9911796707
TMI Blog2000 (11) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... endency of this petition, it is now reported that the cargo has been allowed to be delivered and it has been cleared for shipment. The grievance of the petitioner, however, remains in view of the impugned general instructions (annexure A/14) issued on September 26, 2000, by the abovementioned Sales Tax Officer to the handling agent of the company abovenamed, directing him not to release the stored quantity of castor oil for export, to the petitioner and other parties, without instructions from the sales tax authority who has issued the general instructions. 3.. The Sales Tax Officer (respondent No. 1) has filed a reply affidavit to justify the impugned action and states that the same has been taken in exercise of powers under section 59(5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to any of the exporters as well as parties other than the above exporters, may not be released without any instructions. This instruction should invariably be followed and the castor oil belonging to any exporters may not be released without the order of release of stop delivery from this office. This order has been issued to you in pursuance of the sections mentioned at serial No. 4 in the reference." 5.. The above impugned order and the impugned general instructions are purported to have been issued by the Sales Tax Officer in exercise of powers under section 59. Sub-sections of the said section relevant for the purpose read as under: "59. Production and inspection of accounts and documents and search of premises.-(1) ............. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the carrier, bailee or any person as is relevant. (6) The provisions of the Code of Criminal Procedure, 1973 relating to searches shall apply, so far as may be, to a search made under sub-sections (5) and (5A). Sub-section (5A) was inserted from April 1, 1999. 6.. Learned counsel Shri Pathak appearing for the petitioner questions the legality of the impugned action of the Sales Tax Officer. He submits that there is no sales tax leviable on export of castor oil. There were no circumstances or facts available with the concerned officer to form a bona fide opinion that there was any likelihood of evasion of sales tax at the hands of the petitioner-company. It is further contended that without any justifiable reasons, the delivery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as taken "for the purpose of verifying the dealers of the castor oil and the purchase tax on castor seeds paid by them or not". 9.. The action of stopping delivery of goods for export is one having serious financial consequences so far as the exporter is concerned. The power conferred on the sales tax authorities under section 59 of the Act is of extraordinary nature and has been so conferred for the purpose of preventing evasion of sales tax on taxable goods. The action under section 59 of stopping delivery of goods for verification and inspection is permitted against the party likely to evade the tax. The safeguards provided in the section are that the Commissioner or his delegate should have reasonable grounds to believe that there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above lawful purpose, the sales tax authorities could have proceeded against the sellers of castor seeds or the oil millers. No action was warranted or could be taken against the exporter of the castor oil. It may also be stated that action permissible under section 59 of stopping delivery of goods for inspection and verification is a power not to be exercised lightly and on unsubstantial grounds, because the action contemplated has serious pecuniary consequences on the party against whom the action is taken. Without any cogent and substantial ground which could lead to formation of a bona fide belief by the tax authority of evasion or likely evasion of tax, a drastic action of stopping delivery of goods could not have been taken. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the petitioner, who was the exporter of the goods. It is only when delivery of goods was stopped that the petitioner-company on his own addressed several letters to the authorities objecting to the procedure followed and action taken. Since the action under section 59(4) is to be directed against a dealer, it is necessary that the dealer against whom the action is taken has to be given a notice and an opportunity of hearing. In the instant case, only an intimation was sent to the handling agent of the petitioner-company but no intimation for grant of opportunity of hearing was sent to the petitioner-company. 11.. The impugned order (annexure A/7) dated August 7, 2000, therefore, cannot be sustained and is to be quashed. 12.. As has b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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