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TMI Blog1991 (1) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... ore as noted by the Check Post Officer. By referring to the records the appellate authority found that the said goods were ordered by a Madras partyM/s. Unique Automobiles, from the Delhi seller-M/s. Shyam Motor Stores. The relevant letters were referred by the appellate authority. Consequently, the appellate authority held that there was no attempt to evade the tax and that the goods were moving from Delhi to Madras via Bangalore. The Commissioner of Commercial Taxes, however, issued a notice under section 22-A of the Act proposing to revise the order of the Assistant Commissioner of Commercial Taxes on the ground that the same was prejudicial to the interest of the Revenue and was erroneous. In the notice the Commissioner stated that in the haulage contract note produced by the driver of the vehicle 357 articles were shown as destined from Delhi to Bangalore, which did not show the full name and address of the consignee with registration certificate numbers and according to the Commissioner obviously it was noticed that the consignment of 55 bundles of iron springs covered by haulage contract note No. 62509 was being transported without bills. Ultimately the basis of the notice w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and keep it stationary as long as may be required by the Officer-in-charge of the check post or barrier or the Officer empowered as aforesaid, to examine the contents in the vehicle or boat and inspect all records relating to the goods carried, which are in the possession of such driver or other person in charge, who shall, if so required, give his name and address and the name and address of the owner of the vehicle or boat. Explanation.-For purposes of sub-sections (2) and (3), the Officer-incharge of check post or barrier shall be an Officer not below the rank of an Assistant Commercial Tax Officer and not higher in rank than an Assistant Commissioner of Commercial Taxes, and any other Officer not below the rank of a Commercial Tax Inspector as may be empowered by the Commissioner. (3A) ................................................ (4) The Officer-in-charge of a check post or a barrier or any other Officer not below the rank of an Assistant Commercial Tax Officer and not higher in rank than an Assistant Commissioner of Commercial Taxes may, in respect of any contravention of or non-compliance with the provisions of sub-section (2) or (3) or (3A) and for which sufficient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act paper is No. 62503 referred above; along with this other papers were there up to haulage contract No. 62509. The list refers to the 55 bundles of iron springs with the destination as Madras (MDR) weighing 2,138 kgs. The G.C. Note is given as No. 166451. The corresponding way bill pertaining to these 55 bundles of springs refers to the No. 166451 and *Here italicised. furnishes the address of delivery office at Madras and the consignor's name as M/s. Shyam Motor Stores, Delhi and consignee as M/s. Unique Automobiles, Madras. In the course of argument this was also referred as G.C. Note. Thus, on the face of it, it is clear that the goods in question were to be transported to Madras from Delhi via Bangalore. It is obvious that the goods vehicle was carrying the goods of various descriptions to be sent to several places and the practice seems to be that at Bangalore the goods will be again loaded into different vehicles to transport them to the places of destination. In a transport business this is not at all unusual. In addition to these, the appellant produced two letters before the appellate authority as referred by the said authority pointing out that these goods in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich affect transport or movement of goods to any place outside the State of Bihar. In this context at page 11 the Supreme Court held: 'The State Legislature is competent in enacting sales tax legislation to make a provision which is ancillary or incidental to any provision relating to levy, collection and recovery of sales tax and purchase tax. A provision which is made by the Act or by the Rules which seeks to prevent evasion of liability to pay intrastate sales or purchase tax would therefore be within the competence of the Legislature or the authority competent to make the rules. But the State Legislature has no power to legislate for the levy of tax on transactions which are carried on in the course of inter-State trade or commerce or in the course of export. Section 42 of the Bihar Sales Tax Act, 1959, prevents any person from transporting from any railway station, steamer station, airport, post-office or any other place any consignment of such goods exceeding the quantity specified with a view to ensuring that there is no evasion of tax payable under the Act. But the power under section 42 can only be exercised in respect of levy, collection and recovery of intrastate sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i), (ii) and (iii) of sub-section (3) of section 42, stands in danger of having his goods forfeited. Power under sub-section (3) of section 42 cannot be said to be ancillary or incidental to the power to legislate for levy of sales tax." In Sree Hajee Ahmed Bava v. Assistant Commercial Tax Officer [1985] 60 STC 328, a Bench of this Court had to consider the validity of some of the provisions of section 28-A of the Act. These provisions were upheld by this Court on the ground that goods were not to be confiscated unlike in the Madras Act and that penalty was to be imposed by the Checking Officer only if the person concerned fails to give sufficient cause for not producing the documents. At page 340 the Bench held: "In our view the power to levy penalty has taken the place of power to seize and confiscate, as prescribed under sub-sections (4), (5) and (6) before their substitution, and there is substantial change in the procedure and other provisions relating to the levy of penalty under the substituted provisions and they do not suffer from the same vice for which the Supreme Court declared similar provisions of the. Madras Act as unconstitutional. The substituted provisions p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of section 28-A is not to collect revenue by the imposition of penalties. Section 28-A is not a charging provision at all. It is only a machinery provision. Secondly, penalties are levied under section 28-A(4), inter alia, for noncompliance with the provisions of sub-section (2) and the penalty shall not exceed the limits specified in sub-section (5). However, before levying the penalty the person in charge of the goods vehicle should be given a reasonable opportunity of being heard. Levy of penalty also may be for furnishing a false declaration under sub-section (2). The entire power is to effectuate a particular purpose that is to prevent evasion of tax payable under the Act. 9.. In the instant case, the Check Post Officer himself gave 24 hours' time to the driver to produce the documents. The documents produced by the driver read with the other documents produced before the appellate authority show that the goods were moving from Delhi to Madras via Bangalore. This apart, the appellate authority has given a specific finding that the papers produced by the driver and referred in the show cause notice issued to the driver clearly establish that 55 bundles of springs were co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the law is always to be within the bounds of the constitutional limitations governing the subject-matter of legislation and, therefore, any executive order under the State law cannot traverse beyond the said content. 12.. The impugned order in the instant case suffers from two patent infirmities: (i) The penalty has been imposed only because the driver failed to produce the prescribed documents immediately on demand and production of the document subsequently will be of no avail. This is reading the relevant provisions technically and not with reference to the object of the provisions. (ii) The maximum penalty has been imposed as provided under section 28-A(5) without considering the explanation offered in any manner and while imposing such a penalty the Check Post Officer as well as the Commissioner seem to have assumed that the maximum penalty has to be imposed as a matter of course. This itself makes the order arbitrary. There has been no judicial approach to the facts of the case while exercising the discretionary power. 13.. It was also contended on behalf of the appellant that this was not a case of payment of a tax under the Act and, therefore, question of "re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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