9911796707
TMI Blog2003 (7) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... (12) of the Madhya Pradesh Commercial Tax Act, 1994 (for brevity the Act of 1994 ) respectively. 4.. In nutshell the case of petitioner is that the petitioner is a transporter engaged in the business of transportation of goods at Bombay. That certain consignments containing various consumer goods were loaded at Bombay in two Truck Nos. MP-09-KB-2195 and MP-09-KB-817. The goods loaded in the trucks were consigned by various parties for delivery to M/s. Hindustan Lever Ltd., at different places. Part of the goods were to be delivered at Indore and Jabalpur in the State of Madhya Pradesh and part of the goods to be delivered at places outside the State of Madhya Pradesh, viz., Varanasi and Shuklaganj in Uttar Pradesh. The goods consigned to the places outside Madhya Pradesh were only to pass through the State of Madhya Pradesh and were not meant for sale in Madhya Pradesh. The Truck No. 817 reached Sendhwa Check-post on May 27, 2003 and Truck No. 2195 reached on May 28, 2003. They were stopped and detained at Check-post barrier. Admittedly it is the case of the petitioner that the requisite declarations in form No. 75 were not available with the trucks. Though the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the authority concerned has already passed the order on June 6, 2003 imposing the penalty and thereafter taking the reply of June 11, 2003 on record passed another order which is nothing in the eyes of law but futile exercise. He vehemently argued and opposed the action taken by the Assistant Commissioner. He cited the provisions of newly added section 45-A in the Commercial Tax Act, 1994 and submitted before me that the Assistant Commissioner has neither followed the principles of natural justice nor the mandatory requirement under the law. He further submitted that Shri Anil Arora had gone just to enquire on behalf of the owner of the petitioner-company and he did not know anything about the case but the concerned authority, i.e., Assistant Commissioner illegally recorded his presence and treated it as a participation in the proceedings and as a part of providing hearing to the petitioner and now just to cover their illegal acts, now the respondent is trying to submit that opportunity of being heard was provided to the representative of the petitioner. He further submitted that the imposition of penalty without proper notice, enquiry and hearing is also illegal. He also cite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle coming from outside the State and bound for outside the State, whereas a vehicle was carrying the goods which were to be delivered in the State of Madhya Pradesh at Jabalpur/Indore. The petitioner was required to produce form No. 75 in respect of the goods being imported into Madhya Pradesh and form No. 85 for goods exported out of Madhya Pradesh. The petitioner deliberately submitted form No. 85 for part of the goods to be brought in Madhya Pradesh and this was a mala fide and intentional act on the part of the petitioner in order to evade tax payable in Madhya Pradesh. He further submitted that the driver of both the trucks had left the spot leaving the trucks at the check-post. On May 30, 2003 showcause notices were directed to be issued but on June 2, 2003 representative of the transporter appeared before the respondent, he was heard and impugned order was passed on June 6, 2003 and the penalty has also been rightly imposed and prayed for the refusal of the stay as well as for dismissal of the petition. Shri Mukati submitted that there is no bar in filing revision and the petitioner is not required to wait till the expiry of time for filing appeal. 9.. I have heard lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned in sub-section (4), to search the vehicle and inspect the goods and all documents relating to such goods which are in the possession of the transporter. The transporter shall, if so required, give his name and address and names and addresses of the owner of the vehicle and of the consignor and consignee of the goods. (7) If the Check-post Officer finds after searching the vehicle and verifying the declaration or other documents relating to the goods, that (a) goods notified under sub-section (4) are being transported in respect of which the transporter has not filed any declaration; or (b) the declaration filed in respect of any goods is false or incorrect, either in respect of the kind of goods, or the quantity of goods transported, or the value thereof; or (c) the consignor or the consignee of the goods is shown to be a dealer registered under this Act, while the records available in his office do not show the existence of such a dealer, such officer may presume, until the contrary is proved, that an attempt was being made to facilitate the evasion of tax in respect of such goods and he may, after recording his reasons therefor in writing, a copy of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated October 17, 2002 issued by the Commissioner, Commercial Tax, are also reproduced below: 12.. Admittedly, in this case, the petitioner was not having declaration form No. 75 which is required as per sub-section (5) of section 45-A of the Act of 1994. A bare reading of the aforesaid provisions of section 45-A would show that under sub-section (4) every person transporting such goods as may be notified by the State Government in this behalf shall carry with him an invoice, bill or chalan or any other document, by whatever name called, issued by the consignor of the goods giving such particulars as may be prescribed. Under sub-section (5) every transporter shall, before crossing any check-post or barrier set up or erected under sub-section (1), deliver to the Check-post Officer a declaration duly signed by the consignor in such manner, in such form and containing such particulars as may be prescribed. A separate declaration shall be filed in respect of the consignment or consignments relating to each consignee where the goods are being imported into Madhya Pradesh and of each consignor where the goods are being sent outside the State. No declaration in relation to goods to be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 15.. Sub-section (9) of section 45-A provides that if, after considering the statement of the transporter, the Check-post Officer is satisfied that the explanation is satisfactory and that there was no attempt to evade tax in respect of the goods seized, he shall record his findings giving his reasons therefor and release the goods or the vehicle alongwith the goods to the transporter in such manner as may be prescribed. 16.. Sub-section (10) of section 45-A provides that if the Checkpost Officer is not so satisfied, he shall record his findings accordingly giving reasons therefor, and he shall serve on the transporter a notice in writing requiring him to show cause, ordinarily within fifteen days of the service of the notice, why a penalty as specified in the notice, which shall be equal to ten times of the amount of tax which would have been payable if the goods were sold within the State on the date of seizure, should not be imposed. 17.. Sub-section (11) of section 45-A provides that if, after taking into consideration the explanation, if any, of the transporter and after giving him an opportunity of being heard, the Check-post Officer is satisfied, for reasons to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to consider the explanation and the statement of the transporter and after his satisfaction, findings are to be recorded alongwith the reasons. A conjoint reading of the provisions of aforesaid sub-sections of section 45-A clearly provide a status of a quasijudicial authority to the Check-post Officer, who will hold enquiry in the matter. In cases where penalty is to be imposed, the nature of those proceedings is also quasi-criminal proceedings. Therefore, as per the well-settled principles of law, the aforesaid provisions mandate for full-fledged enquiry into the matter. In the words after giving him an opportunity of being heard a full-fledged enquiry is contemplated which includes giving a proper show cause notice; disclosing adverse documents and materials which is being relied; taking explanation and documents; recording of statement, if necessary evidence; and also providing an opportunity to cross-examine and thereafter to record findings based on reasons and for doing so provide a reasonable opportunity of hearing by following principles of natural justice. In succeeding paras I have dealt this question very elaborately. 21.. After hearing learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing principles emerge in such situation which are required to be followed: (i) Non-issue of notice or mistake in the issue of notice or defective service of notice does not affect the jurisdiction of the assessing officer, if otherwise reasonable opportunity of being heard has been given. (ii) Issue of notice as prescribed in the Rules constitutes a part of reasonable opportunity of being heard. (iii) If prejudice has been caused by non-issue or invalid service of notice the proceedings would be vitiated. But irregular service of notice would not render the proceedings invalid; moreso, if assessee by his conduct has rendered service impracticable or impossible. (iv) In a given case when the principles of natural justice are stated to have been violated, it is open to the appellate authority in appropriate cases to set aside the order and require the assessing officer to decide the case de novo. Thus, whenever an order is struck down as invalid being in violation of principles of natural justice, there is no final decision of the case and, therefore, proceedings are left open, and a direction of de novo proceedings by an order of remand, was proper. [2002] 125 STC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity of hearing is to be given to the party concerned. It has been consistently held by their Lordships of the Supreme Court right from the case of Province of Bombay v. Khusaldas S. Advani AIR 1950 SC 222 that when the law under which the authority is making a decision, itself requires a judicial approach, the decision will be quasi-judicial. A quasi-judicial authority is bound by the rule of hearing. In the case of Maneka Gandhi v. Union of India AIR 1978 SC 597, their Lordships of the Supreme Court has held that even in an administrative proceeding which involves civil consequences, the doctrine of natural justice must be held to be applicable and that reasonableness in any decision is subject to the brooding omnipresence of reasonableness as per article 14 of the Constitution of India. 26.. Admittedly, the concept of natural justice mainly consists in two rules (i) the rule against bias; and (ii) the rule of hearing party. The rule for hearing means the giving of an opportunity to the person for controverting, contradicting or explaining the material allegations relied upon in making an order against him, and for that purpose it initially includes the disclosure of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest or affecting the rights of persons. To use the time-hallowed phrase 'that justice should not only be done but be seen to be done' is the essence of fairness equally applicable to administrative authorities. Fairness is thus a prime test for proper and good administration. It has no set form or procedure. 29.. It is also well-settled that a quasi-judicial Tribunal particularly functioning under a taxing enactment should see that every possible step is taken to ensure that the person aggrieved is fully equipped with the material so as to object to the proposals of assessment made by the taxing officer. In the case of T.A. Kuppuswami Chettiar Co. v. State of Tamil Nadu [1972] 30 STC 473 (Mad.); AIR 1972 Mad. 478 it has been held that the opportunity should be really effective. An effective, real or fair opportunity is the object of the assessment. In the case of Ramdiyari Khemka v. Commissioner of Income-tax [1966] 61 ITR 600 (Cal); AIR 1964 Cal 367 it has been held that a notice under section 33-B of the Income-tax Act was served to revive the assessment of the assessee. In that notice, the reasons given for revision of assessment were that on certain enquiries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as the principles of natural justice and without providing an opportunity of hearing to the party concerned. It is an admitted position under the law that the question of imposition of penalty depends upon the nature of the breach committed by the party concerned. In this connection in the case of Hindustan Steel Ltd. v. State of Orissa, reported in [1970] 25 STC 211, in the matter of Orissa Sales Tax Act, their Lordships of the Supreme Court has held that: ............penalty may be imposed for failure to register as a dealer: Section 9(1) read with section 25(1)(a) of the Act. But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id, no doubt the same can be examined under writ jurisdiction because it directly affects the validity of the order and the question of exercise of jurisdiction by the authority which clearly attracts the cause for issuing writ of certiorari. It is not only because the decision of the Tribunal is void but it is because the authority concerned has violated the statutory provisions of law and principle of natural justice and has not exercised jurisdiction vested in it under the law. Therefore, this Court can examine the legality of the order both under article 226/227 of the Constitution of India. In view of this, it is not necessary to examine that whether alternative remedy of appeal or revision was available to the petitioner or not, as has been argued by the parties. I am not satisfied with the arguments advanced by the learned Government Advocate for respondent that on June 2, 2003 representative of the petitioner appeared and in this case proper opportunity of hearing was given to the petitioner. Looking to the record of the Check-post Officer, I am also not convinced with this line of argument of the learned Government Advocate for respondent that the penalty has been imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to be followed by the Check-post Officer before imposing any penalty. It is to be remembered that observing fair procedure in the enquiry is the antithesis of arbitrariness and unreasonableness. 35.. In this particular case, I have examined the matter from all corners and in view of the aforesaid discussions, I find that the orders (annexures P/8 and P/9 ) passed by the respondent are not only contrary to the provisions of law but on the face of it they are void and contrary to the principles of natural justice and fair procedure, therefore, they are liable to be setaside and accordingly they are setaside. 36.. Consequently, this petition is disposed of with a direction to the concerned authority to hold a de novo enquiry into the matter, to issue clear and specific showcause notice to the petitioner assigning the reason that why such heavy penalty is being proposed and thereafter to provide fifteen days time, as has been laid down under the law, for submitting the reply and documents and thereafter to adjudicate the showcause notice after enquiry and providing reasonable opportunity of hearing to the petitioner. It is expected that the authority concerned shall act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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