Research › Search › Judgment

Madhya Pradesh High Court · body

2002 DIGILAW 948 (MP)

North Roadlines v. State of M. P.

2002-10-09

RAJENDRA MENON

body2002
Judgment ( 1. ) THE petitioner has filed the aforesaid petition and the prayer made is for quashing the order, Annexure P-3, dated 20-9-2002 by which the action is being proposed to be taken against the petitioner in exercise of the powers conferred under Section 45-C of the Madhya Pradesh Commercial Tax Act, 1994 (hereinafter referred to as the act ). Further prayer made is to direct the respondents to release the truck and goods of the petitioner, illegally detained with effect from 13-9-2002 and pay damages at the rate of Rs. 1,000/-per day for illegally detaining the truck and goods. ( 2. ) THE brief facts which are necessary for the disposal of the present petition are that the petitioner is a firm engaged in the business of transportation of goods by trucks. The petitioners owns a truck bearing registration No. MP-09/kc-1277. According to the petitioner the said truck was coming from Nagpur to Urai (U. P.), and was passing through Gwalior. In the said truck, goods were loaded which consisted of coconut and betel-nuts. According to the petitioner, coconuts were to be unloaded at Gwalior and betel-nuts were to be unloaded at Urai (U. P. ). While the truck was checked in the check post it was cleared and permitted to come to Gwalior. However, when coconut was being unloaded at Gwalior, the truck was again checked and after checking it was not allowed to transport the betel-nut to Urai (U. P.) on the ground that Form No. 31 was not accompanied with goods. ( 3. ) IT was the case of the petitioner that the respondent No. 4 was not having any power to stop the truck transporting the goods to Urai in the State of Uttar Pradesh. That being so, Form No. 31 is not required to be produced as it is to be produced in the State of Uttar Pradesh. It is contended by the petitioner that without any justification and without any reason, the respondent No. 4 detained the truck on the ground that it is not accompanied with Form No. 31 and issued letters, Annexures P-2 and P-3 respectively. ( 4. It is contended by the petitioner that without any justification and without any reason, the respondent No. 4 detained the truck on the ground that it is not accompanied with Form No. 31 and issued letters, Annexures P-2 and P-3 respectively. ( 4. ) IT is submitted by the petitioner that Form No. 31 will have to be produced at the check post of Uttar Pradesh as is mentioned in the consignment note, Annexure P-l and the said form is not required to be accompanied with the goods. That apart it is submitted that in exercise of powers conferred under Section 45-C of the Act, the respondent No. 4 does not have any authority or jurisdiction to detain the truck or the vehicle in question. The issuance of show-cause notice, Annexure P-3 is illegal and cannot be sustained. The case of the petitioner is that the respondents have no authority in the matter of detaining the truck on the ground that the betel-nut being carried to Urai, U. P. , without accompanying the Form No. 31. It was submitted that the truck of the petitioner carried with it invoice, bill and challan and all other necessary documents which were issued by the consignor of the goods and an endorsement was there on Annexure P-l that Form No. 31 will be produced at the U. P. , check post. It is further submitted that Rule 73-F of the Madhya Pradesh Commercial Tax Rules, 1995 deals with transit of goods by road through the State. According to the said rule, when the vehicle is coming from a place outside the State and is carrying goods to another State, Form No. 85 is to be given only to the Check Post Officer. The vehicle in question was accompanied Form No. 85 which was checked by the Checking Officer. In spite of this, the goods and the vehicle have been illegally detained. According to the petitioner, detention of the goods in the facts and circumstances of the present case is illegal and the respondents have no authority under Section 45-C of the Act. ( 5. ) REFERRING to provisions of Article 301 of the Constitution, it is argued by the learned Senior Counsel that the entire action in the facts and circumstances of the present is illegal. ( 5. ) REFERRING to provisions of Article 301 of the Constitution, it is argued by the learned Senior Counsel that the entire action in the facts and circumstances of the present is illegal. In support of his contention, he has placed reliance on certain decisions pertaining to Rajasthan Sales Tax Act and orders passed by the Rajasthan Taxation Tribunal at Jaipur to indicate that when the goods are in transit from one State to another. There is no question of evasion of tax in the intermittent stage and that is why penalty cannot be imposed. ( 6. ) REFUTING the aforesaid, learned Govt. Advocate contends that the truck was detained as it was not carrying all the documents relating to the goods in question. Form No. 31 under the U. P. Trade Tax Act, 1948 was not attached with the documents which is necessary to be carried with the goods. That apart, the truck was carrying goods to be unloaded in M. P. , i. e. y coconut and the necessary document, Form No. 75 was not duly filled and passed from check post. All these discrepancies were found when the truck was checked on 13-9-2002. It is put forth by him that the petitioner never disclosed the details of the goods. There was no mention by the petitioner in his statement that betel-nut is being carried by him. In violation of the provisions of the Commercial Tax Act and with regard to non-submission of Form No. 75 for coconut, the action has been taken and penalty of Rs. 45,000/- was imposed vide Annexure R-1. The petitioner has deposited the aforesaid penalty vide Annexure R-2 and it was during the aforesaid proceedings, for the first time it was disclosed that the truck is carrying betel-nut to be unloaded at Urai, U. P. That being so, the respondent No. 4 checked the documents of betel-nut. The petitioner submitted Form No. 85 along with builty xerox copy but the Form No. 31 as required under Section 28-A (2) of the U. P. Trade Tax Act, 1948 was not carried. In that view of the matter, certain doubts were created. On the explanation submitted by the petitioner with regard to the goods being carried to Urai, the matter was enquired into from the Trade Tax Officer, Special Investigation, II Unit, Jhansi. In that view of the matter, certain doubts were created. On the explanation submitted by the petitioner with regard to the goods being carried to Urai, the matter was enquired into from the Trade Tax Officer, Special Investigation, II Unit, Jhansi. The said authority vide Annexure R-4 informed the respondent No. 4 that after verification it was found that M/s. Jaishree Traders, Gopalganj, Urai for whom the consignment of betel-nut is being carried has closed its business since more than one year. The sales tax number mentioned in the consignment note is wrong. The said number did not belong to M/s. Jaishree Traders. It has also been revealed in the investigation that M/s. Jaishree Traders, Urai have contended that they have not booked or ordered any such consignment. Prima facie, therefore, it has been revealed that the petitioner is carrying betel-nut by forged documents and prima facie case of evasion of commercial tax has been made out. Therefore, the show-cause notice, Annexure P-3 has been issued to the petitioner. ( 7. ) ACCORDING to the respondents under the amended provisions of Sections 45-C and 45-A of the Madhya Pradesh Commercial Tax Act, 1994, action can be taken and in the present case as prima facie it revealed that the petitioner has committed irregularities, action is being taken for evasion of tax in the State of Madhya Pradesh. ( 8. ) IT has also been contended by the respondents that Annexure P-3 is only a show-cause notice and after the petitioner submits his reply to the same, a final decision in the matter has to be taken. Thereafter, against the final order that may be passed, the petitioner has remedy of filing an appeal or revision before the competent authority under the Act. In that view of the matter, it is contended that in the present case, no interference can be made by this Court. ( 9. ) I have heard the learned Counsel for the parties. ( 10. ) SHRI Roman, learned Senior Counsel during the course of arguments has emphasised that for violation of the provisions of the U. P. Sales Tax Act or for not carrying From No. 31, the respondent No. 4 and the authorities of the Commercial Tax Department of the State of Madhya Pradesh cannot take any action. ( 10. ) SHRI Roman, learned Senior Counsel during the course of arguments has emphasised that for violation of the provisions of the U. P. Sales Tax Act or for not carrying From No. 31, the respondent No. 4 and the authorities of the Commercial Tax Department of the State of Madhya Pradesh cannot take any action. The goods are in the course of transit and that being so, it is only for the authorities at the U. P. , check post who can take action. Taking me through the provisions of Sections 45-C and 45-A of the Act and Form No. 31 and Form No. 75, it is argued by him that the respondents have no jurisdiction to interfere in the matter. ( 11. ) MADHYA Pradesh Commercial Tax Act, 1994 has been amended vide Act No. 16 of 2002 which has been brought into force with effect from 12-8-2002. Accordingly, Section 45-C of the Act has been amended and in sub-section (1) the following words have been added :- ". . . . . With a view to prevent or check evasion of tax under this Act or verifying the correctness of a declaration furnished or preventing the furnishing of a false or incorrect declaration under Section 45 A shall be substituted; and" Similarly, sub-section (2) has been amended and now it reads as under:-" (2) If at the time of loading or unloading of goods, the officer finds after searching the vehicle and verifying the documents relating to the goods that,- (a) goods notified under sub-section (4) of Section 45-A are being transported in respect of which the transporter has not filed prescribed declaration at the check post or is not carrying with him the copy of the prescribed declaration; or (b) the declaration in respect of any goods is false or incorrect either in respect of the kind of goods or the quantity of goods or the value thereof, such officer may presume until the contrary is proved that an attempt was being made to facilitate the evasion of tax in respect of such goods and he may, after recording his reasons therefore in writing, a copy of which shall be forthwith supplied to the transporter, seize such goods or the vehicle along with the goods. (c) such officer seizing the goods or the vehicle along with the goods shall initiate action for imposition of penalty in accordance with the provisions of Section 45-A and for that purpose (i) he shall exercise all the powers exercisable by the check post officer under that section; (ii) he shall follow the procedure laid down therein; (iii) the provisions of that section shall apply mutatis mutandis to such proceedings. " ( 12. ) THEREAFTER, after Section 45-C, a new Section 45-D has been added and in Section 45-D, a specific provision has been made for the purpose of checking of goods in transit and a liability is cast on the transporter transporting goods by road from the State of Madhya Pradesh to any place outside the State or from any place outside the State to any place within the State of Madhya Pradesh, shall carry with him the copy of the declaration referred to in Sub-section (5) of Section 45-A in respect of the goods notified under Sub-section (4) of that section whether the check post or the barrier is established on such road or not. ( 13. ) A perusal of the aforesaid indicates that the competent officers of the Commercial Tax Department have been vested with the power to verify the documents relating to any goods and take action in case it is presumed by them that attempt is being made to facilitate evasion of tax. Section 45-C (2) (b) clearly gives power to the officer concerned to take action in such matter and has power not only to seize the goods but the vehicle also along with the goods. From the provisions of Section 45-C as amended from 12-8-2002, it is clear that the competent officer is empowered to take action in the matter. ( 14. ) PRIMA facie in the present case, the facts that have come on record clearly indicate that the petitioner is carrying betel-nuts to Urai, State of Uttar Pradesh and vide Annexure R-4, a prima facie case has been made out with regard to the genuineness of the transportation of the goods to the State of Uttar Pradesh. ( 14. ) PRIMA facie in the present case, the facts that have come on record clearly indicate that the petitioner is carrying betel-nuts to Urai, State of Uttar Pradesh and vide Annexure R-4, a prima facie case has been made out with regard to the genuineness of the transportation of the goods to the State of Uttar Pradesh. That being so, at this stage, the respondents have only issued the show-cause notice to the petitioner and the proceedings have been initiated for the purpose of finding out if there is any attempt on the part of the petitioner to evade the tax. ( 15. ) IN view of the above, the respondent No. 4 is competent enough in the facts and circumstances of the case to take action against the petitioner. In view of the amended provisions of Sections 45-C and 45-A of the Act as incorporated in the Act with effect from 12-8-2002, I am not inclined to interfere in the matter and the contention of the petitioner that the respondent No. 4 has no authority to inspect the documents is not correct. ( 16. ) PRIMA facie, on the basis of the material on record, as a case has been made out, it would not be proper for this Court to interfere at this stage and quash the proceedings. Further as the petitioner has been issued with a show- cause notice and initiation of proceedings being in conformity with the provisions of law, no interference at this stage in the matter could be made out. It would be for the petitioner to justify and submit his say in the matter and after considering the same, final orders are required to be passed by the competent authority. In the meanwhile, detention of the truck and the goods in question is in conformity with the provisions of the Act, no illegality can be found out in the same. At this stage, the respondents have only issued show-cause notice and they are proceeding to take action in the matter after giving opportunity to the petitioner. That being so, no interference can be made in the present case. ( 17. At this stage, the respondents have only issued show-cause notice and they are proceeding to take action in the matter after giving opportunity to the petitioner. That being so, no interference can be made in the present case. ( 17. ) THE contention of the petitioner that the respondents have no jurisdiction or authority to detain the goods, conduct search at the time of unloading or when the goods are in transit, no action can be taken in view of the provisions contained in Section 45-C reproduced hereinabove cannot be accepted. That apart, newly added provisions of Section 45-D also deals with the liability of the transporter in the matter of transporting goods. In that view of the matter, the argument of the petitioner that the respondents have no jurisdiction cannot be accepted. ( 18. ) THIS Court while issuing notice has passed an interim order on 25-9-2002 wherein it has been ordered that on the petitioner submitting adequate surety and undertaking, the truck in question shall be released. It was submitted by Shri Roman, learned Senior Counsel that the petitioner had submitted a surety and undertaking vide Annexure R-6 and Annexure R-7. But in spite of the same, respondents are demanding bank guarantee to the tune of Rs. 2. 00 lacs for releasing the truck. It is argued by him that the amount of Rs. 2. 00 lacs is on the higher side and even if the penalty is imposed, the same will not be beyond Rs. 2. 00 lacs. That being so, it is submitted that the truck should be released on the basis of the Annexure R-6 and Annexure R-7. ( 19. ) THE interim order passed by this Court clearly stipulates submission of adequate surety. Submission of adequate surety means surety which guarantees realisation of the penalty or amount, if any to be paid by the petitioner. That being so, the petitioner has to satisfy the competent authority with regard to the adequacy of the surety submitted by them. If the respondents are demanding bank guarantee for releasing the truck in question, it cannot be said that the action is illegal or incorrect in any manner whatsoever. The assessment of the value of the goods and other aspects of the matter at this stage cannot be interfered with by this Court. In the light of the aforesaid, I find no substance for interference in the petition. The assessment of the value of the goods and other aspects of the matter at this stage cannot be interfered with by this Court. In the light of the aforesaid, I find no substance for interference in the petition. ( 20. ) HOWEVER, so far as the release of the truck by the respondents is concerned, in the light of the order passed earlier by this Court on 25-9-2002, it is clarified that the release of the truck by the respondents shall be subject to furnishing the adequate surety that may be demanded by the respondents. ( 21. ) WITH the aforesaid, the petition is dismissed. ( 22. ) ACCORDINGLY, M. W. P. No. 831/2002 is disposed of.