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TMI Blog2005 (7) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... n case of undervaluation of goods to evade tax. (1) Where in respect of goods liable to tax under this Act, carried in a goods vehicle or boat or held in stock by any dealer or on his behalf by any other person or held in custody of any transporter, the assessing authority or any officer empowered under section 28 or 28-A, has reason to believe that the value shown in the document accompanying the goods in transit or the purchase invoice, is lower than the prevailing market price or fair market value or MRP by a difference of thirty per cent or more, such authority or officers, for reason to be recorded in writing, may purchase such goods. (2) The power under sub-section (1) shall not be exercisable unless the person or dealer being dispossessed of such goods, is afforded reasonable opportunity of being heard. (3) The price payable for purchase of such goods shall be the total price as mentioned in the invoice, challan, delivery note, stock transfer memo, or any other related document plus the cost of transportation of the goods incurred up to the time of purchase, if any. (4) In determining whether or not the price shown in the invoice, challan, delivery note, stock trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the provision enables deprival of property; that the provision for compulsory purchase of goods in an enactment like the Sales Tax Act, does not fit into the scheme of the Act, etc., apart from urging several other grounds. However, it is also noticed that with the change over to Value Added Tax (VAT) system and the number of items or goods left with for collection of revenue under the Act being far and few and the goods involved in the present case, viz., supari being not one covered for liability of tax under the Act any further, it may not be very necessary to examine the constitutional validity of such provisions in the context of the present conditions. One another reason is that as the petitioners had also impugned the validity of the orders and even a cursory scrutiny into the legality and correctness of these orders has revealed that they are suspect and if the orders themselves are not sustainable, the question of examining the constitutional validity of the provisions of section 29-AAA of the Act does not arise in these petitions. So far as the traders are concerned, the provisions of section 28-AAA are quite drastic in nature in the sense that the goods in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore the impugned orders deserve to be quashed. Ms. Niloufer Akbar, learned Additional Government Advocate, supports the orders. Learned Government Advocate submits that the power has been exercised as it was warranted in the case; that on verification it has been found that the goods, in fact, had been undervalued to the extent of 50 to 60 per cent; that in itself shows not only justification but the necessity for exercising the power; that the officers had acted in the interest of the Revenue and for the purpose of plugging the leakage of revenue; that the action does not call for any interference in exercise of writ jurisdiction and therefore the writ petitions deserve to be dismissed. Respondent-department has also filed statement of objections and additional statement of objections. I have been taken through them. While the petitioners have raised a specific ground that the respondents have not conformed to the requirement of rule 52 of the Rules, learned Additional Government Advocate points out that this averment has been met in para 13 of the additional statement of objections filed today before the court. Para 13 of the additional statement of objections reads ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the officers issued notice and after waiting for the allowed time, the officer concerned has passed the orders on December 1, 2004 and in terms of the order at annexure G, exercising power under section 28-AAA ordered purchasing the goods in question on the premise that it has been undervalued beyond the permitted margin, i.e., a margin of more than 30 per cent. Assuming for argument's sake that the reason or justification for invoking the power under section 28-AAA was formed by the officer concerned during the course of inspection of the intercepted vehicle and while conducting physical verification of the quantity and quality of the goods and thereafter further action for exercising the power under section 28-AAA should be necessarily taken under the control and supervision of the Joint Commissioner of Commercial Taxes and the Commissioner of Commercial Taxes, unfortunately, the record does not indicate any steps in this direction. The record, in fact, indicates that the permission for compulsory purchase was taken post facto in terms of the communication dated December 3, 2004, i.e., much later than the initiation of the proceedings under section 28-AAA and actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in cases relating to W.P. Nos. 48229, 48231 and 48233 of 2004, the department in turn had sold the goods and it had already paid the amount to the persons from whom the goods were taken over and the net proceeds of the sale of goods compulsorily purchased from the petitioners is a sum of Rs. 9,70,250 in respect of petitioner in W. P. No. 48229 of 2004, Rs. 9,71,127 in respect of petitioner in W.P. No. 48231 of 2004 and Rs. 10,36,420 in respect of petitioner in W.P. No. 48232 of 2004. Learned Government Advocate also submits that the department is in the process of taking other action as against the petitioners inasmuch as it has noticed that in some cases, the consignees were not in existence; that the transactions were not genuine, etc. This submission is strongly refuted by the learned counsel for the petitioners. Be that as it may, it is not necessary to go into such controversy. While the net proceeds of the sale of the goods, which have been compulsorily purchased, has now to be restored to the petitioners, in the absence of the very goods, direction is issued to the respondent-department to return the amount referred to in respect of each of the petitioners in W.P. Nos. 48 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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