9911796707
TMI Blog1986 (5) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... pany carries on business all over India and also has office at Cochin. Inasmuch as M/s. New Gee Tee Carriers did not have a branch office at Bhagalpur, it engaged the petitioner-company with full knowledge and consent of the consignor to deliver the goods to the consignee at Bhagalpur in the State of Bihar. The petitioner hired a truck for carrying the goods from Cochin in the State of Kerala to Ichhapuram in the State of Andhra Pradesh. At Ichhapuram, the goods were transhipped to another truck hired by the petitionercompany for completing the remaining part of the journey to Bhagalpur. The drivers of the trucks hired by the petitioner-company were directed to travel from Ichhapuram to Bhagalpur via Jamshedpur which fall in the State of Bihar. If that route was followed, there would have been no question of any entry into the State of West Bengal. The case of the petitioner is that in disobedience of the specific instructions of the petitioner, the driver of the hired truck bearing police registration No. BRH 3902 attempted to take a short cut to Bhagalpur. It appears that the driver was trying to shorten the distance from Ichhapuram to Bhagalpur by 100 kms. by this process. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en annexed. Under the Kerala General Sales Tax Rules, form No. 26 in which the name of the dealer has been given as Singhal Brothers and the particulars of the goods to be mentioned have been clearly given. It has also been stated that the goods were to be consigned from Cochin to Bhagalpur. The name and address of the party at Bhagalpur were given as Govind Traders, Station Road, Bhagalpur, C.S.T. No. 1846(C). This document appears to have been stamped and cleared at various check posts including the check posts at Andhra Pradesh and Orissa. Another important factor to be noted in this case is that the consignment had to be delivered to or to the order of the Punjab National Bank at Bhagalpur whose name was mentioned in the lorry receipt. It was stated that the consignment will "under no circumstances be delivered to any one without any written authority from the consignee bank or its orders endorsed on the consignee copy or on a separate letter of authority". In the consignment note, there was an endorsement that "It is intended to use the consignee copy of this set for the purpose of borrowing from the consignee bank" and the name of Punjab National Bank was given as the consig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 4A and section 4B have been enacted to prevent evasion of tax. Section 4A deals with evasion of tax by unregistered dealer. Under this section, the State Government may notify that every dealer who imports into West Bengal or manufactures or produces notified goods for sale shall be liable to pay tax on all sales of such notified goods other than those referred to in section 6D. Section 4B is important for the present case and is as under: "4B. Restriction to prevent evasion.-(1) No person shall transport from any railway station, steamer station, airport, post office or any other place whether of similar nature or otherwise, notified in this behalf by the State Government, any consignment of any notified goods exceeding such quantities and except in accordance with such conditions as may be prescribed. Such conditions shall be made with a view to ensuring that there is no evasion of tax imposed by this Act. (2) The State Government may prescribe conditions for regulating transport of notified goods from any place, other than those referred to in sub-section (1), with a view to ensuring that there is no evasion of tax imposed by this Act." The conditions under which goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) deals with consignment despatched from a place within West Bengal and is not necessary to be considered for the purpose of the present case. It will appear from rule 89A(1) that the requirement of taking permit is confined to registered or certified dealers. Under clause (a), only a registered or a certified dealer can bring a consignment in excess of the limit from any place outside West Bengal specified under rule 89(2). Under clause (b) the registered or certified dealer has to make an application in form XXX for a permit and the appropriate Commercial Tax Officer, if he is satisfied, can issue a permit in form XXX-A. Under clause (c) the permit referred to in clause (b) has to be produced by any person transporting any consignment of notified goods on demand by a duly authorised Officer. On behalf of the petitioners, it was argued that there was nothing in rule 89 or rule 89A which required a person who was not a registered or a certified dealer to take a permit for transportation of goods from a place outside West Bengal into the State or through the State of West Bengal. Similarly, rule 90 which enables the State Government to notify various places for the purpose of regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods across or beyond the notified area. It was, therefore, argued that although rule 89 provides that no person, other than a registered or certified dealer, shall transport any consignment of notified goods from any place outside West Bengal "except in the manner prescribed hereunder", there is nothing in the rules which prescribe the manner in which the notified goods can be transported from a place outside West Bengal by a person who is not a registered or a certified dealer. On behalf of the State, my attention was drawn to rule 91 which provides as follows: "91. Notwithstanding anything contained in rules 89 and 90, the Commissioner or any officer appointed under section 3 to assist him, who has been authorised by the Commissioner in that behalf, may, for good and sufficient reason to be recorded in writing, authorise any person or Organisation or philanthropic and charitable institutions or diplomatic personnel to transport any consignment of notified goods exceeding the quantity prescribed in sub-rule (2) of rule 89 from any railway station, steamer station, air port in West Bengal or any other place notified under section 4B or across or beyond the area of a notified pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngal Finance (Sales Tax) Act. In both the sections it has been specifically stated that "such condition s shall be made with a view to ensuring that there is no evasion of tax imposed by this Act". Neither section 6 of the Act of 1954 nor section 4B of the Act of 1941 seek to place a complete bar on movement of goods into or across the State of West Bengal. If such restrictions were imposed, it would have been unconstitutional. That is why it has been laid down in both the sections that no person shall transport any consignment of goods "except in accordance with such conditions as may be prescribed". In this case, I have not been shown any condition which has been prescribed for a case like this where goods are being transported from Kerala to Bihar through West Bengal by a person who is not a dealer or a certified dealer. Rule 14 of the West Bengal Sales Tax Rules, 1954, prohibits any person other than a registered dealer from transporting goods notified under section 6 of the Act of 1954. Rule 14A and rule 14B make special provisions for diplomatic personnel and also employees of certain organisations like United Nations, World Health Organisation, etc. Similarly, rule 14C makes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds are being brought from some other State by a person who is not a registered or a certified dealer. In the absence of such a rule, the petitioner cannot be charged with infraction of the rule. Moreover, if the rules are construed to mean that no person except a registered or a certified dealer can transport notified goods in excess of the notified limit into or across West Bengal, it will amount to unreasonable restriction on a person's rights guaranteed under article 19 of the Constitution as well as the provisions of article 301 of the Constitution. In fact, the State Government has not made a case that the petitioner not being a registered or a certified dealer cannot bring goods into West Bengal or carry goods across West Bengal at all. On the contrary, the case of the State Government is that the petitioner must have a permit for bringing the goods into the State of West Bengal. Rule 89A which specifically requires permit to be taken for despatch of goods in excess of the notified quantity from outside the State of West Bengal by any road vehicle is limited to registered or certified dealers. It is clearly stated in clause (a) that every such consignment can be transported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1954, can only be exercised in respect of levy, collection and recovery of intrastate sales or purchase tax. Such powers could not be utilised for the purpose of ensuring the effective levy of inter-State sales or purchase tax. In fact, there is close resemblance between the case before us and the case of Hansraj Bagrecha [1971] 27 STC 4 (SC) which was decided under the Bihar Sales Tax Act, 1959. Section 42 of the Bihar Sales Tax Act provided that no person "shall transport from any railway station or any other place notified in this behalf by the State Government, any consignment of such goods, exceeding such quantity, as may be specified except in accordance with such conditions as may be prescribed and such conditions shall be made with a view to ensuring that there is no evasion of tax payable under this Act". Rule 31B framed to the effect that no person shall tender at any railway station, etc., any consignment of such goods to any place outside the State of Bihar unless such person had obtained a despatch permit from the appropriate authority. This rule was challenged in that case. The Supreme Court observed at page 12: "The power of the State Legislature is restri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invalid. The Supreme Court observed at pages 3-4 as under: "Entry 54 of List II of the Seventh Schedule to the Constitution authorises the State Legislature to legislate in respect of taxes on the sale or purchase of goods. A legislative entry does not merely enunciate powers: it specifies a field of legislation and the widest import and significance should be attached to it. Power to legislate on a specified topic includes power to legislate in respect of matters which may fairly and reasonably be said to be comprehended therein: see United Provinces v. Mst. Atiqa Begum [1940] FCR 110, Navinchandra Mafatlal v. Commissioner of Income-tax, Bombay City [1954] 26 ITR 758 (SC) and Balaji v. Income-tax Officer, Special Investigation Circle [1961] 43 ITR 393 (SC). A taxing entry therefore confers power upon the Legislature to legislate for matters ancillary or incidental including provisions for preventing evasion of tax. Sub-sections (1) and (2) of section 42 are intended to set up machinery for preventing evasion of sales tax. But, in our judgment, the power to confiscate goods carried in a vehicle cannot be said to be fairly and reasonably comprehended in the power to legislate in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Bengal (Finance) Sales Tax Act or under the West Bengal Sales Tax Act. There is no prescribed form also for application for such permits or grant of such permits. I also uphold the contention that the statute cannot be construed in a way that will give the State a right to impose restriction on inter-State carriage of goods which are not meant to be sold within the State. The State Legislature has no power to legislate imposing restriction on movement of goods in the course of inter-State transaction or any ancillary matters thereto on the assumption that the goods are meant to be sold within the State. The writ petition, therefore, must succeed. There will be an order in terms of prayer (a) of the petition. There will also be an order directing the respondents to release the vehicle No. BRH 3902 along with all the seized goods forthwith. The proceedings for penalty were commenced against the petitioner and penalty was levied both on Govind Traders and also on East India Transport Association under the provisions of the Bengal Finance (Sales Tax) Act, 1941, and the West Bengal Sales Tax Act, 1954. Those proceedings and the orders passed therein on 3rd December, 1985, are also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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