9911796707
TMI Blog2003 (6) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... In course of its business, the petitioner despatches non-ferrous metal scrap, purchased in the State of Assam, to its consignment agents appointed in other parts of the country. The consignment agents, so appointed, sell the materials belonging to the petitioner on the account of the petitioner. The despatches, so made to the consignment agents, are on stock transfer basis, i.e., otherwise than by way of sale and the same is not taxable under the Act of 1956. The petitioner appointed one M/s. Gaurav Metal Corporation in Delhi as its consignment agent and entered into a formal agreement with the said firm (annexure I). While the goods are sent on stock transfer basis by the petitioner through local transporters, the vehicles carry with them all requisite challans, papers, etc., which are statutorily required for such purposes. In the past, there was no difficulty in carrying on its business by the petitioner, but since the year 1996, the vehicles carrying materials sent by the petitioner to its consignment agents are being stopped at Boxirhat check-post and a security of Rs. 5,000 per truck is demanded, under the Act of 1956, for allowing the vehicles to cross the barriers of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re and no authority superior to the assessing authority can direct the assessing authority to demand security. Such directions, contends Dr. Saraf, divests the assessing authority of the quasi-judicial powers, which the Act of 1956 vests in the assessing authority. The impugned circulars/orders, therefore, submits Dr. Saraf, are wholly without jurisdiction and deserve to be set aside. 6.. Referring extensively to various provisions of the Act of 1956 and the Act of 1993, Dr. Saraf has pointed out that under section 7(2-A) of the Act of 1956 security can be demanded only at the time of granting of the certificate of registration and not thereafter. It has also been pointed out by Dr. Saraf that section 7(3-A) read with section 7(3-B) of the Act of 1956 show that even when additional security is to be demanded after granting of the certificate of registration, the same cannot be done without giving an opportunity of hearing to the person concerned. This shows that such demand of additional security can be made, contends Dr. Saraf, only in specific cases, which call for application of judicial mind and that such security cannot be demanded arbitrarily or in a routine manner. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act of 1956, the provisions of section 7(2-A) are not applicable to the case of the petitioner. This position is not disputed by Mr. Talukdar. 11.. Coming to section 7(3-A) of the Act of 1956, I notice that section 7(3-A) deals with the powers of the authorities to demand additional security after the grant of the certificate of registration. Section 7(3-A) reads as under: "7(3-A). Where it appears necessary to the authority granting a certificate of registration under this section so to do for the proper realisation of tax payable under this Act or for the proper custody and use of the forms referred to in sub-section (2-A), he may, at any time, while such certificate is in force, by an order in writing and for reasons to be recorded therein, require the dealer, to whom the certificate has been granted, to furnish within such time as may be specified in the order and in the prescribed manner such security, or, if the dealer has already furnished any security in pursuance of an order under this sub-section or sub-section (2-A), such additional security, as may be specified in the order, for all or any of the aforesaid purposes." 12.. Section 7(3-B) of the Act of 1956, howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the authority, which is competent to grant certificate of registration. According to section 9(2) of the Act of 1956, the authorities empowered to assess, reassess, collect and enforce payment of tax under the general sales tax law of the appropriate State, shall, on behalf of the Government of India, assess, reassess, collect and enforce payment of tax, including interest, penalty, etc., under the Act of 1956. It is worth mentioning, in this regard, that section 11 of the Act of 1993 makes it clear that the assessing officer is the competent authority to grant certificate of registration under the Act. The assessing officer has been defined by section 2(3) of the Act of 1993 as under: "2(3) 'Assessing officer' means any person appointed to assist the Commissioner under sub-section (1) of section 3 to whom all or any of the powers of the Commissioner for the levy and collection of tax conferred by or under this Act or Rules framed thereunder has been delegated by the Commissioner under sub-section (3) of that section." 17.. Section 3(1) of the Act of 1993 provides that the State Government may, by notification, appoint a person to be the Commissioner of Taxes, together with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities as well as the appellate authorities are Judges in their own cause; yet when they are called upon to decide disputes arising under the Act they must act independently and impartially. They cannot be said to act independently if their judgment is controlled by the directions given by others." (Emphasis supplied) 20.. In the present case, there is no dispute before me that the goods of the petitioner are sent to the consignment agents otherwise than by way of sale. Hence, such a transportation of goods is not taxable under the Act of 1956. In view of the fact that security can be demanded only for proper realisation of the tax payable under the Act of 1956 and in view also of the fact that no tax is payable by the petitioner on stock transfer, the act of demanding of security by the respondents on such stock transfer at the check-posts aforementioned on the strength of the impugned circulars/orders is per se illegal, without jurisdiction and not tenable in law. 21.. What, thus, crystallises from the above discussion is that the Commissioner of Taxes has no power whatsoever to issue instructions/directions to his subordinates asking to demand security indiscriminately ..... X X X X Extracts X X X X X X X X Extracts X X X X
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