9911796707
TMI Blog1990 (9) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... aklat Place, Calcutta-71 and the petitioner-company has its branch offices at 40, S.B. Gorai Road, Asansol as well as P-17, Mission Row Extension, Calcutta-13. Petitioner No. 1 company, inter alia, carries on business of purchasing different television sets from different manufacturers and selling them to its dealers and stockists. The petitioner No. 1 company has started its business only from July 17, 1985, for the first time and the petitioner No. 2 is one of the directors and shareholders of the petitioner No. 1 company. According to the petitioner No. 1 company, for the purpose of business as aforesaid, the petitioner No. 1 company had to purchase television sets from different manufacturers from different parts of India. The said television sets are transported by the said manufacturers by road or by railways, as the case may be. In case of transportation, being made by railways, petitioner No. 1 company in its turn has to release the consignments from the railway station, namely, Howrah station and in case of transportation being made by road, the petitioner-company has to release the same from the Duburdih Check-post, Asansol. "Television sets" have been declared by the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed authority or any other officer who may be authorised by the State Government in this behalf may, for the purpose of verifying whether notified commodities are being or have been transported in contravention of the provisions of section 6 and subject to such restrictions as may be prescribed,- (i)(a) intercept, detain and search at any place notified under section 6 or at any other place any road vehicle, or river craft or any load carried by a person, or (b) search at any godown, warehouse or any other place in which according to his information such notified commodities transported in contravention of the provisions of section 6 have been stored; and (ii) seize any notified commodities referred to in section 6- (a) which, in the case referred to in sub-clause (a) of clause (i), he has reasons to believe are being transported in contravention of the provisions of section 6, together with any container or other materials for the packing of such notified commodities, or (b) together with any container or other materials for the packing of such notified commodities in the case referred to in sub-clause (b) of clause (i), where the prescribed authority or any other offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and subject to such restrictions and conditions as may be prescribed, sell the notified commodities seized under clause (ii) of sub-section (1) in open auction and remit the sale proceeds thereof to a Government treasury. (6) Notwithstanding anything contained in sub-section (4), the appellate or revisional authority, pending final disposal of an appeal or application for revision against an order for imposition of penalty under sub-section (2), or the prescribed authority, for reasons to be recorded in writing, may direct release of the notified commodities seized under clause (ii) of sub-section (1) on such terms and conditions as he may consider fit and proper. (7) Notwithstanding anything contained in sub-section (2) or subsection (5) the prescribed authority may, subject to such rules as may be made under this Act, where the notified commodities seized under clause (ii) of sub-section (1) are- (a) of perishable nature, or (b) required to be used by a specified date, sell such commodities in open auction after the expiry of such period as he may consider fit and proper, if he is of opinion that such commodities may become unusable or unsaleable on detention, or destroy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transports, or on whose behalf any such consignment is being transported, shall make an application in form IV in triplicate to the appropriate Commercial Tax Officer or Inspector for a permit giving the particulars detailed in rule 14, sub-rule (ii), clauses (a) to (d). The appropriate Commercial Tax Officer or Inspector, if he is satisfied with regard to the bona fides of the application, shall issue a permit in form IVA in triplicate, two copies of which shall be made over to the applicant, the third copy being retained as an office copy. (c) Any person transporting any such consignment of cigarettes or of a notified commodity across or beyond the notified area of a check-post shall produce the copies of the permit in respect of that consignment before the officer-in-charge of the check-post, and the said officer shall only allow the movement of such quantities of cigarettes or of the notified commodity mentioned in the aforesaid permit and conforming to the description given therein. He shall retain one copy of the permit and return the second copy on which he shall endorse the date on which the consignment was transported and shall sign, seal and date such endorsement." "1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdih Checkpost demanded from the petitioner-company's transport agent the "road permit" in form No. IVA obtainable under rule 15 of the said Rules of 1954, which could not be produced by the transport agent, as according to the petitioners the transport agent had no means to produce such "road permit" which could only be obtained from the Commercial Tax Officer, Chandni Chawk Charge, 15 Beliaghata Road, Calcutta. According to the petitioners, the transport man, i.e., the driver of the truck, reported the same immediately to the petitioner-company's branch office at Asansol. The branch office employees being Mr. Goutam Gorai and Mr. Ramayana Singh immediately saw the said Commercial Tax Officer and requested him to grant reasonable time and direct the Inspector at the check-post not to seize the goods, considering the territorial distance from Asansol to Beliaghata Main Road where the said permit in form No. IVA was to be obtained. The said respondent No. 3 did not consider the said request of the writ petitioners and seized 40 television sets out of 143 television sets. Copy of the seizure list has been annexed as annexure "A" to the writ petition. Further, according to the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Advocate for the sales tax authorities, upon the petitioners furnishing security by way of bank guarantee to the satisfaction of the respondent No. 6 for a sum of Rs. 97,000 which has been furnished by the writ petitioners for return of the television sets. This writ petition has come up for final hearing before me on June 12, 1989 and hearing was concluded on July 3, 1990, and judgment was reserved. Mr. Sanjoy Bhattacharya, learned Advocate appearing for the petitioners, submitted the following facts for consideration of this Court. Section 6 of the said Act imposes restriction on movement, if any person transports from any railway station, steamer station, airport, post office and any other place whether of similar nature or otherwise, "notified goods". According to Mr. Bhattacharya, rules 14, 15 and 15A, quoted as aforesaid, have made it clear that a registered dealer shall, before transporting from any railway station, steamer station, airport, post office in West Bengal notified under section 6 any consignment of cigarettes or any "notified commodities" as the case may be despatched from any place outside West Bengal, produce for counter signature before the appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... television sets at about 5 p.m. on October 22, 1985. On the said date, i.e., on October 22, 1985, the lorry was intercepted at about 8.35 a.m. but as the lorry driver could not produce any permit up to 5 p.m. when only 40 television sets were seized. The invoice value of 143 television sets were given in the penalty proceeding at Rs. 3,19,789.22 and according to Mr. Bhattacharya the Commercial Tax Officer in imposing penalty, was entitled to take into consideration the notional value of 40 television sets, instead of 143 television sets for which, no relevant permit, could be produced before Inspector or Commercial Tax Officer, Duburdih Check-post. According to Mr. Bhattacharya, admittedly no permit could be produced on October 22, 1985, in respect of the notified commodities (television sets) which were transported through Duburdih Check-post, but on November 2, 1985, the learned Advocate, Mr. Souren Mitra, appeared pursuant to the service of show cause notice and the penalty proceeding was heard, but the Commercial Tax Officer, Duburdih Check-post, estimated the profit and freight upon the invoice value of Rs. 3,19,789.22 in respect of the value of the entire 143 television s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in-opposition, which could go to show that contravention as alleged, has been committed by the petitioners. Reasons to believe, must not be pretended reasons, but must be bona fide reasons. In support of these reasons, Mr. Bhattacharya placed, reliance on the judgment of the Supreme Court in the case of the Check Post Officer v. K.P. Abdulla and Bros. reported in [1971] 27 STC 1. In the said case the Honourable Supreme Court struck down a similar power provided under section 42(3) of the Madras General Sales Tax Act, 1959, as ultra vires, the provision of entry 54 of List II of the Seventh Schedule of the Constitution. Section 42(3) of the said Madras General Sales Tax Act, 1959, is as follows: 42(3) The officer-in-charge of the check-post or barrier, or the officer empowered as aforesaid shall have power to seize and confiscate any goods which are under transport by any vehicle or boat and are not covered by, (i) a bill of sale or delivery note, (ii) a goods vehicle record, a trip sheet or a log book, as the case may be, and (iii) such other documents as may be prescribed under sections 43 and 44: Provided that before ordering confiscation the officer shall give th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainer or any other material, which onus the respondent No. 5 had not discharged. According to Mr. Bhattacharya, the penalty for Rs. 97,000 was arbitrarily determined on the basis of the estimated gross profit at the rate of 20 per cent thereon and imposed the maximum penalty of 25 per cent in respect of 143 television sets, although 40 television sets have been seized which was the highest limit fixed under the law. In concluding his submissions, Mr. Bhattacharya submitted that entire seizure, notice and the, penalty proceeding were conducted with closed mind and without recording any satisfaction that the petitioner had crossed the notified area, without "road permit". According to Mr. Bhattacharya, therefore, firstly this Court has to decide whether seizure was made without jurisdiction, as there was no reason to believe duly recorded by the officer concerned. Secondly, the condition precedent for exercising authority being not present, exercise of jurisdiction was not permitted. Thirdly, no ingredient of the offence has been recorded in the order imposing penalty by order dated November 2, 1985, and no opportunity was given. The authority has not also taken into considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommencing from January 5, 1957, as if the section also provided that all provisions relating to penalties of the general sales tax law of each State, with necessary modifications applied in relation to the assessment, reassessment, collection and enforcement of payment of any tax required to be collected under the Central Sales Tax Act. The petitioners filed writ petition in the Supreme Court challenging the validity of sub-section (2A) inserted in section 9 of the Central Sales Tax Act and the validating provisions contained in section 9 of the amending Act of 1976 on the following grounds: (1) that the introduction of sub-section (2A) did not have the effect of making the provisions relating to penalties leviable under the general sales tax laws of the States applicable to the proceedings under the Act; (2) that Parliament could not adopt the provisions relating to penalties in the general sales tax laws of the States for enforcing the charge under the Act, as such a course would amount to an abdication of its essential legislative function by Parliament; (3) that the provision giving retrospective effect to sub-section (2A) and the provision validating all the penalties levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The impugned seizure of television sets as per annexure "A" as well as imposition of penalty made by the Commercial Tax Officer, Asansol charge, Duburdih Check-post, Duburdih, by order dated November 2, 1985, are accordingly set aside by issue of writ in the nature of certiorari. The writ petitioners are accordingly discharged from the bank guarantee. There will be no order as to costs. C.R. No. 18060 (W) of 1985 The points raised in the present writ petition being C.R. No. 18060 (W) of 1985 (Positive Commercial Co. Ltd. and another v. State of West Bengal and others) being identical to those in Civil Rule No. 18061 (W) of 1985 (Positive Commercial Co. Ltd. and another v. State of West Bengal and others) which has been allowed today, this writ petition is also entitled to succeed, in terms of the judgment delivered today, in Civil Rule No. 18061 (W) of 1985 (Positive Commercial Co. Ltd. and another v. State of West Bengal and others). Accordingly, the impugned seizure made on November 7, 1985, by the Inspector, Commercial Tax, Duburdih Check-post, Duburdih, being respondent No. 5, and the penalty imposed by the Commercial Tax Officer, Asansol charge, being respondent No. 3 for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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