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TMI Blog2005 (3) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... both sides and after going through the orders under challenge and the circumstances under which those orders were issued, which are discussed below, I feel the orders against individual railway officials in any case are not sustainable and therefore there is no need to go into the propriety, legality or correctness of each and every order challenged in the original petitions. However, what is required in the interest of the railways and the State Government and in public interest is to clarify the powers and jurisdiction of the officers under the KGST Act to enforce statutory provisions against the railways and the extent of immunity available to the railways from interference with their operations by the officials of the Sales Tax Department so that omissions and violations do not take place in future and violations in the future are handled properly. For this purpose also the facts and allegations raised generally have to be gone into. The allegations leading to the orders impugned in the original petitions are transport of goods, namely, rubber and spices like pepper, ginger, etc., from Kerala to outside the State through railways by dealers in Kerala without paying sales tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... safeguards provided to prevent evasion of sales tax apply to all against whom they are directed including railways howsoever inconvenient those provisions are to such authorities. Of course, the Legislature has not provided detailed or specific provisions in the KGST Act for inspection and detention of goods while under transport by railways probably because they do not expect the railways to violate general provisions applicable for transport of goods and to promote its business by encouraging smuggling of goods by unscrupulous dealers. Therefore the question is as to what extent the railways should conform to the requirements of the existing statutory provisions and what are the immunities available to the railways for transport of goods without scrutiny and interference by the Sales Tax Department. In this regard the main question to be considered is whether the railways can dispense with documents prescribed under the KGST Act and Rules which dealers are required to use for transport of goods throughout Kerala, while permitting transport through railways, and if so, the powers of the officers authorised under the KGST Act to enforce compliance by dealers to prevent evasion of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etention of goods while in the custody of railways and if released in violation of such orders, penalty can be levied on railways and its officials helping evasion of sales tax. 3.. The first question to be considered is whether the railway is immune from the application of the KGST Act and Rules. I do not find any immunity granted to the railways either under the railways Act or under the KGST Act. On the other hand, section 93(d) and (e) of the Railways Act visualise a situation where goods under transport by railways are subject to seizure or detention by the State Government or its officers or under any other legal process. The relevant provisions of section 93 are extracted hereunder for easy reference: "93. General responsibility of a railway administration as carrier of goods. Save as otherwise provided in this Act, a railway administration shall be responsible for the loss, destruction, damage or deterioration in transit, or non-delivery of any consignment, arising from any cause except the following, namely: (a) .. (d) arrest, restraint or seizure under legal process; (e) orders or restrictions imposed by the Central Government or a State Government or by an o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omes under the definition of a "dealer". I do not think railway can be treated as a "dealer" for the purpose of the KGST Act. However, being a "transporting agency" railway is bound by the provisions of section 32 of the KGST Act to file returns and to comply with the prescribed formalities. However, it is for the Commissioner of Commercial Taxes in consultation with the Divisional Managers of the railways in the State to centralise filing of returns only in major centres to avoid unnecessary filing of returns by all the railway stations wherever there is cargo booking and delivery. 5.. The next question to be considered is the applicability of section 29(2) of the KGST Act and section 30 read with rule 37 of the KGST Rules for the purpose of transport of goods through railways. Section 29(2) is extracted below for easy reference: "29. Establishment of check-posts and inspection of goods in transit. (1) .. (2) No person shall transport within the State across or beyond the notified area any consignment of goods exceeding such quantity or value as may be prescribed by any vehicle or vessel, unless he is in possession of, (a) either a bill of sale or delivery note or way bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re delivery to the owner, no such scrutiny is permissible while goods are on train. Inspection and detention if any should be done before goods are loaded in trains and only after unloading from the trains. 6.. The next question is the validity of various circulars issued by the railways and Commissioner of Commercial Taxes. While the railways are relying on exhibits P1, P2, P5 and P6, Special Government Pleader relied on exhibit R1(a) circular issued by the Commissioner of Commercial Taxes, and the earlier circular exhibit R1(e) issued by the railways. Exhibit P1 is a general instruction issued by the railways authorising the officers of the State Government and municipal bodies to verify and collect information from the registers and records of the railway goods and parcel offices pertaining to transport of goods. According to the railways, the maximum facility that can be given to the Sales Tax Department is to permit them to take extracts from the registers pertaining to transport of goods maintained by the railways. I have already stated that when goods are being transported under bogus names and in the name of nonexisting persons and railways deliver the goods without ident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansport only from registered dealers and with proper identification such as ration card, passport or any such authentic document. The Commissioner of Commercial Taxes is the head of the Sales Tax Department in the State and he is given statutory authority to enforce the provisions of the KGST Act and Rules. Therefore exhibit R1(a) filed along with counter-affidavit is not just a request by the Commissioner of Commercial Taxes which can be brushed aside lightly and railway officials are bound by such instructions and those who violate will be liable for penalty under section 45A(1)(g) and (h) of the KGST Act. As I have already observed above, no one transports rubber or spices for personal use and every transport is in trade quantity and is in the course of trade. The stand of the Commissioner of Commercial Taxes that persons transporting goods are "dealers" within the meaning of the Act and are entitled to transport goods only after taking registration under the KGST Act is quite reasonable and railways should insist on production of statutory documents for transport of goods. Similarly when the main allegation is evasion of sales tax by transport of goods under bogus names, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST Act and section 30 of the Act read with rule 37 of the KGST Rules and all instructions issued by the Commissioner of Commercial Taxes which have statutory force under section 3(1) and 3(1A)(c) of the KGST Act, will apply to railways. Therefore railways are entitled to receive goods for transport within and out of Kerala and release of goods reaching Kerala from other destinations only if goods are accompanied by documents prescribed under the provisions of the KGST Act and Rules. 2.. The railways shall instruct all their parcel offices and booking offices to accept goods and release goods only on proper documents and on production of proof of identification of the person from whom goods are received and to whom goods are released, which should be through authentic documents like ration card, voter's identification card, passport, bank records, etc. The railways shall maintain a register at every place of booking or release of goods containing the details of goods received, or released, and the address and identity of the person from whom goods are received or to whom goods are released, and if the person booking or taking delivery is not the consignor or consignee, authorisati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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