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TMI Blog1996 (2) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioner is a company registered under the Companies Act engaged in the business of transportation of goods on behalf of the customers throughout the country. The second petitioner is the joint managing director of the petitionercompany. The petitioner-company is not engaged in business of sales and supply of goods. A Bill, namely, Assam General Sales Tax Bill, 1993, was passed in the Assam Legislative Assembly and the Bill received the assent of the Governor on May 14, 1993 and became an Act (Assam Act No. 12 of 1993), for short, "the Act, 1993". This Act has repealed all the earlier four Sales Tax Acts. 4.. Under section 42 of the Act, it is an obligation on every clearing, booking or forwarding agent or any other person transporting goods who during the course of his business handles documents of title to the goods for or on behalf of any dealer or person holding certificate under section 14 to furnish to the prescribed authority true and complete particulars and information and to maintain true and complete accounts, registers, documents, etc. The said section also provides for levy of penalty at the rate of three times of tax calculated on the value of the goods in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o produce certain documents before the 3rd respondent on September 4, 1993, for the purpose of verification of accounts and documents seized on August 9, 1993. The 3rd respondent directed the 2nd petitioner to produce various accounts and documents such as, cash book, ledger, register of vehicles, money receipts, records of delivery, etc., starting from 1991-92 to 1992-93 up to August 8, 1993, as per annexure II notice. 5.. The petitioners being aggrieved at the action of the respondents specially annexure II notice directing the petitioners to produce the books of accounts for the period from 1991-92 to 1992-93 up to August 8, 1993, have approached this Court by filing the present petitions. 6.. No affidavit-in-opposition has been filed in these cases. 7.. Heard both sides. 8.. Mr. J.P. Bhattacharjee, learned counsel for the petitioners, submitted that the transporters like that of petitioner-company were not involved in any sale or purchase of any goods. They only performed the job of transportation of goods in and outside the State of Assam and, therefore, the State Legislature had no authority and jurisdiction to enact any law in exercise of the power conferred under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also submitted that the transportation being a part of the business, can be termed as ancillary to the business and in that view of the matter the authority had jurisdiction to issue the annexure II notices. 10.. On the contentions of the learned counsel for the parties the following questions require consideration: (1) Whether the provisions contained in section 42 requiring the transporters to furnish to the prescribed authority true and complete particulars and information and to maintain true and complete accounts, registers and documents in respect thereof and provisions contained in section 44 empowering the appointed authority to search any office, godown, etc., of transporters and seize any goods found therein can sustain in law. (2) If so, whether the authority can direct a transporter to comply with the requirements of section 42 for period prior to the enactment coming into force. 11.. The Assam General Sales Tax Act, 1993, came into force on July 1, 1993 and under section 74 of the said Act, the Assam Sales Tax Act, 1946, the Assam Finance (Sales Tax) Act, 1956, the Assam (Sales of Petroleum and Petroleum Products including Motor Spirit and Lubricants) Taxatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the liability of payment of tax by a dealer under the repealed laws as mentioned above. 13.. Section 40 of the Act provides for maintenance of accounts by a dealer and section 41 for preservation of books of accounts, documents and all declarations and other documents. Section 42 emphasises an obligation for furnishing information by clearing, booking or forwarding agent or any other person transporting goods who during the course of his business handles documents of title to goods for or on behalf of any dealer or a person holding certificate under section 14. I quote section 42: "42. Furnishing of information by clearing and forwarding agent, etc. (1) Every clearing, booking or forwarding agent or any other person transporting goods who during the course of his business handles documents of title to goods for or on behalf of any dealer or a person holding certificate under section 14 shall furnish to the prescribed authority true and complete particulars and information and shall maintain true and complete accounts, registers and documents in respect thereof, and if the prescribed authority considers that such accounts, registers and documents are not sufficiently clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of any dealer for a fee, reward, commission, remuneration or other valuable consideration or otherwise; (ii) 'person transporting goods' shall, besides the owner, include the manager, agent, driver, employee of the owner, or person in-charge of a place of loading or unloading of goods other than a railhead, or a post office, or of a goods carrier carrying such goods, or a person who accepts consignments of such goods for despatch to other places or gives delivery of any consignment of such goods to the consignee." 14.. Section 44(3) of the Act empowers any authority appointed under subsection (1) of section 3 to seize accounts, registers or documents of the dealer or the clearing or forwarding agent or the person transporting goods or the owner of a warehouse or godown as may be, if the authority suspects evasion of payment of tax. Sub-section (5) empowers the said authority to enter into and search any office, shop, godown, etc., or any other place of business or any building or any place of the dealer, or of a dalal or of an owner of a warehouse, or of a clearing, booking or forwarding agent, or of a person transporting goods or vessels or goods carrier and seize any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per accounting of goods, impose a penalty, after giving an opportunity of being heard in the prescribed manner to the dealer or such person which shall be equal to three times the amount of tax calculated on the value of such goods and the goods shall be released as soon as the penalty is paid. (c) If the dealer or the person in-charge of goods as mentioned in clause (a) demands time for production of necessary documents in support of proper accounting, the authority referred to in clause (a) shall release the goods on the condition that the dealer or such a person deposits a security equivalent to three times the amount of tax calculated on the value of the goods. (d) If penalty imposed under clause (b) is not paid forthwith or no security is furnished as provided in clause (c) or the goods are not claimed by any person, the authority referred to in clause (a) shall arrange for the safe custody of the goods. (e) In case the penalty imposed under clause (b) is not paid or the goods remain unclaimed for a period of fifteen days from the date of seizure, the goods so seized shall be sold by auction in the prescribed manner and the sale proceeds shall be appropriated towards the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In other words it includes all the activities relating to sale. Therefore, if a law in its pith and substance relate to taxation on sale of goods, the State Legislature is competent to make such law under the aforesaid entry 54, List II. 16.. Now the point requires for determination in the present case is whether the transporter who carries goods from one place to another for reward can be said to be engaged in the activities of sale. No doubt, as per section 4 of the Sale of Goods Act only the owner or authorised person can transfer the title of the property or goods to another person for consideration. Therefore, in order to make a sale, the person must have the title to the property or a person who is having an authority on behalf of the person having title and this must be for a valuable consideration. A dealer within the meaning of section 2(10) is no doubt the owner of the property and can make transfer of the property by way of sale on receipt of consideration. Now, the question is does it include a transporting agency? Normally the transporter simply carries the goods. At no point of time a transporter becomes the owner of the goods. Therefore, a transporter does not come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd bad in law. Consequently, all rules and forms in the said Rules related to the said section 38 must also be held to be bad in law." 17.. Following the decision of the apex Court in the State of Haryana v. Sant Lal [1993] 91 STC 321, I am of opinion that the provisions contained in sections 42 and 44 relating to the obligation of the transporters to furnish information (section 42) and also the search and seizure in connection with the goods transported by the transporters are beyond the purview of the State Legislature. Therefore, the provisions contained in the said sections 42 and 44 must be held ultra vires and bad in law. 18.. The second submission of Mr. Bhattacharjee was that the notice issued directing the petitioner-company to furnish documents prior to July 1, 1993 was illegal inasmuch as the provisions contained in sections 42 and 44 were for the first time brought in the statute book by the said Act with effect from July 1, 1993 and, therefore, the authority had no jurisdiction to demand books of accounts, etc., even if the provisions contained in sections 42 and 44 in respect of transporters were held to be valid. 19.. The present Assam General Sales Tax Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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