9911796707
TMI Blog2006 (1) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... es Tax Act , by the Intelligence Officer, Squad No. II, Commercial Taxes, Trivandrum, proposing to impose penalty of Rs. 36,400 under section 45A of the Sales Tax Act presumably on the ground that the third respondent had not co-operated with the sales tax authorities in discharge of their duties in the transportation of 150 bags of red chillies as parcel goods on November 5, 1998 at the Varkala railway station facilitating evasion of sales tax. Intelligence Officer, Commercial Taxes had then sent a letter dated December 10, 1998 to the first petitioner informing about the non-co-operation of the station master and also questioning the legality of the direction of the Commercial Manager, Southern Railway not to comply with the directions of the Commercial Taxes Department of Kerala. The steps taken to serve notice adopting the procedure contained in Order V, rule 27 of the Code of Civil Procedure was also informed. Third petitioner was later served with an order dated May 14, 1999, imposing penalty of Rs. 36,400 under section 45A(1)(g) of the Sales Tax Act stating that he had deliberately contravened section 29A(4) of the Sales Tax Act which led to evasion of tax amounting to Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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, authorisation should be insisted on. 3.. The authorised officers of the Sales Tax Department are entitled to inspect goods and records in the custody of the railways at any office, godown, or place, except when the goods are on train in the course of transport. Railway Officers are bound to comply with all instructions of the Sales Tax Officers in regard to detention, seizure and confiscation of goods and for violations, the sales tax authorities are free to take appropriate action including penalty under section 45A(1)(g) and (h) of the Act. Penalty for violations as far as possible should be levied against officials involved and not against railways as illegal things done by the officers do not bind the railways and the immunity to officials for wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter dated April 25, 1985. Counsel also submitted that the Commercial Tax Officer has no jurisdiction to issue instruction under section 3(1A)(c) of the Kerala General Sales Tax Act so as to bind the officers functioning under the Railways Act. The Special Government Pleader for Taxes, Sri Raju Joseph, on the other hand, contended that the officials functioning under the Sales Tax Act have got the power to enter the railway premises for the purpose of inspection and search and also to require the railway authorities to furnish the details regarding the goods carried through railway or to insist that the goods can be transported only with the documents prescribed under sections 29, 30, etc. Learned counsel submitted that the railways being a forwarding agency are bound to submit returns as required under section 32. Counsel submitted that sections 30, 30A, 30B, 30E, 31 and 32 would show that the consignor/consignee and transporter have certain obligations to obtain permits or other documents of transport to be produced at the time of booking and the transporter shall also keep such documents until it is delivered to the consignee. The learned Special Government Pleader further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not forthcoming in the field and in certain cases instructions had been given by the railway authorities not to allow sales tax officials to take extracts from railway information and addresses furnished were found to be false. A committee was constituted with the Sales Tax Commissioners of some States and the representatives of the Ministries of Finance and Railways. The following were the terms of reference of the committee which are given below for easy reference: (i) examine the modus operandi of sales tax evasion in respect of goods carried by rail; (ii) identify the major items involved and the estimated loss in revenue; (iii) study the provisions in Railways Act, Rules, Orders and Instructions issued by the Ministry of railways and recommend amendments/modifications required to regulate the consignment of goods through rail to check evasion of sales tax; (iv) suggest suitable measures for effectively checking the problem of evasion of sales tax revenue through bogus rail bookings and also recommend adequate mechanism for future co-operation and liaison between the sales tax authorities of the States and the Union Territories and the railways on a permanent basis; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion masters/goods supervisors of the station concerned are authorised to permit State Government officials to take extracts from railway records. Instructions also exist that the staff should extend maximum possible co-operation to authorised sales tax officials in this regard. Railways also do not object to authorised sales tax officials visiting goods sheds/parcel offices for contacting consignors/ consignees to obtain information from them. In the reply affidavit filed by the Railways in W.A. No. 1715 of 2005 it is stated as follows: Thus the railway officials concerned have been permitting the sales tax officials to collect the details of consignments/consignors/ consignees, etc., from the railway records maintained in the railway goods/parcel offices. All facilities were also being given to effect seizure of the goods suspected of tax evasion, as provided for under section 93 of the Railways Act . . . All the same it is submitted that the railways have no objection in respect of sales tax officials invoking the power of seizure of goods/ parcels suspected of tax evasion and arranging to remove the same from railway premises against proper receipt and execution of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eight and the number of packages stated therein. Section 66 empowers the officer to require statement relating to the description of goods. Section 74 states that the property in the consignment covered by a railway receipt shall pass to the consignee or the endorsee, as the case may be, on the delivery of such railway receipt to him and he shall have all the rights and liabilities of the consignor. Railway administration shall deliver the consignment under a railway receipt on the surrender of such railway receipt. Where railway administration delivers the consignment to the person who produces the railway receipt, it shall not be responsible for any wrong delivery on the ground that such person is not entitled thereto or that the endorsement on the railway receipt is forged or otherwise defective. Chapter X deals with special provisions as to goods booked to notified stations. Chapter XI deals with responsibilities of railway administrations as carriers. 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 those mentioned in clauses (a) to (i) of section 93. Cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place of similar nature notified in this behalf by the Government any consignment of such goods as may be notified by the Government in the gazette exceeding such quantity or value as may be prescribed, except in accordance with such conditions as may be prescribed. Section 30C enables the officer to confiscate the goods. Section 32 states that every clearing and forwarding house or agency, transporting agency, shipping agency, shipping out agency or steamer agency in the State shall submit to the assessing authority of the area such returns as may be prescribed of all goods cleared, forwarded, transported or shipped by it. The assessing authority concerned shall have the power to call for and examine the books of account or other documents in the possession of such agency with a view to verify the correctness of the returns submitted, and the agency shall be bound to furnish the books of account or other documents when so called for. The contention was raised that railway is a transporting agency as per section 32 and therefore duty-bound to submit to the assessing authority returns of all goods cleared, forwarded, transported by it and that the assessing officer has got the power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough railways have suffered tax under the Sales Tax Act or Central Sales Tax Act. That responsibility is not on the railways since they have to act only within the four corners of the Railways Act and the Rules framed thereunder. Large volume of goods are being transported through railways through goods trains as well as passenger trains and at times passengers themselves may carry goods. It is not the responsibility of the railways to check whether the goods so transported have suffered sales tax or Central sales tax. The direction given by the sales tax authorities to the railways to detain the goods on the ground that some of the goods have not suffered sales tax is not legal a function the sales tax authorities have to discharge. Sales tax authorities have got the right to seize the goods from the premises of the railway station as well as from the platform of a railway station since that area would fall within the expression place of business under section 2(xviii) of the Sales Tax Act. Once it is detained or seized by the sales tax authorities they could take away the goods on executing indemnity bond in favour of railways. Every transport of goods must be accompanied by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 995] 98 STC 233; [1995] 1 KLT 809 and M.R.F. Limited v. Assistant Commissioner (Assessment) [2006] 148 STC 212 (Ker) (Writ Appeal No. 628 of 2003), etc., and this court held that it is for the proper administration of the Act and to supervise the officers functioning under the Sales Tax Act power has been conferred on the Commissioner of Commercial Taxes. In such circumstances, the direction given by the learned single Judge that the railway officials are bound by the direction of the Commissioner of Commercial Taxes issued under section 3(1A) of the Kerala General Sales Tax Act is set aside. We may however point out that it would be open to the sales tax officials to establish sufficient check-posts near the various railway stations in the State so as to prevent illegal transportation of goods through railways. Sales tax officials functioning under the Act have also got the right to inspect any goods which are being carried through railways from the goods shed. They have also got the right to detain the goods and take possession on giving indemnity bond. Learned Additional Solicitor General has assured that the railway officials would co-operate with the officials of the Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
