Gauhati High Court
Mr. Uttam Chetia (Chief Convenor) vs Union Of India & Ors on 8 January, 2015
Author: P. K.Saikia
Bench: P. K.Saikia
IN THE GAUHATI HIGH COURT
(THE HIGH COURT OF ASSAM, NAGALAND, MIOZRAM AND
ARUNACHAL PRADESH)
PIL 15/2013, 13/2012, 20/2012, 81/2012, 77/2012, 65/2014,
67/2014, 21/2014, 22/2014, 29/2014, 68/2014, 69/2014, 70/2014,
73/2014, 76/2014, and WP(C) 3151/2013, 4383/2013, 5642/2013,
3732/2013, 6468/2013, 6467/2013, 3957/2013, 355/2014, 767/2014,
757/2014, 1097/2014, 1091/2014, 1092/2014, 1120/2014, WP(Crl)
5/2013 and PIL 27/2014.
In PIL(suo motu) 15/2013.
In re
1) State of Assam represented by the
Commissioner and Secretary, Finance
department.
2) Director-General of Police.
Respondent.
PRESENT
HON'BLE THE CHIEF JUSTICE(ACTING)
HON'BLE MR JUSTICE P. K.SAIKIA
Date of hearing and judgment : 8.1.2015
JUDGMENT-AND-ORDER
The Saradha Group, a chitfund company, had been indulging in
large scale malpractices of defrauding subscribers! The Supreme Court
in WP(C) 401/2013(Subrata Chattoraj v. Union of India and others) and
413/2013 (Alok Jena v. Union of India and others) passed order directing
Central Bureau of Investigation(CBI) to conduct an investigation into the
affairs of the Saradha Group. In the said case it was brought to the
notice of the Supreme Court that the chitfund companies operating in
2
the states of Orissa, Tripura and Assam also had been indulging in large
scale malpractices of defrauding subscribers. The Supreme Court
directed that the affairs of the chitfund companies indulged in similar
fraudulent activities in the states of Assam and Tripura also should be
investigated by the CBI.
2. In para 23 of the above-said order the Supreme Court has made
the following observation.
"There is yet another dimension of the scam which cannot be
neglected. That the ponzi companies operated across State borders
is evident not only from the pleadings on record but also from the
submissions urged in the course of the arguments before us. What
is significant is that these companies and such other similar
companies indulged in similar fraudulent activities in the State of
Assam and Tripura also apart from Orissa where the depositors
have suffered. Looking to the nature of the scam and its inter-State
ramifications, cases registered in the State of Tripura have since
been transferred to the CBI for investigation at the request of the
State Government. A similar request has been made by the
Government of Assam which has, according to Mr Siddharth Luthra,
learned Additional Solicitor General, been accepted by the Central
Government who is shortly issuing notification under which cases
concerning the scam registered in the State of Assam shall stand
transferred to the CBI".
3. It is evident in the observation that the counsel who appeared for
the state of Assam has submitted to the Supreme Court that the CBI to
investigate the affairs of the chitfund companies operating in the state of
Assam. The Additional Solicitor-General(AS-G) has accepted the offer on
behalf of the Central government and undertook to issue notification
shortly by which cases concerning the scam registered in the state of
Assam would stand transferred to CBI and would be investigated by the
Central investigating agency. In this regard Sri PN Choudhury, the senior
retainer-counsel of the CBI, submitted that at the time when the
submission was made before the Supreme Court there were only fifteen
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cases in the state of Assam sent by the government for investigation, of
which notification had been issued in respect of four cases: however in
respect of 221 cases which are now registered in the state, it would not
be possible for the CBI to investigate because of constraint in human
resources. It is therefore submitted that a taskforce be constituted to
investigate the cases which are not taken up by the CBI for investigation.
It is said that a special taskforce headed by former head of the
anticorruption wing of the Guwahati chapter of CBI Sri HN Nath, who is
now Inspector-General in the Special Branch of the Assam Police, can be
constituted for effective investigation.
4. Sri Anirban Guha-Thakurata appearing for the Jeevan Suraksha
(JS) group of companies submitted that the Supreme Court directed the
CBI to investigate cases registered against the Saradha Group because of
their multi-state ramifications and of involvement of politically-influential
persons and in respect of JS no such peculiar circumstances are evident.
It is submitted that the bank accounts of the group have been freezed;
however the company is prepared to refund deposits to subscribers. The
investigation is already completed by the CID and five cases have been
registered against the directors of the company, therefore the question of
investigation of the cases by the CBI ~ at this stage ~ does not arise.
5. The counsel appearing for Rangdhalee Real Estate Consultants
and Developers(RRECD)(respondent 4 in WP(C) 1120/2014) submitted
that RRECD is not a financial institution, only a real estate company: it
has returned the money to subscribers. Charge-sheet is also filed against
the directors ~ only one of them had been in jail for seven months ~ of
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the company. Since the investigation is completed and chargesheets have
been filed, the question of investigation by the CBI does not arise.
6. The Advocate-General(A-G) gave a list of chitfund companies ~ and
in how many cases against them investigation pending, chargesheeted,
finally-reported, amalgamated, initiated, etc ~ indulged in malpractices of
defrauding subscribers in the state of Assam, which is extracted below
for convenient reference.
Company wise Break-up of cases relating to NBFCs
Sl. Name of Company
chargesheeted
t
submitted FR
amalgamated
No.
investigation
No. of cases
No. of cases
No. of cases
No. of cases
No. of cases
Total cases
initiated
pending
h d d
1. UNIPAY2U 9 9 2 1 21
2. Jeevan Suraksha Group 34 9 2 23 68
3. Basil International Ltd. 7 1 1 9
4. Rose Valley 7 7
5. Abyss Assam Real Estate Ltd 15 4 19
6. Daffodils Group of Companies 5 1 6
7. Prayag Group of Companies 8 8
8. Alliance Vision Marketing Pvt. Ltd 6 2 8
9. Saradha Group of Company 22 1 1 24
10 Rangdhalee Group 9 4 1 1 15
11 Abhilasha Real Estate and Marketing 3 1 4
Corporation Ltd.
12 Win India Construction and Real Estate (P) 2 1 3
Ltd.
13 Idol India Group of Companies 0 1 1
5
14 Silicon Project India Ltd 1 1
15 Unnayan Multi Marketing Ltd. 1 1
16 URO Agro India Ltd. 1 1
17 Prayag Biniyog Pvt. Ltd. 0 1 1
18 Rose India 1 1
19 Bageswari Selp Help Group 0 1 1 2
20 Diamond Valley Socio Economic 1 1
Developers (P) Ltd.
21 Diamond Valley Project & Developers (P) 2 2
Ltd.
22 Mudra 1 1 2
23 Mudra Devcon 4 4
24 Fortune Broking Solution (P) Ltd. 1 1
25 Live Vision Eco Development (P) Ltd. 1 1
26 Sambhav Real Estate and Developers Ltd. 1 1 1 3
27 Aastha & Aruhan Real Estate & 1 1
Construction Ltd
28 Jagaran Marketing Pvt. Ltd. 1 1
29 Cyber Tech Servicing Centre Kristal 0 1 1
Technoed India Ltd., Barpeta
30 Regal Info Tech Pvt. Ltd. 1 1
31 "Pan Associate" Lifetime Wellness 1 1
Developers India Ltd.
32 Furore Housing Finance & Investment 0 1 1
India Ltd.
33 Tower Infotech Ltd. 3 3
34 Eem Beem Real Estate and Construction 1 1
Ltd.
35 Ashirbad Marketing Self Help Group 0 1 1
36 Ashirbad Pvt. Ltd. 1 1
37 Laxmi Associates 1 1
38 Accresent Way Marketing (P) Ltd. 1 1
39 D&B Multi Marketing Pvt. Ltd 0 1 1
40 Jana Jeevan Suraksha Real Estate & 1 1
Construction Company Ltd.
41 Sanchayani/Arunodoya Saving & 0 1 1
Investment (India) Ltd.
42 Surachana Real Project Pvt. Ltd 1 1
43 Surachana Real Project Pvt. Ltd Company 1 1
44 Phenix Properties Ltd. Company 5 5
45 Rahul Hi-Rise 2 1 3
46 Bright Deal Company (P) Ltd. 0 1 1
47 Unique Entrade Pvt. Ltd. 0 1 1
48 Janabikash Marketing (P) Ltd. 1 1
49 Matribhumi Networking India Ltd. 0 1 1 2
50 Matribhumi Plus Tours & Travels 0 1 1
51 Cosmic Negotiators Pvt. Ltd. 2 1 3
52 Kiron Socio Economic Cultural Orgn. 0 1 1
53 Relation, HO-Karimganj 1 1
54 Relation Socio Economic and Cultural 1 1
Orgn.
55 Relation Allend & Service Ltd. 1 1
6
56 Support India Commercial (P) Ltd. 3 3
57 Lakhimi Multi Level Marketing Pvt. Ltd. 0 1 1
58 Seashore Group of Companies 0 1 1
59 Seashore Securities Ltd. 1 1
60 Kama NGO 0 1 1
61 Ashray Corporation Pvt. Ltd. 0 1 1
62 Cosmic Group of Company Ltd. 1 1
63 Weird Infrastructure Corporation Ltd. 1 1
64 Green Valley Consultancy Service (P) Ltd. 4 4
65 Kama India Project & Service Ltd. 2 2
66 Globex Finance Ltd. 0 1 1
67 Rainbow Multilink Marketing Pvt. Ltd. 0 1 1
Company
68 Good Life 0 1 1
69 Sun Valley Real Estate Ltd. 1 1
70 Group Agents' Orgn. For National 1 1
Encouragement
71 Cosmic Negotiation Company Ltd. 1 1
72 Sunayana Associate (P) Ltd. 1 1
73 Akata Commercial (P) Ltd. 1 1
74 Saibaba Commercial Marketing Company 0 1 1
(India) Ltd.
75 Red Carpet Entertainment (P) Ltd. 2 1 3
76 Kristal Marketing 1 1
77 Royal Farex Fund Online Investment 1 1
78 Monitor Group of Companies 2 2
79 Private Company 1 1
80 Bandhan Agro Industry Company Ltd. 1 1
81 H.I.C Project Ltd. 1 1
82 Thangman Agency 0 1 1
83 PHW Marketing Pvt. Ltd. 0 1 1
84 Sunrise Green Agro India Ltd. 0 1 1
85 Nile Agro International Ltd. and Nile 1 1
Project Ltd.
86 Himalaya Wing of Business 0 1 1
87 Ever Grow Capitals Pvt. Ltd. 2 2
88 Splendid Life 0 1 1
89 Zina Marketing (P) Ltd. 0 1 1
90 Norish Multi Trade (P) Ltd. 0 1 1
91 Brahmaputra Financial Agency 0 1 1
92 Bishal Multi Marketing Aarohan Plan 0 1 1
93 Arunoday Small Savings Fund 0 1 1
94 New VIP Marketing 1 1
95 Multi Marketing Sahayog Plan 0 1 1
96 Sahayog Plan 1 1
97 Amrit Project Ltd. 2 2
98 Society for Child & Women 0 1 1
Empowerment
99 Holy Faith Foundation 0 1 1
100 I Core E Service Ltd. 3 1 4
101 Nandini Ventures (P) Ltd. 2 1 3
102 PACL Ltd. 2 1 3
103 Assam Valley Group 2 3 5
7
104 Suraha Micro Finance Company 7 1 8
105 Union Co-operative Bank 0 1 1
106 Furore India Group of Companies 2 1 1 4
107 Angel Agrotech Group of Companies 1 1
108 Angel Agritech Ltd. 3 1 4
109 Reliable Multi Managerial Services Ltd. 0 1 1
110 NE Real Estate & Construction (P) Ltd. 1 1
111 Prativa Industries Ltd. 0 1 1
112 Naba Bikash Pvt. Ltd. 3 3
113 Suraksha Merchant Pvt. Ltd.
114 Golden Wings Multigrade Pvt. Ltd. 1
115 Ramesh Industries Ltd. 1
116 North East Region Finer Services Ltd
117 Suraksha Multi State Credit Co-operative 0 1 1
Society Ltd.
118 Forex Achievement 1 1
119 M/S. Vanshi Export Ltd. 2 1 3
120 TPHAF, NBC Company 0 1 1 2
121 Monsoon Marketing (P) Ltd. 4 1 5
122 Amar Khudra Sanchay, Kamrup Gramin 0 1 1
Khudra Binijyik Bikash Santha
123 Seba Real Estate Ltd. 5 5
124 Total Investment Solutions 1 1
125 Golden Agro Real Estate (India) Ltd. 0 1 1
126 Millennium Infra Project Ltd. 1 1 2
127 Friends Marketing 0 1 1
128 Maa Durga Security 0 1 1
129 Kiron Jyoti Project Developers Ltd. 2 1 3
130 Borail Properties Pvt. Ltd. 1 1 2
131 Advance Reality Project India Ltd. 1 1
132 Purusuttam Infotech Industries Ltd. 1 1
133 Sanmark Welfare Society 0 1 1
134 Assam Co-operative Insurance Ltd. 0 1 1
135 Sun Plant Business Ltd. 0
136 Arsh Deep Finance Ltd 0
137 Axes (Gold ornaments) 0 1 1
138 Banyan International Micro Finance 0
139 Sankardev Marketing (P) 0 1 1
Ltd/Kaziranga/My Dream Pvt. Ltd.
140 Safal Jeevan 0 1 1
141 VIP Marketing 0 1 1
142 VIBGYOR Real Estate (P) Ltd. 0 1 1
143 Reliance Money & VIBGYOR 0 1 1
144 Manipur Nupi Maruf Lottery 0 1 1
145 Coral Agro India Ltd. 1 1
146 Elora International Ltd. 1 1
147 Swadesh Construction and Real Estate Ltd. 1 1
148 MMMINDIA GROUP 1 1
149 NEEDS 0 1 1
150 Suncity Infracon Corporation India Ltd. 2 1 1 4
151 Samband Infrastructure Ltd. 1 1
152 Ramel Industries Ltd. 2 1 3
8
153 ASHWAS 0 2 2
154 Jeevan Suraksha Pulse India Ltd. 0 1 1
155 Sonali SHG Unnayan Samity, Khelmati 0 1 1
156 Heritage India (P) Ltd. 1 1 2
157 MPS Group 1 1
158 Public Installment Service Ltd. 1 1
159 Greenbang 1 1
160 Micro Insurance Company Sahay Sales 1 1
and Marketing Ltd.
161 LIC Micro Insurance Product "Jeevan 2 2
Madhur" and Sahay Sales and Marketing
Ltd.
162 Exotic Financial Consultancy 2 2
163 Social Economic Development & 1 1
Investigation Organization Under Legal
Right
164 Orchid Infra Projects & Services Ltd. 1 1 2
165 PAFL Industries Ltd. 2 1 3
166 Torsa Marketing 5 5
167 Evergreen Trading Co-operative Society 1 1
168 Bharat Krishi Sammridhi Co.(P) Ltd. 0 1 1
169 Social Development and Investigation 1 1
Registration
170 Velocity Agro India Ltd. 1 1
171 Sahodar Khudra Sanchay 1 1
172 Annex Infrastructure India Ltd. 1 1
173 Jeevan Samridhi Group of Company 0 1 1
174 Response Real Estate and Construction (P) 3 3
Ltd.
175 Real India Infra Project Ltd. 2 2
176 Unimass Agrotech India Ltd. 1 1
177 Taz International Real Tech Ltd. 1 1
178 Altrastic Agro Food Processing 1 1
179 Imasion Reforms Infrastructure Ltd. 1 1
180 Asoka Life Science Limited, Dhubri 1 1
181 Manas India Group of Company 1 1
182 Happy Life Sms Realtors Pvt. Ltd. 1 1
183 Wealth Line Promoters Pvt. Ltd. 1 1
184 Manas India Estate Developers
185 Jeevan Sanchay Parivar Nirman Ltd 0 1 1
186 Destimoney Securities Pvt. Ltd. 0 1 1
187 Tridev Organisation a Social Welfare 1 1
188 Amaze India Mercantiles Pvt. Ltd. 1 1
189 Win Real Con Finance Co. Ltd. 1 1
190 View Image Infotech (P) Ltd. 1 1
191 Sanchita Trading Co-operative Society 1 1
Ltd.
192 Andhra Pradesh Tata Finance Ltd. 1 1
193 Natureway Networking Marketing Pvt. 1 1
Ltd.
194 Utsha Microfinance 1 1
195 Win of Earth Group of Companies
196 Media 9th Creation 1 1
9
197 Aswas Project
198 Win Bricks & Tiles Ltd.
199 Win of Earth Marketing Limited 1 1
200 Ideas Group of Companies 1 1
201 Ideas Fund Manager Ltd
202 Brite Manpower Consultancy (BMC) 2 2
203 United Devcom. Ltd. (United Socio- 1 1
Economic & Welfare Organisation)
204 Socio Society for Development 1 1
205 Sunshine Global Agro Ltd. 1 1
206 Gramin Micro Finance 0 1 1
207 Pragatisheel Infra Project & Services Ltd., 1 1
Silapathar
208 Lucent Infra Developers Pvt. Ltd. 1 1
209 Life Care Realtors Pvt. Ltd. 1 1
210 Gainful Life Enterprise and Developers 1 1
Ltd.
211 Appeline (Basil International Ltd.) 1 1
212 Multi Level Marketing Companies 1 1
213 Falkon Group of Company 1 1
214 Sankar Azan Mission 1 1
215 Swasti Asha 1 1
216 Relax Pharma Sales Pvt. Ltd. 1 1
217 R.K. Global Shares & Securities 1 1
218 Eris Energy Ltd. 1 1
219 Siyaram Development and Constructions 1 1
Ltd.
220 BISON Group of Company 1 1
221 Kolkata WEIR Industry Ltd. 1 1
TOTAL 321 107 14 37 2 481
7. It appears that as many as 481 cases have been registered against
a total of 221 companies mentioned in the list.
8. The submission of the counsels for the respondents that a CBI-
investigation is not necessary and that a special taskforce be constituted
to investigate the chitfund cases appears to be untenable ~ so much so
the contention of the counsels appearing for JS and RRECD that since
charge-sheets have already been filed the question of investigation by the
CBI does not arise also appears to be tenable.
10
9. In view of the undertaking given by the state of Assam before the
Supreme Court that the cases registered in the state will be investigated
by the CBI and the acceptance of the offer by the AS-G on behalf of the
Central government that the Union government will issue notification by
which cases concerning the chitfund scam registered in the state of
Assam shall stand transferred to CBI and the Central Bureau of
Investigation is directed to investigate the cases concerning the chitfund
scam registered in the state of Assam against the companies shown in
the list(supra) given by the A-G. The CBI is also at liberty to conduct
further investigation in terms of section 173(8) of the Criminal Procedure
Code in the cases where charge-sheets have already been filed.
10. The writ petitions are disposed of in the light of above direction.
.
JUDGE JUDGE
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petitioner is a transporters' organisation. The goods coming from other states and bound for other north-eastern states have to pass through Assam. The entry check-posts in Assam are insisting production of the documents as contemplated in section 75(3) of the Assam Value Added Tax Act, 2003(AVAT Act). Rule 41(9)(iv)(a) of the Assam Value Added Tax Rules(AVAT Rules), 2005 declares that at every entry check- post, invoice, consignment-note manifesto of the transporter and the statutory documents of the importing state, if the goods are taxable in that state, transit pass of other relevant states and an application for transit pass have to be produced.
2. It is the contention of the petitioner that the insistence of statutory documents of the importing states as envisaged in Rule 41(9)(iv)(a) AVAT Rules is contrary to the provisions of section 76 of the AVAT Act. 12
3. It is submitted by the counsel for the petitioner Sri KN Choudhury, Sr Advocate that section 76 is an exhaustive provision that incorporates all the checks and balances to prevent evasion of tax in the state of Assam in the event the goods are not really intended to be transported to other states and surreptitiously later sold in Assam. There is a provision in section 76 that after the issuance of transit pass at the entry check-post if the endorsement of the exit check-post is not produced within thirty days the authorities will have every right to levy penalty and initiate all such necessary processes for recovery of tax, including the penalty. It is therefore submitted that when section 76 does not provide for production of statutory documents of the importing state the insistence on such production by Rule 41(9)(iv)(a) is contrary to the provisions of section 76.
4. It is further argued that Article 286 of the Constitution of India does not permit levy of tax by the state where the goods are transported for the purpose of carrying to other states. Article 301 of the Constitution of India declares that the inter-state commerce is free to all the territories of India. In the present provision(Rule 41(9)(iv)(a)) which insists on statutory documents of the importing state the albeit insisting security or the payment of tax in advance in the form of demand draft or bank guarantee is the violation of constitutional provisions and contrary to the provisions of section 76 of the AVAT Act.
5. The counsel further submits that the insistence on statutory documents was never invoked in the state of Assam where the Assam General Sales Tax Act was in operation. The provision if any in the state 13 was in "desuetude" in the light of the decision of the Supreme Court in Municipal Corporation for City of Pune and another v. Bharat Forge Co. Ltd and others, reported in (1995) 3 SCC 434. It is argued that when a provision of a statute is in desuetude it is not permissible to give effect to such desuetude provision at a belated length of time, therefore it is submitted that the insistence of statutory documents ~ alternatively the bank guarantee, or the payment of tax in advance by demand draft ~ is illegal, hence prayed for grant of interim order.
6. Per contra, Sri N Dutta, the senior counsel, submitted that the provision of section 75 of the AVAT Act envisaged production of necessary documents at the entry check-post for their verification whether it was a bona fide inter-state transport passing through the state of Assam. In that regard Rule 41 of the AVAT Rules envisaged production of the statutory documents of the importing states.
7. It is said that with the advent of Internet in all the states the access to the statutory documents online is available. The dealer who is importing goods would have to inform the tax authorities and such information is available online, therefore there is no difficulty for a genuine transporter whose goods are in transit and passing through the state of Assam for producing statutory document.
8. The argument that the provision for production of statutory documents was never informed and was in desuetude is also stoutly contested. The counsel relied on the judgment of the Supreme Court in Monnet Ispat and Engery Ltd v. Union of India and others reported in 14 (2012) 11 SCC 1. In para 201 and 202 of the said judgment the Supreme Court laid down that the doctrine of desuetude cannot be invoked merely because the provision was not enforced for a period of thirty years is not a ground to invoke the doctrine of desuetude.
9. Para 201 and 202 of the judgment in Monnet Ispat(supra) is quoted herein below for ready reference.
"201. From the above, the essentials of doctrine of desuetude may be summarized as follows :
(i) The doctrine of desuetude denotes principle of quasi repeal but this doctrine is ordinarily seen with disfavour.
ii) Although doctrine of desuetude has been made applicable in India on few occasions but for its applicability, two factors, namely, (i) that the statute or legislation has not been in operation for very considerable period and (ii) the contrary practice has been followed over a period of time must be clearly satisfied. Both ingredients are essential and want of anyone of them would not attract the doctrine of desuetude. In other words, a mere neglect of a statute or legislation over a period of time is not sufficient but it must be firmly established that not only the statute or legislation was completely neglected but also the practice contrary to such statute or legislation has been followed for a considerable long period.
Whether doctrine of desuetude attracted in respect of 1962 and 1969 Notifications
202. Insofar as 1962 and 1969 Notifications are concerned, I am of the view that doctrine of desuetude is not attracted for more than one reason. In the first place, the Notifications are of 1962 and 1969 and non- implementation of such Notifications for 30-35 years is not that long a period which may satisfy the first requirement of the doctrine of desuetude, namely, that the statute or legislation has not been in operation for a very considerable period. Moreover, State of Jharkhand came into existence on November 15, 2000 and it can hardly be said that 1962 and 1969 Notifications remained neglected by the State Government for a very considerable period. As a matter of fact, in 2006, the State Government issued a Notification mentioning therein about the reservation made by 1962 and 1969 Notifications. Thus, the first ingredient necessary for invocation of doctrine of desuetude is not satisfied. Secondly, and more importantly, even if it is assumed in favour of the appellants that 1962 and 1969 Notifications remained in disuse for a considerable period having not been implemented for more than 30-35 years, the second necessary ingredient that a practice contrary to the above Notifications has been followed for a considerable long period and such contrary practice has been firmly established is totally absent. As a matter of fact, except 15 stray grant of mining lease for a very small portion of the reserved area to one or two parties there is nothing to suggest much less establish the contrary usage or contrary practice that the reservation made in the two Notifications has been given a complete go by".
10. It is said that the provisions of section 76 do provide for collection of tax, levy or penalty, if the endorsement of the exit check-post is not produced; but, however as a preventive measure, Rule 41(9)(iv)(a) envisaged production of the statutory documents, which are available online.
11. With reference to the statistical data it is said that around one thousand vehicles come through the entry check-posts daily ~ which may come to Assam or go to other states. For the past fifteen days around 15,000 trucks would have passed through the entry check-posts. Around 250-300 trucks are stranded daily for want of statutory documents from the importing states. When others are complying there should be no good reason for the petitioners to seek exemption. In this regard Sri KN Choudhury insisted that the department should file an affidavit to corroborate the said statement.
12. Keeping in view the above submission we find that at this stage there is serious challenge to the validity of Rule 41 of the Assam Value Added Tax Rules, 2005, which insists production of the statutory documents of the importing states. There is always a presumpton about the validity of the statute unless it is rebutted. At this stage after hearing on the interim prayer we do not find any prima facie material to hold Rule 41 of the Assam Value Added Tax Rules, 2005 ultra vires the Assam Value Added Tax Act, 2003 and the Constitution of India. The contention 16 that the insistence on security or payment of advance tax by way of demand draft is a tax-collection-in-disguise violates Article 286 of the Constitution of India is not a tenable argument. Demand drafts are insisted only as a security to ensure that there is no misuse and violation of the provisions of the AVAT Act, in Assam. If a transporter is able to produce the endorsement of the exit check-post within one month, he would be entitled to refund. There is no hardship. The amounts would be refunded. Therefore it does not amount to collection of tax per se; it is only a preventive measure against the misuse. In that view of the matter we are not inclined to grant interim order at this stage. Accordingly the interim prayer is rejected.
JUDG CHIEF JUSTICE(ACTG.)
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