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TMI Blog2008 (3) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... hich he calculated applying the basis indicated in the second proviso to sub-section (5) of section 16D and entry tax leviable on entry of such goods into local area of Cuttack without seizing and confiscating the goods loaded in the vehicle. The revisional authority has rightly upheld such order of the STO. Appeal dismissed. - W.P. (C) Nos. 13123, 13124 of 2004 - - - Dated:- 3-3-2008 - GANGULY A.K. C.J. AND MAHAPATRA B.N. , JJ. B.N. MAHAPATRA J. Both the writ petitions have been filed by the petitioner, Indo Arya Central Transport Ltd. In W.P. (C) No. 13123 of 2004 challenge is made to the order dated August 17, 2004 under annexure 1 passed by the Additional Commissioner (Central Zone), Orissa, Cuttack (hereinafter called as, the revisional authority ) in upholding the order dated November 16, 2002 (annexure 8) passed by the Sales Tax Officer, Cuttack I, West Circle, Cuttack (hereinafter referred to as, the STO ) by which direction has been given to the petitioner-company to pay the total sum of Rs. 90,152 without passing any assessment order as contemplated under second proviso to sub-section (5) of section 16D of the Orissa Sales Tax Act, 1947 (hereinafter referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Industrial Estate, Bhubaneswar, the vehicle instead of unloading the goods at Bhubaneswar came to Cuttack. On being interrogated the driver of the vehicle stated that as per the instruction of the transport-company he had come to Cuttack to deliver the goods in Cuttack. In this connection he handed over a slip which indicated that the delivery of the goods was to be made to M/s. Bharat Sales Syndicate, Banka Bazar, Cuttack, with the telephone number of the said party written thereon. The driver during the course of interrogation handed over some telephone bills obtained from telephone booths which clearly indicated that the telephone calls were made by the driver to the telephone numbers of the concerned transport company at Cuttack and also to the telephone numbers of the party at Cuttack to whom the delivery was to be made. On detailed verification of documents produced by the driver, the inspecting officers came to know that the goods were meant to be delivered to M/s. Bharat Sales Syndicate, Banka Bazar. Thereafter the STO detained the vehicle and stating the above facts issued show-cause notice to the transport office through the driver in-charge of the goods vide office lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aft and deposited the same before the STO, Cuttack. After receipt of the bank draft, the STO released the said vehicle and returned the original document, which was seized by him, to the driver of the said vehicle. The revisional authority passed a common order on August 17, 2004 while disposing of the aforesaid two revision cases bearing Nos. CUI-184/20022003 and CUI-186/2002-2003. The petitioner being aggrieved by the aforesaid revisional order has filed the above two writ petitions; one is against the order dated August 17, 2004 passed in Revision Case No. CUI-186/ 2002-2003 and another writ petition against the order passed in Revision Case No. CUI-184/2002-2003. This court, while disposing of the said writ petitions, passed following order on January 18, 2005: Both the writ petitions were taken up together for hearing and final disposal with the consent of learned counsel for the parties, as they are identical in nature. Heard learned counsel for the petitioner and the learned Senior Standing Counsel for the Department. Perused the records in revision cases and the records of Sales Tax Officer, Cuttack I, West Circle, Cuttack. The petitioner in this writ petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e impugned order passed by the revisional authority. Hence the impugned judgment is set aside and the writ petitions (Nos. 13123 and 13124 of 2004) are ordered to be restored. We direct the High Court to dispose of the writ petitions in accordance with law. Now, on the basis of the honourable Supreme Court's order, following questions arise for consideration: (i) Whether the transporter is liable to pay sales tax if he is not a dealer? If so, to what extent is his liability? (ii) What is the effect of failure on the part of the transporter to account for the goods he is carrying and whether the STO is justified in demanding Rs. 90,152 from the petitioner to avoid seizure of goods and the revisional authority is also justified to uphold such order of the STO? The learned counsel for the petitioner strenuously argued that the transporter is not liable to pay Orissa sales tax as it is not a dealer as defined under the OST Act. There is also constitutional bar for imposing sales tax on the transporter. There is no provision in the OST Act and the Rules framed thereunder for making an assessment on a transporter as provided under the second proviso to sub-sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned counsel appearing on behalf of the opposite parties submitted that as per the invoices raised by the seller and the departmentsupplied way-bills, the goods were to be delivered to the consignee, M/s. Ashirbad Prakashan Pvt. Ltd., Mancheswar, Industrial Estate at Bhubaneswar. Instead of doing so, the goods had been brought to Cuttack in the vehicle. The destination of the goods, as evident from the consignment note and the lorry challan, was also to Cuttack. Further the statement of the driver of the vehicle and from the slip handed over by the driver to the inspecting officer revealed that goods were to be delivered to M/s. Bharat Sales Syndicate, Banka Bazar, Cuttack. On the basis of the above facts, learned counsel submitted that the movement of goods from Tamil Nadu for delivery to a party at Banka Bazar, Cuttack was not accounted for in any document and records of the transporter as required under section 16D of the OST Act. The vehicle was standing at Ganesh Ghat, Cuttack to deliver the goods to Bharat Sales Syndicate, Banka Bazar, Cuttack. Thus, there was reason to suspect that the transporter was attempting to evade legitimate tax due to the Government by contraven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er date of show-cause being November 12, 2002 was extended to November 15, 2002 on the request of the petitioner, but the petitioner did not give any reply to the show-cause notice dated November 6, 2002. In the absence of a show-cause reply, the STO passed the impugned order on November 16, 2002 under annexure 8. With the above submission, learned counsel concluded that it could not be said that the principles of natural justice have been violated and prayed for dismissal of the two writ petitions. A transporter who is exclusively engaged in the activity of transporting goods from one place to another is certainly not a dealer as defined in section 2(c) of the OST Act. He is not assessable to tax under the Sales Tax Act in respect of goods he carries as a transporter. Dealer as defined under section 2(c) of the OST Act is closely inter-related to the ingredient constituting the essentials of business. Only a person who carries on the business of purchasing, selling, supplying or distributing goods directly or otherwise for cash or deferred payment or for commission, remuneration or other valuable consideration can be treated as a dealer. A transporter who is not involved in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to know what is contemplated in section 16D of the OST Act with regard to transporter. Section 16D is reproduced below: 16D. Production and inspection of accounts and documents in certain cases. Without prejudice to the provisions contained in sections 16A and 16B, where a transporter or a bailee or the owner or lessee of a warehouse to whom goods are delivered for transmission keeps such goods, before delivery thereof is taken from him, in any office, shop, warehouse, godown, vessel, boat, receptacle, vehicle or any other place, the Commissioner shall have the power to enter into and search such office, shop, godown, vessel, receptacle, vehicle or other place, as the case may be, and to examine the goods and inspect all records relating thereto and, in every such case, the transporter, bailee, owner or lessee of the warehouse or the person-in-charge of such goods and records shall give all facilities for such examination and inspection and shall produce the bills of sale or such other documents as may be required relating to the goods and give his name and address and the name and address of the transporter, bailee, owner or lessee of the warehouse or the person-in-charge of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the owner or lessee of a warehouse, which are found in any office, shop, godown, vehicle or vessel or any other place while in transit but not accounted for by the transporter, bailee or the owner or lessee of the warehouse, as the case may be, in his accounts, registers and other documents maintained in respect of such goods: Provided that before taking action for the confiscation of goods under this sub-section, the Commissioner shall give the person affected an opportunity of being heard and make an enquiry in the prescribed manner: Provided further that where the person affected makes payment to the Commissioner the amount of tax at the appropriate rate payable in respect of such goods to be assessed in the prescribed manner with a penalty equivalent to 20 percentum of the value of the goods seized, the goods and the vehicle seized as aforesaid shall be released. Under section 16D(1) every transporter is required to maintain correct account of goods received for transport, transported or delivered. The Commissioner is authorised to enter into and search any vehicle and examine goods kept therein and inspect all records relating thereto. The transporter is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very clearing, booking or forwarding agent or any other person transporting goods who during the course of its business handles documents of titles to the goods for or on behalf of any dealer or person holding certificates under section 14 of the said Act to furnish to the prescribed authority true and complete accounts, register, documents, etc. The said section also provides for levy of penalty at the rate of three times of tax calculated on the value of the goods in respect of which no particulars or information have been furnished under section 42(1) of the Act or no cash memo or challan has been produced before the competent authority under section 42(3) or Rs. 1,000, whichever is greater. The said section empowers the appointed authority to enter and search any place of business of any dealer if he has reason to believe that any dealer is attempting to evade tax or that any person transporting goods for any other person who has kept his accounts in such a manner as is likely to cause evasion of tax. As per the accepted norms of taxation the jurisdiction whatever is ancillary or subsidiary provision necessary for achieving the object of a tax statute is covered by entry 54 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ters to maintain true account of the goods they carry for transportation purpose as required under section 16D of the OST Act. Failure to maintain such account will lead to seizure of goods and vehicle and seizure and confiscation of the goods carried by them. This can be avoided if the person affected for such seizure and confiscation makes payment to the Commissioner of the amount of tax assessable in respect of goods carried and penalty equivalent to 20 percentum of the value of the goods carried. The petitioner challenges the action of the STO demanding Rs. 90,152 from the petitioner for release of the vehicle along with goods. According to him, in absence of any rule for making assessment as provided in second proviso to sub-section (5) of section 16D of the OST Act, the tax and penalty amounting to Rs. 90,152 as demanded by the STO from the petitioner is not sustainable in law. In support of his contention he relied on the judgment of this court in W.P. (C) No. 2774 of 2007 in Larsen Toubro's case [2008] 12 VST 31 (Orissa) and the judgment of the honourable apex court in Govind Saran's case [1985] 60 STC 1. The learned counsel for the petitioner has advanced his en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isional order, learned counsel for the petitioner submitted that opposite parties have admitted the fact regarding non-prescription of the manner for making assessment on the transporter. This assertion of the learned counsel for the petitioner is without any basis. On the other hand, the revisional authority in paragraph 32.2 of this order categorically held that levy of penalty, OST and surcharge under the OST Act was made keeping in view proviso to sub-section (5) of section 16D of the OST Act. Apart from the above, in paragraph 18B of the counter it is stated that the petitioner has entirely misconceived the provision under section 16D(5) of the OST Act which is a section meant for prevention of evasion of taxes rather than a regular assessment of tax. The provision of section 16D(5) is concerned with arresting the mischief of evasion of taxes through a transporter. The decision of this court in Larsen Toubro Limited [2008] 12 VST 31 (Orissa) in W.P. (C) Nos. 94 and 2774 of 2007 and decision of the honourable Supreme Court in Govind Saran Ganga Saran [1985] 60 STC 1 relied upon by the petitioner have no application to the present case of the petitioner since sub-section (5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vading legitimate tax due to the State. The further claim of the petitioner for inspection of record and crossexamination of any person and violation of principle of natural justice is not supported by any reason whatsoever. Copies of all documents were handed over to driver of the vehicle. The petitioner was supplied with the certified copies of the complete statement recorded from different persons. Copies of order sheet of the record of proceedings were also given as applied for. From these, the petitioner could find rebuttal evidence and could lead evidence to demolish the case against it. The petitioner's grievance that it did not have copy of full documents before asking it to make payment of Rs. 90,152 for releasing the vehicle is really of no consequence because all the documents supplied as per its request were pressed into service by the petitioner before the revisional authority and also this court. But it could not be shown as to how the documents which were supplied lent any support to the petitioner. On the other hand, the petitioner voluntarily made payment of Rs. 90,152 on November 18, 2002 to get the vehicle and goods released. Moreover, before passing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the goods of any transporter, which is found in the vehicle or vessel or any other place while in transit, but not accounted for by the transporter in his account register and other documents maintained in respect of such goods. Admittedly, in this case the goods brought to Cuttack for delivery to M/s. Bharat Sales Syndicate, Banka Bazar, Cuttack, were not accounted for in any account, register and other documents maintained by the transporter. On the other hand, the invoice issued by the seller and the way-bill utilised for transporting the goods showed some other name as consignee, i.e., M/s. Ashirbad Prakashan Pvt. Ltd., Macheswar, Industrial Estate, Bhubaneswar. Surprisingly, neither M/s. Bharat Sales Syndicate, Banka Bazar, Cuttack nor M/s. Ashirbad Prakashan Pvt. Ltd., Macheswar, Industrial Estate, Bhubaneswar, voluntarily came forward and appeared before the Revenue authorities who detained the vehicle and claimed ownership of the goods. The transporter itself is also not interested to produce the consignee before the sales tax authorities. In the State of West Bengal v. E.I.T.A. India Limited [2003] 131 STC 111, the honourable Supreme Court held (at page 120): . . . E ..... X X X X Extracts X X X X X X X X Extracts X X X X
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