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TMI Blog1995 (4) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the meaning of clause (1a-1) of section 2 of the 1941 Act. In RN-170 of 1993 and RN-124 of 1994, the other questions awaiting decision are (a) whether taxing authorities can levy and collect advance tax at the check-posts merely by oral order without giving anything in writing in form VID, (b) whether vehicles transporting bamboosplits into West Bengal can at all be detained at the check-posts, (c) whether collection of such advance tax from applicants through so-called guarantors is valid, (d) whether bamboo-splits are exempt from tax under item 81 of the First Schedule to 1941 Act, (e) whether assessments under rule 48M(1) must immediately follow collection of advance tax under rule 48M(3) so that refund can be made and (f) whether amounts collected as advance tax from applicants should be refunded. 3.. In RN-148 of 1993 the other questions raised are-(i) whether provisions of sections 2(1a-1), 4C and 4D of the 1941 Act and rules 48L and 48M of the 1941 Rules in so far as they are applied to transporters with effect from April 15, 1993, are valid, constitutional and within the legislative competence of the State, (ii) whether Trade Circular No. 3/93 dated April 20, 1993 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equired to pay tax which cannot be passed on to the owners of the goods transported. Thus, sections 2(1a-1), 4C and 4D are alleged to be unfair, unworkable, arbitrary and violative of articles 14 and 19(1)(g) of the Constitution. After mentioning the provisions of the abovementioned sections of the 1941 Act and rules 48L and 48M of the 1941 Rules and also the Trade Circular No. 3/93 dated April 20, 1993, it is stated that members of the association, being transporters, can in no circumstance be treated as casual traders, since all of them have fixed and bona fide places of business, and respondents are free to make enquiries, if necessary, from consignors or consignees. Under the existing provisions, a transporter can be held liable to pay tax as a casual trader, only when he fails to identify the consignee or the consignor or to furnish correct particulars about them. If these conditions are fulfilled, no transporter can be harassed or detained by the respondents. But, for some time past, respondents working in Siliguri region, have been harassing members of the association without appreciating the true import of the relevant provisions which do not require that both consignor and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment are given in paragraphs 35 and 36. Applicants are not challenging the impugned provisions in their entirety (see paragraph 39); they are challenging them in so far as they are applicable to transporters. Under section 4C, in default of furnishing particulars of consignors/consignees within a period of 15 days of detention, the goods will be sold by public auction. Therefore, right of appeal under section 20 of the 1941 Act is nugatory, since an appeal can be filed within 60 days from the date of receipt of the relevant demand notice. Tax is realised without issuing notice in forms VIB, VIC and VID in terms of rules 48L and 48M. 7.. In RN-152 of 1993, applicant No. 1, is M/s. E.I.T.A. India Ltd. which is engaged in the business of, inter alia, transportation of goods as common carriers. It is the approved transporter of Voltas Ltd. for transportation of room air-conditioners from the latter's factories at Thane in Maharashtra and Silvassa in Dadra and Nagar Haveli, to West Bengal. These are delivered either at the Calcutta godown of Voltas Ltd. or at the addresses of customers in West Bengal. Despatches are made to customers for their own use, not for resale, and these are by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the customers who affirmed affidavits to that effect. The impugned amended provisions in the 1941 Act are allegedly ultra vires the Constitution and beyond the legislative competence of the State. Neither the applicant-company nor individual consignees, nor Voltas Ltd. (in whose case, stock-transfer takes place) can be held to be "casual traders". Submissions are made in the application regarding proper interpretation of the term "casual trader". A "transporter", being merely a carrier of goods, cannot be included in that category. Such a definition is alleged to be harsh and confiscatory. Among other prayers, there is a prayer for cost as well as compensation at the rate of Rs. 500 per day of detention. 8.. The case of the applicant in RN-170 of 1993 is briefly that he imports bamboo-splits from Assam and either resells the same or makes bamboo-fences therefrom for sale. These are called "beti" or "cheti" in trade parlance, and are used in making fencings and "chatais". These are articles made of bamboo and exempt from tax under item 81 of the Schedule I of the 1941 Act. Like other dealers of the same goods, the applicant is not a registered one. For a few months past, trucks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 by the said agency. It is contended that law does not permit such guarantors to function, and it is not known if the sum of Rs. 500 was actually deposited in the Government account. The further case of the applicant is that sections 4D and 26 of the 1941 Act do not authorise framing of any rule for collection of tax in advance upon estimation, even though no sale has taken place. Rule 48M(3) is, therefore, challenged as ultra vires the Constitution, beyond the power of the rule-making authority, and as unjust and unworkable with no scope to ascertain at the check-post whether a person causing entry of goods is a casual trader and there are no guidelines in that respect. No arrangement is there for issuance of certificate as to whether one is a casual trader or not. Among other prayers, there is one for refund of Rs. 500 illegally collected. With leave of this Tribunal, 19 other dealers of bamboo-splits, namely, Narayan Chandra Das and 18 others, joined the main application as applicants by a petition dated November 30, 1993. 9.. The case of the applicant, Gopal Chandra Halder, carrying on business in the name of Ms. Sunderban Industries Centre at Canning, South 24-Parganas in R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of issuance of certificates to persons who are not casual traders, does not arise. Refund of tax collected at check-posts is ruled out. After the Explanations to section 2(1a-1) were amended in April, 1994 with retrospective effect from April 15, 1993, respondents filed a supplementary affidavit-in-opposition, saying that the entire question of law is required to be adjudicated upon in the light of the amended section 2(1a-1). Under the amended provisions, a transporter shall be deemed to be a casual trader, if he fails to disclose name and address of the consignee or consignor in West Bengal or fails to furnish copies of transportation documents in respect of the goods carried in the vehicle. A transporter will be liable to pay tax under either section 4C or 4D. The amendment of section 2(1a-1) was made only to clarify the position already obtaining. If there is no disclosure of name and address of the owner or consignor or consignee of the goods transported, it becomes impossible to find out the real person behind such transactions regarding taxable goods. The object of section 2(1a-1) is to check unscrupulous dealers who, in connivance with transporters, evade tax. A bona fide d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule to the Constitution includes incidental and ancillary powers and, therefore, covers the power to impose tax on casual traders. Various challenges regarding validity of sections 2(1a-1), 4C, 4D, rules 48L, 48M and the Trade Circular are said to be unfounded. Such provisions are claimed to be consistent with the object and scheme of the 1941 Act or the provisions of the Carriers Act, 1865. It is explained that Explanation 1 was added to explain, under what circumstances a transporter would be treated as a casual trader. The Statement of Objects and Reasons appended to the West Bengal Finance Bill, 1993, by which the impugned provisions in the 1941 Act were inserted, is not a part and parcel of the legislative enactment, and hence no reliance can be placed on the same to ascertain the Legislature's intention. Under section 2(1a-1) and the amended Explanations thereto, a transporter will be deemed to be a casual trader and will be liable to pay tax under section 4C or 4D, if he fails to disclose name and address of consignee or consignor in West Bengal or fails to furnish copy of transportation documents such as invoice, challan, transport receipt, consignment note or documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and has no reasonable or proximate connection with sale or purchase of the goods transported. Moreover, the Explanation cannot validly provide a substantive law beyond or contrary to what is stated in the main provision, namely, section 2(1a-1). Sometimes, it is not possible for a transporter to furnish copies of invoice, consignment note, challan, etc. 13.. In RN-152 of 1993, the respondents have made out a similar case as in RN-148 of 1993. They filed an affidavit-in-opposition and a supplementary affidavit-in-opposition. According to them, booking of consignments of unregistered dealers were not forbidden by the impugned notice under section 14B. Trucks are stopped, not detained, at check-posts on the State's border in order to check whether notified goods under the 1941 Act and notified commodities under the 1954 Act are imported with or without permit. Admittedly (see paragraph 18) goods were released after being satisfied that those were meant for personal use and not for sale. Issuance of notice in form VID in the name of R.B. Prosad, authorised representative of E.I.T.A., is said to be justified. In paragraph 32, the respondents claimed that tax officers of check-posts h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1941 Rules are valid and constitutional and whether the State has legislative competence to make such provisions. The 1941 Act deals with tax on sales and purchases of goods. The pith and substance of the definition in section 2(c) of the 1941 Act is that a person carrying on business of selling or purchasing goods in West Bengal is a dealer. There are provisions in the 1941 Act and the 1941 Rules, for instance, section 4B for declaration of some goods as notified goods and imposition of conditions for transportation of the same to prevent evasion of tax, section 14C laying down regulatory measures for transporters, and section 14F regarding setting up of check-posts, etc., and various rules concerning measures regulating transportation of notified goods. The West Bengal Sales Tax Act, 1954 and the Rules made under it deal with measures regulating transportation of notified commodities. A definition of "transporter" for the purposes of sections 14C and 14D of the 1941 Act has been given in Explanation (a) to section 14C as under: "(a) 'transporter' means the owner or any person having possession or control of a goods vehicle who transports on account of any other person for hire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48L the following things are to be done: (1) If a Commercial Tax Officer or Inspector is satisfied that a casual trader is liable to pay tax under section 4C(1), he shall determine the amount of purchase tax payable by a precise order in writing in form VIB. (2) In determining the liability to pay tax and the amount of tax due, the authority should consider any objection preferred by the trader together with supporting documents. (3) The order of determination of tax in form VIB should be served on the casual trader making a demand of the tax and directing the manner and time of payment thereof. (4) In case, the tax is not paid, as directed, the goods in question shall be seized for recovery of tax in the manner laid down in sub-sections (6) and (7) of section 4C. Rule 48M deals with sales tax payable by a casual trader. Under that rule, the following things are to be done: (i) Under sub-rule (1), if the Commercial Tax Officer or Inspector is satisfied that a casual trader is liable to pay sales tax under section 4D, he shall determine the amount of tax payable by a precise order in writing in form VIC. (ii) In doing so, the authority shall, under sub-rule (2), con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them in West Bengal. That being so, learned advocates appearing for the respondents submitted that all these applicants cannot be treated as casual traders. But Mr. A.K. Roy, learned advocate for these applicants, submitted that he requires a decision from this Tribunal as to whether sub-rules (3) and (4) of rule 48M are constitutionally valid and within the State's legislative competence. Mr. Roy also wanted that certain guidelines may be laid down by this Tribunal in respect of the procedure adopted at the check-posts on the basis of the legal provisions with regard to casual traders. Mr. P.K. Dutta, appearing for the Revenue, contended by relying on AIR 1988 SC 485 (Sant Lal Bharti v. State of Punjab) that when it was conceded that those applicants could not be treated as casual traders, and hence no tax or advance tax could be collected from them under section 4C or 4D, the question of vires of rule 48M(3) and (4) could not be pressed any more in a vacuum. Mr. Roy replied that documents produced at the check-posts are generally ignored and the dealers are subjected to harassment, which may be eliminated, if rule 48M(3) is held ultra vires. Moreover, there was no guarantee that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xation Tribunal Act, 1987, enacted under article 323B, is more extensive than High Court's under article 226, and, it expressly encompasses the High Court's jurisdiction and bars exercise thereof by the High Court [see sections 6 and 14 of the 1987 Act and the non obstante clause in clause (4) of article 323B]. This Tribunal's jurisdiction contains and includes the jurisdiction of all courts up to High Court including civil court. So, the High Court's powers whether appellate, referential, revisional, or under articles 226 and 227-all are comprehended in the powers of this Tribunal. Moreover, section 8 enables "a person aggrieved" to invoke the jurisdiction. In the absence of a definition of "person" in the 1987 Act, the definition given in the State General Clauses Act will apply. According to that definition, a body or association of persons is also a person. As already stated, members of the impugned association, being transporters, are aggrieved. An action by the association is nothing but an action by its members jointly taken. Even if the association, as a separate juristic person, is not aggrieved, when its members are aggrieved, the association can represent its members c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods from one State to another within the meaning of section 3 of the 1956 Act. Stock or branch transfers are neither sales nor purchases, but simply inter-State movements in the course of trade and commerce. The learned advocates appearing for the Revenue submitted that some of the provisions under scrutiny were enacted under entry 54 and the rest were designed to plug loopholes to check evasion of tax, which, they claimed, the State was competent to legislate under ancillary and incidental powers flowing from entry 54. 20.. The entries in the Lists of the Seventh Schedule are not like mere statutory provisions. These represent fields in which legislations can be made, and should be very liberally interpreted. Everything that can be said to be reasonably comprehended in an entry, should be taken to be so comprehended. The Legislature is competent to make all such incidental and ancillary provisions as may be necessary to effectuate the law including a taxing statute. It is open to the Legislature to enact provisions for checking evasion of tax by providing for search and seizure, etc. See R.S. Jhaver [1967] 20 STC 453 (SC), K.P. Abdulla [1971] 27 STC 1 (SC), Khyerbari Tea C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Objects and Reasons, it does not become invalid. The reason is that the statement is appended to the Bill merely to indicate why the provision is sought to be enacted. During the passage of the Bill in the House till finally it becomes law, the provision may be so altered as to depart from the statement. The Statement of Objects and Reasons in this case merely indicated that the object was to collect sales tax and purchase tax from casual traders, not being registered dealers, and having no fixed place of business. By and large, the first part of the definition in section 2(1a-1) is consistent with that statement. 22.. Apart from the Explanations, the definition in section 2(1a-1) is in two parts, the first or primary part and the second or inclusive part. According to the first part, a "casual trader" is one who (i) is not a registered dealer, (ii) makes occasional purchase of goods in West Bengal, but not for his personal use or consumption, or makes occasional sales of goods in West Bengal, and (iii) has no fixed place of business in West Bengal. No grievance was made by the applicants against this first part, mainly because, as submitted in the course of arguments, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as casual traders. We will soon examine Explanation 1. We agree that the inclusive part enlarges the primary definition and abstractly speaking, it is a sound rule that the categories of persons in the inclusive part need not fulfil the requirements of the primary part. But for the inclusive part, the meaning of "casual trader" in the primary part of the definition would not have extended to consignors, consignees, transporters, etc. However, according to authorities like Maxwell (on the Interpretation of Statutes) and Craies (on Statute Law), the inclusive part does not rob the term "casual trader" of its ordinary and natural meaning. In other words, "casual trader" means what is stated in the first part, and also signifies the three categories stated in the second part. This being the true interpretation of the definition in section 2(1a-1), the question is: Does the inclusive part of the definition flow from entry 54 together with its ancillary and incidental ramifications? 24.. Before we proceed to answer the above query, the time has come to examine Explanation 1. In the year 1993, when the definition clause was first enacted, Explanation 1 said that a transporter who fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction as will suppress the mischief and advance the remedy and to suppress subtle inventions and evasions for continuance of the mischief and to add force and life to the cure and remedy, according to the true intent of the makers of the Act. In AIR 1985 SC 582 (Sundaram Pillai v. Pattabiraman), the objects of an Explanation were identified as under: (a) to explain the meaning and intendment of the Act itself, (b) to clarify obscurity or vagueness, if any, so as to make it consistent with the dominant object which it seems to subserve, (c) to provide an additional support to the dominant object in order to make the Act meaningful and purposeful, and (d) an Explanation cannot interfere with or change the enactment or any part thereof, but it can assist the court in interpreting the true import and intendment of the enactment, where some gap is left, in order to suppress the mischief and advance the object of the Act. According to us, the impugned Explanation 1 to section 2(1a-1) serves the purposes enumerated above or atleast a few of them. In any case, it is as much a part of the Act as the main definition clause. It clarifies and qualifies the term "transporter" in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lishes nexus of Explanation 1, with sale or purchase, the object being to check evasion of tax and to levy and collect tax from casual traders who make only occasional sales or purchases. The legal fiction operates when the transporter fails to discharge his duties. As measures to check evasion of tax, the State is, according to us, competent to legislate Explanation 1, casting upon transporters the duties of disclosure of name and address of the consignor or consignee in West Bengal, or furnishing copies of documents of transported goods mentioned therein. These are reasonable obligations which any honest transporter can easily discharge. No transporter is required to do what is impossible to perform. As regards furnishing of copies of documents, the provision is clear enough. The provision does not require all the specified documents to be produced. In our opinion, all or any of the specified documents or of like nature, may be produced to avoid being treated as a casual trader, the object being to obtain name and address of consignor or consignee and particulars of the consignment in question so that any future purchase or sale can be brought to tax. But it is silent as to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yond doubt. A number of reported decisions were cited by rival parties. We need refer to only few at this stage. In the case of K.P. Abdulla [1971] 27 STC 1 (SC), it was held that the power to seize and confiscate goods carried in a vehicle cannot be said to be fairly and reasonably comprehended in the power to legislate in respect of taxes on sale or purchase of goods. The court was considering section 42 of the Madras General Sales Tax Act, 1959. Sub-section (3) of section 42 authorised the check-post officer to seize and confiscate any goods transported (with an option to pay a penalty) in a vehicle or boat, which is not covered by transportation documents. In that context, the Supreme Court further observed: ".......A provision so enacted on the assumption that goods carried in a vehicle from one State to another must be presumed to be transported after sale within the State is unwarranted." But under section 2(1a-1) read with the Explanation 1 of our 1941 Act, no such presumption or assumption is raised with regard to the goods transported. The legal fiction contemplated is confined to treating the transporter to be a casual trader, but then he is not at once liable to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asual trader where he fails to disclose information or furnish documents, and not deemed to be a seller or purchaser of any particular goods. As regards sale or purchase, there must be evidence. The legal fiction arising out of the deeming clause is merely that a transporter unable to disclose name and address of consignor or consignee or to furnish copies of transportation documents, will be treated to be a casual trader. But he is not required to take a licence or to pay a penalty bearing a proportion to the value of goods, in default. Here, upon being treated as a casual trader, a transporter does not at once become liable to tax, until it is established by the taxing authority that he has also made a sale or purchase of goods within the meaning of section 4D or 4C, as the case may be. Establishment of a reasonable and proximate nexus with transaction of sale or purchase is the condition precedent. The legal fiction in Explanation 1 is thus justified and competent, from the point of view of regulatory measures for checking evasion of tax. Hence, sections 2(1a-1) and 4D and sub-sections (1) to (5) and (8) of section 4C of the 1941 Act, are in conformity with the ratio of [1993] 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that effect. At least, in sections 2(1a-1), 4C and 4D and rules 48L and 48M there is no such provision. In our opinion, no one can be treated as a "casual trader" without a determination to the effect that either the requirements of the primary part of the definition in section 2(1a-1) are fulfilled in his case, or one comes within the inclusive part, and/or the conditions of the respective Explanations are fulfilled, wherever applicable. Until and unless that kind of determination is made no one can be arbitrarily treated as a casual trader. It is for the Legislature, plenary or subordinate, to provide machinery for this purpose. It is pertinent to observe that the primary onus is on the taxing authorities to show that a person made occasional sale or purchase in West Bengal and then give an opportunity to him to controvert it, and to show that he has a fixed place of business, as far as the first part of the definition is concerned. Similarly, an opportunity should be given to a person to make submission to the effect that the inclusive part of the definition does not apply to him. The requirement of giving such an opportunity must be read into the definition clause and the Expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bona fide owner of such goods within fifteen days from the date of seizure, the Commissioner may sell such goods in open auction and adjust the amount of tax on purchases of goods that may be determined under sub-section (4) with the sale proceeds of the goods and deposit the balance, if any, with a Government Treasury for refund to the bona fide owner of goods upon claim preferred in the prescribed manner within one year." Following the case of K.P. Abdulla [1971] 27 STC 1 (SC), we hold that such power to seize and then sell in open auction assumes that the goods were purchased in West Bengal, because according to the charging provision in subsection (1) of section 4C, purchase in West Bengal is the taxing event. According to us, such power to seize and then sell, though there is no demand of tax, is not fairly and reasonably comprehended in the power to legislate in respect of tax on sale or purchase of goods under entry 54. Sub-rule (4) of rule 48L, however, does not flow from sub-sections (6) and (7) of section 4C. Without laying down its own mode of recovery of tax as determined under sub-rule (1) of rule 48L, sub-rule (4) adopted sub-sections (6) and (7) as machinery prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmercial Tax Officer or Inspector shall consider any objection that may be preferred by such trader disputing his liability to payment of tax in advance. (4) Upon determination of the tax under sub-rule (1), the order of the authority referred to in that sub-rule or sub-rule (3) shall be served on the casual trader demanding thereby payment of the amount of tax so determined or the amount of tax payable in advance estimated under sub-rule (3) in such manner and by such time as may be directed therein. (5) If a casual trader fails to pay the amount of tax determined under subrule (1), or as directed to be paid under sub-rule (3), such tax shall be recoverable as an arrear of land revenue. (6) If a casual trader fails to pay the amount of advance tax estimated under sub-rule (3), such Commercial Tax Officer or Inspector may in his discretion allow such trader to furnish a bank guarantee by such date as he deems fit for securing payment of tax that may become payable on sales and the amount secured by such bank guarantee shall be adjusted with the amount of tax remaining unpaid after determination of the amount of the tax. (7) Any amount of advance tax paid by a casual trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plenary power), is otherwise to be treated as part of the statute and as effective. In AIR 1987 SC 1802 (Union of India v. Cynamide India Ltd.), where price was fixed by means of the Drugs (Price Control) Order (a subordinate legislation) issued under the Essential Commodities Act, it was held that price fixation was a legislative activity (thereby indicating that it was not within the domain of subordinate legislation). Mr. A.K. Roy, learned advocate for the bamboo-split dealers, relied on [1971] 81 ITR 105 (SC) (Bimal Chandra Banerjee v. State of Madhya Pradesh), [1982] 50 STC 1 (Delhi) [FB] (Chief Commissioner, Sales Tax v. Raj Kishan Goyal), [1974] 33 STC 98 (Orissa) (Gaffar Kassam v. Commissioner of Sales Tax), [1966] 18 STC 370 (Mad.) (Haji J.A. Kareem Sait v. Deputy Commercial Tax Officer), [1974] 33 STC 54 (All.) [FB] (Haji Ismail Noor Mohammad Company v. State of Uttar Pradesh), [1968] 21 STC 489 (Mad.) (Thirumurthi Chettiar v. State of Madras), [1967] 20 STC 367 (SC) (Sales Tax Officer v. K.L. Abraham) and [1988] 70 STC 101 (SC) (State of U.P. v. Haji Ismail Noor Mohammad Co.), in support of his contention that sub-rule (3) of rule 48M is invalid, as it is outside sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of the Kerala Act did not envisage imposition of advance tax on future sales or sales to be made, and rather dealt with tax on completed sales. Finally, the Kerala decision upheld not a rule, but provisions of the parent Act. In view of so many dissimilarities, we don't think [1992] 87 STC 15 (Ker) (Dunlop India Ltd. v. Officer-in-Charge of Sales Tax Check Post) can be applied to the present case. The main reason for which Khyerbari Tea Co.'s case AIR 1964 SC 925 cannot assist the Revenue is that the point decided there was not that a piece of subordinate legislation on a matter was constitutional even if the Act did not provide for the same. It was decided there that certain provisions in the Act were constitutional. Apart from that, in Khyerbari Tea Co.'s case AIR 1964 SC 925, the statutory provision was of a totally different dimension. The question of vires or legislative competence was vis-a-vis not entry 54, but entry 56 of List II. Entry 56 deals with "taxes on goods and passengers carried by road or on inland waterways". Section 3 of the Assam Act of 1961 which was considered in Khyerbari Tea Co.'s case AIR 1964 SC 925 imposed tax on manufactured tea carried, and pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of course, connection with future sales, but no tax under entry 54 can be recovered from them, until sales of taxable goods have actually taken place. Section 4D has not also said that tax can be recovered before any sale. When rule 48M(3) expressly calls the amount as estimated advance tax on sales to be made, it is not possible to agree with Mr. Mitra for the Revenue, that it is a security. At this stage, we are not concerned with any question whether a security of this nature can be validly demanded. 33.. It is now well-settled that "sale" in entry 54 means a "sale" within the meaning of the Sale of Goods Act, 1930. A sale is preceded by an agreement to sell. It is a contract. But rule 48M(3) seeks to realise advance tax not only before completion of sale but even before any agreement to sell. According to sub-section (4) of section 4 of the Sale of Goods Act, 1930, "an agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred". Rule 48M(3) has clearly gone far ahead of a "sale" within section 4(4) of the Act of 1930. Therefore, the stage or event at or on the happening of which r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommercial Tax Officer) in the following words: "......There can be no levy on assumptions, however equitable they may be. Certainly no tax can be levied based on expectancy and surmises. Particularly, when sales tax is demanded under the garb of advance tax, the law ........should authorise the authority demanding such a tax to impose the levy, notwithstanding the fact that no sale or purchase is involved at or about the time when the levy is called for ........... A fortiori, a demand for such an advance tax by the Checkpost Officer as a condition precedent for release of the goods detained by him in transit due to the absence of documents required under section 44 of the Act is prima facie one which is not authorised in law or justified under the Act." This case was followed in [1983] 54 STC 140 (Mad.) (Bangalore Distributing Company Pvt. Ltd. v. Assistant Commercial Tax Officer). We agree with the view taken in [1972] 30 STC 468 (Mad.) (Murugan Soap Works v. Assistant Commercial Tax Officer). Reference was also made to the case of Abdul Quader and Co. [1964] 15 STC 403 (SC), where, on the facts that the dealer did not pay to Government the sales tax he collected from purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs belonging to different parts of section 2(1a-1) and then serve the purpose of sub-sections (1) to (5) and (8) of section 4C. It seems that form VIB was devised more for operating subsection (6) of section 4C than anything else, since it starts with the premise: "Whereas it has come to my notice that you are holding a stock of goods/ transporting goods...........". Therefore, the present form VIB should be struck down. 36.. Form VIC is required to serve the purpose of-(a) both the parts of section 2(1a-1) together with the respective Explanations; (b) section 4D; (c) subrules (1) and (2) of rule 48M; as well as (d) sub-rules (4) and (5) thereof to the extent those are held to be valid. But the form does not conform to quite a few of these provisions. Apart from the fact that a registered dealer will not be a casual dealer, there are two conditions in the first part of section 2(1a-1), namely, absence of fixed place of business and making of occasional purchases or sales. Upon fulfilment of both these conditions, one may be treated as a casual trader, and only then one may be dealt with under either form VIB (for section 4C) or form VIC (for section 4D). But form VIC straighta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsider what machinery should be made regarding payment of tax under rules 48L and 48M, to the extent they are valid. (d) Since respondents have conceded that the present applicants being dealers in bamboo-splits are not casual traders, as they have got fixed places of business, and they make regular sales, we are leaving the question open whether bamboosplits are exempt from tax under item 81 of the First Schedule to the 1941 Act. (e) As rule 48M(3) is being struck down, the question whether assessment under rule 48M(1) should immediately follow collection of advance tax has been rendered superfluous. (f) Advance tax collected from the applicants in RN-170 of 1993 and RN-124 of 1994 under rule 48M(3) are not according to law, as rule 48M(3) has been held to be invalid. Hence the amounts so collected should be refunded by the respondents to them within six weeks hence; in default, the respondents shall pay interest at the rate and in the manner provided for in section 10B of the 1941 Act. 38.. The first question raised in RN-148 of 1993 and listed in foregoing paragraph 3 has already been answered. The two other questions mentioned in that paragraph are answered below: (a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purposes of this Act"-is controlled by and subject to the specific purpose of "useful for or relevant to any proceedings under this Act". Therefore, in the absence of any proceedings under the 1941 Act, no transporter can be asked to furnish all sorts of information and documents in respect of every consignment in exercise of the power conferred by section 14B. The notice is not according to section 14B and hence invalid. It is hereby quashed. (iii) Goods transported into West Bengal can be detained and seized only according to valid legal provisions, not otherwise. As far as the impugned provisions are concerned, section 4D does not contemplate any detention or seizure. Sub-section (6) of section 4C contemplated seizure, but we have found it to be unconstitutional. Therefore, no seizure could be validly made and can be made any more under section 4C(6). We do not see any provision in section 4C authorising detention. However, we cannot decide hypothetical problems or express our views with regard to other provisions of law, if any, in this context. Each case of detention or seizure may be subjected to judicial scrutiny by the appropriate forum, as and when it is challenged. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in the Finance Department. Irrespective of good faith or not, compensation is awardable against the Government in a suitable case. As it is unnecessary, we are not going into the question whether Government servants can be saddled with compensation even where the actions were in good faith. If, however, the respondents thought that the applicants should be subjected to cross-examination on the question of compensation, they should have applied for that at the initial stage or at least when Mr. Kothari pressed for compensation. Having failed to do so, this plea cannot be taken at the concluding stage of arguments. Mr. Dutta's remaining contentions are also unfounded. The extraordinary power of this Tribunal under section 8 of the 1987 Act, despite the existence of section 7, is more comprehensive than the appellate, original, reference and revisional jurisdictions of the High Court and those under articles 226 and 227 of the Constitution all combined, because even the jurisdiction of the civil court is merged in section 8 of the 1987 Act. To appreciate the sweep and width of the power of this Tribunal, one has to look at article 323B(4) and sections 6, 7, 8, 12, 13, 14 and 15 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petence of the State Legislature; (iv) Sub-rules (1) and (2) of rule 48M of the 1941 Rules and sub-rules (4) and (5) thereof in so far as they relate to sub-rule (1) are valid, constitutional and within the legislative competence of the State; (v) Sub-rule (4) of rule 48L and sub-rules (3), (6) and (7) of rule 48M of the 1941 Rules and sub-rules (4) and (5) thereof in so far as they relate to subrule (3) of rule 48M are invalid, unconstitutional, outside the legislative competence of the State under entry 54 of List II and ultra vires the provisions of the 1941 Act, and those are struck down; (vi) Forms VIB, VIC and VID are quashed; (vii) Amounts collected as advance tax or bank guarantees or undertakings taken in lieu thereof under the impugned sub-rules (3) and (6) of rule 48M of the 1941 Rules from the applicants in all the four applications before us, including the added applicants, shall be refunded or released to them within six weeks hence. In default, respondents shall pay interest at the rate and in the manner provided for in section 10B of the 1941 Act. Respondents are directed accordingly; (viii) It is hereby declared that none of the applicants including the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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