a law or may not. The words "shall presume" require the court to draw a presumption accordingly, unless the fact is disproved. They contain a rule of rebuttable presumption. These words, i.e., "sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n whom the burden of proof lies. When presumption is conclusive, it obviates the production of any other evidence to dislodge the conclusion to be drawn on proof of certain facts. But when it is rebuttable it only points out the party on whom lies the duty of going forward with evidence on the fact presumed, and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed the purpose of presumption is over. Then the evidence will determine the true nature of the fact to be established. The rules of presumption are deduced from enlightened human knowledge and experience and are drawn from the connection, relation and coincidence of facts and circumstances. In Izhar Ahmed Khan v. Union of India [1962] Suppl. 3 SCR 235 at 257, Gajendragadkar, J.,(as he then was) explains the meaning of a rebuttable presumption thus: "It is conceded, and we think, rightly, that a rule prescribing a rebuttable presumption is a rule of evidence. It is necessary to analyse what the rule about the rebuttable presumption really means. A fact A which has relevance in the proof of fact B and inherently has some degree of probative or persuasive value in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to rely upon the rule of presumption in section 28-B of the Act. It is, therefore, not correct to say that a transaction which is proved to be not a sale is being subjected to sales tax. The authority concerned before levying sales tax arrives at the conclusion by a judicial process that the goods have been sold inside the State and in doing so relies upon the statutory rule of presumption contained in section 28-B of the Act which may be rebutted by the person against whom action is taken under section 28-B of the Act. When once a finding is recorded that a person has sold the goods which he had brought inside the State, then he would be a dealer even according to the definition of the word "dealer" as it stood from the very commencement of the Act subject to the other conditions prescribed in this behalf being fulfilled. A person who sells goods inside the State of Uttar Pradesh and fulfills the other conditions prescribed in that behalf is a dealer even as per amendments made in 1959, 1961, 1964, 1973 and 1978 to the said definition. There is, therefore, no substance in the contention that a transporter was being made liable for the first time after 1979 with retrospec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice of the learned counsel for the State of Uttar Pradesh he very fairly submitted on behalf of the Commissioner of Sale Tax thus: "Whereas it was observed by the Honourable Court in the course of the discussion that the presumption under section 28-B is a rebuttable presumption. Whereas it was pointed out that while the Commissioner of Sales Tax had issued a circular in 1985 to the effect that ways and means will be found to ensure that inter-State transporters who are not engaged in buying or selling of goods in the Uttar Pradesh are not unduly inconvenienced but the said circular was not extant when assessments were made in numerous pre 1985 cases. Whereas it was mentioned by the appellants and petitioners that it would be virtually impossible to produce the exit permits of pre 1979 assessments and that it would not be reasonable to treat them as dealers who had sold assessable goods in Uttar Pradesh. Now, therefore, the Commissioner of Sales Tax states as under: 1.. A large number of Civil Appeals have been preferred by way of Special Leave against the judgment and order of the Allahabad High Court dated 25-5-82 by which the Allahabad High Court was pleased to uph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law (i.e., by way of appeal or any other remedy provided under the Act). 7.. The revised assessment proceedings pursuant to this order may be completed within a period of 5 months from today. 8.. The assessing authorities will pass fresh orders of assessment in accordance with law uninfluenced by the previous orders which may have been made. 9.. It may be clarified that section 21 of the U.P. Sales Tax Act will not be a bar to the instant reassessments." On going through the above proposal we feel that it would meet the ends of justice if the cases of the appellants and petitioners are permitted to be dealt with accordingly. We give our approval to the said proposals and make an order accordingly. Any assessment made pursuant to the above orders shall not be open to question on the ground that it does not satisfy the period of limitation contained in section 21 of the Act. We also make it clear that any person who is aggrieved by the order of assessment may question it in appeal or revision as provided by the Act on all grounds except on the ground that it had been passed beyond time. We also direct that if any of the appellants or petitioners has, depending upon the penden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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