State Taxation Tribunal - West Bengal
Bestley Goods Transport Corporation ... vs C.T.O./Duburdih Check-Post And Ors. on 22 August, 2002
Equivalent citations: [2006]146STC412(TRIBUNAL)
JUDGMENT
B.K. Lala, Judicial Member
1. This is an application Under C Section 8 of the West Bengal Taxation Tribunal Act, 1987 challenging the legality and validity of the seizure along with the order of penalty dated February 18, 2000 passed by the respondent No. 1.
2. The petitioner No. 1 is a transporter within the meaning of the West Bengal Sales Tax Act, 1994 and the petitioner No. 2 is one of the partners of the petitioner No. 1. On January 20, 2000 the vehicle No. WB 23/9272 while was carrying the goods of different dealers, intercepted at Duburdih check-post by the respondent No. 1. On demand the driver of the vehicle presented the way-bill relating to the consignment of goods but the respondent No. 1 refused to endorse the same without assigning any reason whatsoever.
3. On January 22, 2000, the respondent No. 1 seized some consignments of goods on the grounds that the consignors of those goods were non-existent and the relevant documents were fabricated and fake. The seized goods were subsequently released on January 24, 2000 when the petitioner No. 1 agreed to take custody of the seized goods.
4. On February 9, 2000, the petitioner No. 1, challenged the legality of seizure of the goods and on February 21, 2000 the petitioners received the orders under registered post passed by the respondent No. 1 and were asked illegally to pay penalty for the seized goods. The seizure by the respondent No. 1 was also illegal and arbitrary. The purported seizure and the orders demanding penalty thus, being unwarranted in law are liable to be set aside.
5. The respondents by filing affidavit-in-opposition denied the allegation of illegality of seizure. According to the respondents, the name and address of the consignor mentioned in the way-bill and purchase invoice could not be traced out. Since it was found that the declaration made in the way-bill was incorrect and untrue, the waybill was not endorsed according to law. Import of consignment of goods cannot be genuine if the basic document is found to be false and fabricated. Since the sale price is related with the cost price, the actual price of the goods paid at the time of purchase outside the A West Bengal, is a very relevant and important matter for the purpose of sales tax. Moreover, the purchase invoice raised by the consignor shows that the consignor charged Central sales tax at the rate of four per cent. No unregistered dealer can charge sales tax while making Central sale. At the time of seizure, an attempt was made to contact the consignor over telephone but none could be traced out. The goods since were being transported in violation of the provisions of Section 68 of the West Bengal Sales Tax Act, 1994 (hereinafter referred to as "the Act, 1994") hence those were seized.
6. On behalf of the petitioners it is submitted that Under Rule 212 c there is no provision that a transporter has to produce any other document except the way-bill at the time of entry into the West Bengal. Verification of correctness of invoice price is also contrary to the provisions of the Act, 1994 since the sales tax in West Bengal does not depend upon the invoice price of goods. Therefore, it is not within the power of the concerned authorities to enquire or verify as to whether the goods were undervalued or overvalued. There is also no provision under the Act that a consignee is bound to purchase the goods from a registered dealer outside the State.
7. Relying on the decision (Bhabanewar Singh v. Commercial Tax Officer) and referring the Sub-rule (9) of Rule 212 the learned lawyer submits that the respondent No.l is only empowered to verify the correctness of the way-bill so far it relates to description, quantity, weight or value of the goods vis-a-vis what is actually found in the consignment. It is also submitted that the honourable Supreme Court in a case of V.V.S. Sugars v. Government of Andhra Pradesh reported in [1999] 114 STC 47 held that the taxing statute must be interpreted as it reads--no addition or subtractions should be made on the ground of legislative intendment or otherwise. Referring the decision of this Tribunal reported in [2002] 126 STC 533 : (2001) 38 STA 84 (Ramesh Kr. G Jadav v. Commercial Tax Officer) it is also submitted that the purported seizure on the ground that the consignor is fake is wholly arbitrary. The respondent No. 1, thus, acted illegally by detaining the vehicle and seizing the goods. The order dated February 17, 2000 passed by the respondent No. 1 demanding penalty is, thus, illegal and without jurisdiction which are liable to be set aside.
8. On behalf of the respondents, the maintainability of the instant application has been challenged on the ground of defect of parties. The petitioners have no locus standi to file the instant application; it should, therefore, be dismissed summarily. It is further submitted that the petitioners if at all, are aggrieved by the orders of the respondent should have filed an appeal since the issue in controversy is based upon the factual errors. It is further submitted that the goods were rightly seized. There was a scope for evasion of tax since the price shown in the invoice was far less than the market price. Relying on the decision (McDowell & Company Limited v. Commercial Tax Officer) it is also submitted that the obligation of every citizen is to pay taxes honestly according to law and the petitioner tried to avoid it. It is further submitted that the consignor since was found to be nonexistent and fake person the invoice price entered in the way-bill shall also be presumed to be false. The provision of Sub-section (1) of Section 68 ensures that there should be no evasion of tax and no person should transport any consignment of goods except in accordance with the restrictions and conditions as have been prescribed. Since the taxable goods were being imported within West Bengal without a valid way-bill, the goods were rightly seized by the respondent No. 1. The seizure made is lawful and sustainable under law. The application, therefore, is liable to be dismissed.
9. The points for consideration, therefore, are:
(1) If the instant application is maintainable under law;
(2) If the petitioners before moving this Tribunal, are to prefer appeal against the impugned orders passed by the respondent No. 1; and (3) If the seizure is made in accordance with law.
10. On the question of maintainability, of this application we find from the relevant proceeding initiated for levying penalty, the respondents had made M/s. Matadin Sharma, C/o. Bestley Goods Transport Corporation, as a party to the proceeding. The relevant provisions of Section 72 of the Act, 1994 has not debarred the transporter from seeking relief in such a seizure case. The Explanation (a) of Section 72 reads as follows;
For the purposes of this section and Section 73,--
(a) 'transporter' means the owner, or any person having posses- H sion or control, of a goods vehicle who transports on account of any other person for hire or on his own account any goods from one place to another .
11. Therefore, the present petitioner being a transporter within the meaning of the Act is entitled to claim relief particularly when the goods were seized from his possession on the allegation of under-invoicing. We, therefore, cannot accept the contention of the A learned lawyer for the respondent that the present application is not maintainable under law on the ground that the petitioner has got no legal status to file this application.
11. The seizure if was made for violation of Section 68 read with Rule 212. The portions of the relevant section and the Rules, 1995 are quoted hereunder. The Section 68 states as follows:
Section 68(1): To ensure that there is no evasion of tax, no person shall transport from any railway station, steamer station, airport, port, post office or any check-post set up Under Section 75 or from any other place any consignment of goods except in accordance with such restrictions and conditions as may be prescribed.
(2)...
(3) Subject to the restrictions and conditions prescribed Under Sub-section (1) or Sub-section (2), any consignment of goods, may be transported by any person after he furnishes in the prescribed manner such particulars in such form obtainable from such authority or in such other form as may be prescribed.
12. Sub-rule (9) of Rule 212 speaks as follows:
The Commercial Tax Officer or inspector of a check-post empowered to endorse the way-bill in form 42 or such Assistant Commissioner or Commercial Tax Officer as the Commissioner may authorise to proceed Under Section 69 outside the check-post, may verify correctness of the description, quantity, weight or value of the goods of a consignment as mentioned in the accompanying way-bill with the description, quantity, weight or value which are actually found in such consignment.
13. The Sub-rule (9), thus, provides that the correctness of the description, weight and value of the goods of a consignment to be verified with respect to the accompanying way-bill. In a case of Bhabaneswar Singh v. Commercial Tax Officer reported in [2001] 122 STC 494 (Cal) their Lordships of the honourable High Court held as follows:
Thus the verification has to be made, as mentioned in the accompanying bill that the description, quantity, weight or value which are actually found in such consignment. It is, therefore, not for the assessing authority at that stage to verify the actual market value vis-a-vis the value mentioned in the way-bill although the same value had been mentioned in different documents accompanying the consignment". It is further held, "If by reason of under-invoicing the petitioner has not evaded any tax nor there was any scope therefor the question of assessing the value of the said goods did not arise.
14. The learned lawyer appearing before the honourable court on behalf of the Revenue also admitted at the time of hearing of the above mentioned case that no such provision was there for seizure in a case of under-invoicing if so noted in the way-bill. It is, therefore, the observation by their Lordships at paragraph 11 of page 500:
In the instant case as indicated hereinbefore it is accepted at the Bar that there does not exist any provision for seizure in the case of under-invoicing in the way-bill. Another aspect of the matter may also be considered. Different prices cannot be mentioned in different documents accompanying the consignment.
Therefore, in view of the findings made by the honourable court we are of opinion that under-invoicing cannot be the ground for seizure. The provisions of Sub-rule (9) of Rule 212 actually do not empower the check-post officer or such other officer to seize the goods on the ground of under-invoicing. It is the settled legal principle that the taxing statute must be interpreted as it reads with no additions and no subtractions on the ground of legislative intendment or otherwise: [1999] 114 STC 47 (SC) (V.V.S. Sugars v. Government of Andhra Pradesh). In a case of Ahmedabad Urban Development Authority v. Sharadkumar Jayantikumar Pasawalla reported in AIR 1992 SC 2038 it was observed, "It has been consistently held by this Court that whenever there is compulsory exaction of any money, there should be specific provision for the same and there is no room for intendment. Nothing is to be read and nothing is to be implied and one should look fairly to the language used".
15. In a case (Gurudevdatta VKSSS Maryadit v. State of Maharashtra) the apex Court held as follows:
It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless such construction leads to some absurdity or unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning. It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the courts are bound to give effect to that meaning irrespective of the consequences. It is said that the words A themselves best declare the intention of the law giver.
Therefore, the goods seized on the interpretation of Rule 212 that the invoice value of the goods is the relevant factor in the matter of verifying the correctness of the value is not proper and justified.
16. The next point for consideration is, if the allegation of non- existence of the consignor can be the ground for taking a presumption that the way-bill was improper and incorrect. It is submitted on behalf of the petitioner that there is no provision in the Act, 1994 which has fastened the petitioner with the liability to purchase goods always from a registered dealer. The goods, therefore, may be purchased even from an unregistered dealer and the Revenue in such a case cannot take a presumption that the consignor was non-existent and the way-bill and the relevant documents cannot be relied on. On behalf of the Revenue no such provision was also pointed out to hold that the purchase from an unregistered dealer shall make any transaction invalid taking presumption that the documents carried by the transporter in course of transportation were fake. It was also held by this Tribunal previously that alleged non-existence of a dealer cannot be the ground for holding that the documents were fake and invalid [2002] 126 STC 533 : (2001) 38 STA 84 (Ramesh Kr. Jadav v. Commercial Tax Officer), Learned lawyer for the respondents submits that even if it is accepted that the consignor was unregistered dealer then levying Central sales tax at the rate of four per cent is illegal.
But such illegality in our opinion, cannot be a ground for seizure.
17. The case of McDowell & Company Limited relied on behalf of the Revenue is not applicable in the present case since the present issue in controversy is not related to the payment of sales tax rather it is a case of seizure of consignment of goods on the allegation that there was an attempt of evasion of sales tax.
18. It is the submission of the learned lawyer for the respondents relying on the decision of the honourable Supreme Court in a case of Commissioner of Sales Tax v. P.T. Enterprises [2000] 117 STC 315 that the declaration of a consignor showing incorrect value of the goods with reference to the market value was held to be illegal and such consignor was subjected to penalty. On going through the facts of the case, we find that the Section 29-A of the Madhya Pradesh General Sales Tax Act, 1958 authorises the check-post officer to question the value of the goods carried by the transporter with reference to the market value which is not so under the provisions of the Act, 1994. No such power is vested with such officers.
19. Considering the facts and circumstances of the case and the relevant provisions of law and Rules we hold that the instant application should be allowed. The seizure is thus held to be illegal and invalid.
20. The application, therefore, is allowed without costs. The impugned seizure dated January 22, 2000 and the order dated February 17, 2000 passed by the respondent No. 1 and the notice dated February 18, 2000 are declared to be illegal and invalid and accordingly set aside.
A. Deb, Technical Member
21. I agree.