Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

1986 (3) TMI 307

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... he tune of 40 per cent of the value of the goods seized for its release. The petitioner's contention was that the said order is bad as there was no sale made by the petitioner within the State of U.P. and as it was meant for export outside India, the seizure itself is illegal and demand of security to the tune of 40 per cent is also bad on that account. The learned counsel for the petitioner vehemently urged that unless there was sale made by the petitioner the power of seizure cannot be exercised by the respondents. It was further contended that the aforesaid goods were brought in the State of U.P. only for storage purposes and it was not for any business. Section 28-A has been reframed by U.P. Act No. 33 of 1979, which would be relevant for the purposes of the present case. Section 28-A (1) of the Act uses the words "Any person (hereinafter in this section referred to as the importer) who intends to bring, import or otherwise receive, into the State from any place without the State, any goods liable to tax under this Act...in connection with the business, shall obtain the prescribed form of declaration on payment of the prescribed fee from the assessing authority having juris .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... they purchased large number of timber in an auction held by the Forest Department of Madhya Pradesh and some parts of the said timber were transferred to U.P. and the remaining were sold in Madhya Pradesh. The assessing authority held not only what was sold in the Madhya Pradesh but what was transferred by the assessee to the State of U.P. amounted to sale. It was on these facts the Supreme Court held that merely transfer of goods by the owner from one place to another cannot amount to sale under the provisions of the Madhya Pradesh Sales Tax Act. In that case, it was the assessment proceedings under which it was held not to be sale. The facts in this case are entirely different. Here the question whether there was sale or not is not relevant at the stage of seizure. If a person merely transfers or transports goods with a view to evade tax where such goods are likely to be taxed under the Act the power of seizure has been provided. This provision empowers the Revenue to check all possible evasions. When section uses the words "likely to be taxed", this itself conceived of stage prior to the sale. When sale actually takes place then question of likely to be due could not be there. .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ort or otherwise receive such goods otherwise than in connection with business, he may, at his option, in the like manner obtain the prescribed form of certificate." Under this, it has been clearly provided that even for such goods which has been received otherwise than in connection with business, he may obtain the prescribed form of certificate. Similarly, sub-section (1) of the aforesaid section also makes it clear that where any person intends to bring, import or otherwise receive into the State from any place without the State any goods referred to in sub-section (1) otherwise than in connection with business and obtains the prescribed form of certificate, the provisions of sub-sections (2), (3) and (4) were made applicable. Thus, section 28-A covers both cases, viz., brought into State in connection with business and otherwise than in connection with business. Learned counsel then made an application during the course of the hearing of this case for amending the writ petition, which is not objected to by the respondents, which in fact, were additions of grounds and the prayer, by virtue of which it challenged the provisions of section 28-A, U.P. Sales Tax Act, as ultra vire .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... vides that in a case referred to in clause (o), a sum not exceeding 40 per cent of the value of the goods involved is the likely penalty which should be imposed by the authority finally deciding the matter. It is in the background of this setting of the various provisions of the Act that the demand of security is ordered and we are of the view that in case if it is finally found that penalty is imposable then the demand of security to the tune of 40 per cent of the value of the goods could not be said to be arbitrary. Therefore, even this contention of the petitioner is devoid of any merit. The argument was also made by the learned counsel for the petitioner that the order dated 21st December, 1985 (annexure 7 to the counter-affidavit), passed under section 13-A(6) of the Act does not give sufficient reasons for demanding such a security. We have perused the said order. Even on merits it cannot be said that the order is such which calls for any interference in the present proceedings under article 226 of the Constitution. The said order gives very cogent reasons before recording the finding that the explanation submitted by the petitioner was not found to be satisfactory. It was .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates