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TMI Blog2002 (11) TMI 754X X X X Extracts X X X X X X X X Extracts X X X X ..... 17, 1998 the Intelligence Inspector, Squad No. III, Thiruvananthapuram at Neyyattinkara inspected the parcel office and on checking the consignment in question found that the transport of the same was not accompanied with the original of the invoice and on physical verification it was found that the quantity transported was 2,788 sets as against 1,790 sets declared in the bills accompanied. He had accordingly estimated the value of the goods at Rs. 3,20,620, i.e., at the rate of 115 per set. He thereafter issued a notice under section 29A(2) of the Act on February 17, 1998 demanding a security deposit of Rs. 64,124 being double the tax for release of the said goods. The said notice, it is stated, was issued to the consignor as well as the consignee through the parcel office but the same was not responded till March 15, 1998 and another notice dated March 16, 1998 was also issued. Then the Rockman Enterprises, Karamana, Thiruvananthapuram the consignee filed a reply dated April 24, 1998 wherein it is stated that the American serving sets transported as per invoice dated February 6, 1998 was 2,790 in number valued at Rs. 53 per set. The original of the invoice was also produced. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions and to impose penalty. According to the learned Government Pleader the transport of goods contemplated under section 29A of the Act ceases only by the delivery of the goods by the parcel service to the consignee and that till such time it must be deemed to be in the course of transportation of the goods. The Government Pleader further submits that this has been made explicit by incorporating such a provision in section 29 of the Act [Explanation II to section 29(2) added by the Kerala General Sales Tax (Amendment) Act, 2000]. The Government Pleader also relied on the decision of this Court in Pavithran v. Poulose [1978] 42 STC 27; 1978 KLT 431 and the decision of the Supreme Court in Tripura Goods Transport Association v. Commissioner of Taxes [1999] 112 STC 609. 3.. In order to appreciate the rival contentions it is necessary to refer to the relevant provisions of the Act. Section 29 of the Act provides for establishment of check-post and inspection of goods in transit. Under the said section if the Government considers that with a view to prevent or check evasion of tax under the Act in any place or places in the State it is necessary so to do, they may by notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (2) also, or (b) where the declaration is false or is reasonably suspected to be false in respect of the particulars furnished therein. However, before taking action for the confiscation of goods under this section, the officer shall give the person in charge of the goods and the owner, if ascertainable, an opportunity of being heard and make an enquiry in the manner prescribed. 4.. Section 29A of the Act provides the procedure for inspection of goods in transit through notified areas. Under sub-section (1) of section 29A the driver or other person in charge of a vehicle or vessel shall stop the vehicle or vessel and any person referred to in subsection (2A) of section 29 shall stop at any place with a notified area when so required by the officer in charge of that notified area or at any other place when so required by any officer empowered by the Government in that behalf, for the purpose of enabling such officer to verify the documents required by sub-section (2) of section 29 to be in the possession of the person transporting the goods and to satisfy himself that there is no evasion of tax. Sub-section (2) provides that if such officer has reason to suspect that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for adjudication which provides that the officer authorised under sub-section (3) shall, before conducting the inquiry serve notice on the owner of the goods and give him an opportunity of being heard and if, after the enquiry, such officer finds that there has been an attempt to evade the tax due under this Act, he shall, by order, impose on the owner of the goods a penalty not exceeding twice the amount of tax attempted to be evaded, as may be estimated by such officer. Sub-section (6) provides that if the owner of the goods or his representative or the driver or other person-in-charge of the vehicle or vessel does not furnish security or execute the bond as required under sub-section (2) within fourteen days from the date of stopping the vehicle or vessel under sub-section (1), the officer referred to in that sub-section may, by order, seize the goods, and in the event of the owner of the goods not paying the penalty imposed under subsection (4) within thirty days from the date of the order imposing the penalty, the goods seized shall be liable to be sold for the realisation of the penalty in the manner provided in sub-section (9). 5.. The contention of the department is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the transport of the goods is not supported by proper documents contemplated under section 29(2) and also to find out whether there is any attempt at evasion of tax and to take further proceedings contemplated under the said sections. In the instant case the goods in question were consigned by M/s. Cello Household Appliances (Pvt.) Ltd., Mumbai to M/s. Rockman Enterprises, Karamana, Thiruvananthapuram and transported in a lorry belonging to Fast and Safe Transport (P) Ltd., Thiruvananthapuram. The goods so consigned was kept in the parcel office of the said transporting company. When the goods were kept in the said parcel office, the Intelligence Inspector, Squad No. III, Thiruvananthapuram at Neyyattinkara inspected the said parcel office and found that 2,788 pieces of American serving Sets valued at Rs. 1,47,870 covered by invoice No. 7222 dated February 6, 1998 from M/s. Cello House Hold Appliances (Pvt.) Ltd., Mumbai-63 intended for M/s. Rockman Enterprises, Karamana, Thiruvananthapuram. On verification of the said invoice it was found that as per the invoice only 1,790 pieces are mentioned. It is in the above circumstances, the Intelligence Inspector took the view that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ascertaining as to whether there is an attempt at evasion of tax. The true scope of the provision regarding the establishment of check-post and evasion of tax was considered by the Supreme Court in Tripura Goods Transport Association's case [1999] 112 STC 609 mentioned supra in the context of the provisions of articles 14, 19(1)(g) and 301 of the Constitution and the provisions of the Tripura Sales Tax Act which cast an obligation on the transporters to get registered under the said Act and to maintain record of goods transported and produce declaration forms and the consequences for its non-compliance. After referring to the various provisions of the Act the Supreme Court considered the contention of the counsel for the revenue that the aforesaid provisions are only to streamline assessment and to check the evasion of sales tax and the said obligation casts on the transporters to achieve such purpose is a necessary concomitant of any taxing statute to make collection of tax more effective and purposeful. The Supreme Court thereafter observed that whenever any goods is sold or purchased inside or outside the State, the incidence of tax and the quantum of tax has to be ascertained u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o them under section 29A read with section 29(2) of the Act or purported to have so acted. A contention was taken by the respondent in that case that the power of verification applies to goods in the possession of the carrier at the relevant time and not to goods the possession of which was no longer with the carrier. In other words, the power under section 29A does not extend to goods which were no longer in the possession of the carrier. The learned Judge, Kochu Thommen, J. (as His Lordship then was) did not agree with the interpretation sought to be put on sections 29 and 29A by the respondent. The Court observed as follows: "Section 29 prohibits the transport of goods without the required documents. Any transportation without the necessary documents is a violation of the law. The power to verify the documents under section 29A is to ascertain whether section 29(2) was in terms satisfied and whether there was any evasion of tax. It is necessary to ascertain the manner in which the goods are being carried or had been carried by the vehicle. In the case of goods which were sold and removed from the vehicle, the carrier has a duty to satisfy the officers that such goods had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding security for the release of the said goods by the transporter. For that reason the Intelligence Officer was also justified in adjudicating the question as provided under sub-section (4) of section 29A of the Act. The view which we have taken as above accords with the decision rendered by the learned single Judge in Pavithran's case [1978] 42 STC 27 (Ker); 1978 KLT 431 mentioned supra. 12.. Further an amendment was made to section 29 of the Act by the Kerala General Sales Tax (Amendment) Act, 2000 by inserting Explanation II to sub-section (2) as follows: "Explanation II-For the purposes of this Act, transport of goods commences at the time of delivery of goods to a carrier or bailee for transmission and terminates at the time when delivery is taken from such carrier or bailee". This Explanation, though introduced only by 2000 amendment, only explains the scope of the provisions of section 29(2) in that what was implicit as understood by this Court itself was made explicit. It does not in any way widen the scope of section 29(2) so as to have only prospective operation. 13.. Under these circumstances, we are of the view that the Tribunal has committed a serious error ..... X X X X Extracts X X X X X X X X Extracts X X X X
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