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2003 DIGILAW 159 (JK)

Oriental Good Transport Co. v. State Of J. &K.

2003-05-24

SYED BASHIR-UD-DIN, V.K.JHANJI

body2003
Per V. K. Jhanji, ACJ, (Oral) : Petitioners by this writ petition have challenged the vires of Section 15-B of the Jammu and Kashmir General Sales Act, 1962 (hereinafter referred to as the `the State Act), subjecting them to the provisions of the Act, and have prayed that the same may be declared as ultra vires the Constitution of India. 2. The case of the Petitioners is that they are transporters and are not involved either in the sale or purchase of any goods. They only transport the goods into and outside the State of Jammu and Kashmir and, therefore, the State Legislature had no authority and jurisdiction to enact any law in exercise of the power conferred under entry 54 List II of 7th Schedule of the Constitution of India. Further, according to them, the provisions contained in Section 15-B of the State Act, imposing obligation on the transporters, clearing and forwarding agencies, to obtain the Certificate of Registration in the prescribed manner from Dy. Sale Tax Commissioner of the area and also to submit prescribed returns to such authority of the goods transported, cleared or forwarded by them are ultra vires the Constitution. They also submit that the legislature had no power to provide for levying penalty on them or to launch prosecution against them if they failed to obtain the Certificates of Registration or to furnish returns, or furnished incorrect returns. It is also the submission of the petitioners that they are not dealers as per the provisions of the State Act and the object of the State Act being to deal with tax in respect of sale or purchase of the goods in the State, the provisions contained in section 15-B of the State Act, so far as the transporters are concerned are contrary to the object of the Act. 3. On the other hand, the case of the respondents is that it is within the power the appropriate Government to enact law or frame rules not only to regulate procedure to stop evading payment of tax or liabilities by traders and transporters. Further, according to them, sections 15-A and 15-B of the State Act have been enacted to effectively check the evasion of payment of tax or liabilities. It is stated that section 15-B does not suffer from lack of legislative competence. Further, according to them, sections 15-A and 15-B of the State Act have been enacted to effectively check the evasion of payment of tax or liabilities. It is stated that section 15-B does not suffer from lack of legislative competence. It has come in the counter of the State that between the period 1994-1995 to 1998-99, the Sales Tax Department seized as many as 35,167 vehicles and detected evasion of tax by the transport, clearing and forwarding agencies. It is further stated that out of these seizure cases as many as in 21,764 cases goods were got released by the transport agencies without appropriate release order in total contravention of the statutory requirements. According to them, it was also found that, in some cases, the goods booked by transport agencies for exempt region, like Ladakh, were actually delivered in tax regions, such as Srinagar, under fictitious firm names. It is only to curb this misuse and fraud of evasion of tax and consequential loss of revenue to the State that Section 15-A and 15-B have been inserted in the Act by Act No. XIII of 1978 and notified by SRO 297 dated 3rd May, 1980 and also Rules 40 to 49-C and Rule 70 were framed and Forms ST 32 to ST 35 were prescribed to keep check and vigilance on every transport agency, clearing and forwarding agency indulging in helping the dealers to evade tax or escape the liability of tax. 4. We have learned counsel at great length. 5. Broadly, the challenge made to the impugned provisions of the State Act is on three counts, viz., that since the object of the J&K General Sales Act, 1962 is only to provide for levy of general tax on the sale or purchase of goods in the State and since the transporters, clearing and forwarding agencies do not deal in the sale or purchase of goods, therefore, they could not be brought within the fold of the penal provisions of the Act ; secondly, that the impugned enactments are beyond the legislative competence of the State ; and thirdly, that the restrictions imposed or the obligations cast on them in terms of Section 15-B of the Act are violative of Articles 19(1)(g) and 301 of the Constitution of India. On the other hand, the sand of the respondents is that the impugned provisions of the Act have been enacted to effectively check the evasion of payment of tax or liabilities and that section 15-B does not suffer from lack of legislative Competence. 6. In order to appreciate the submissions made by the respective counsel, it is imperative to take notice of various provisions of the Act. 7. under section 2(g) of the State Act, dealer means any person who carries on the business of selling, purchasing supplying or distributing goods, directly or indirectly for cash or for deferred payment, or for commission, remuneration, or other valuable consideration and includes a governmental department carrying on such business. Section 4 of the Act is a charging section. Section 6 requires a dealer, who is liable to pay tax under section 4 of the Act, to register itself. Section 7 makes every dealer, who is liable to pay tax under the Act, to furnish return in the prescribed from of his turn over of a year to the assessing authority. Section 14 of the Act enjoins upon every dealer, who is liable to pay tax, to maintain books of accounts, including purchase and sales records. Section 15 empowers the Commissioner or the appellate authority or any other authority, to require any dealer to produce before him any accounts, registers or other documents or to furnish any information relating to the stock of goods, purchases, sales or deliveries of goods by the dealer or relating to any other matter as may be deemed necessary for the purposes of the Act. Under this provision of the State Act, a dealer is required to keep all these books and records open to inspection by such authorities at all reasonable by him in this behalf, is also empowered to enter, inspect and search any place of business of any dealer or any other place where he has reason to believe that the dealer keeps any accounts registers or documents in respect of his business. Under Section 15-A, Government is empowered to establish check post for inspection of goods in transit. Under Section 15-A, Government is empowered to establish check post for inspection of goods in transit. For carrying out the purpose of section 15-A, every transport agency, clearing or forwarding agency, in terms of section 15-B of the Act, is required to obtain Certificate of Registration and also to submit returns of goods transported, cleared or forwarded by it, It also gives power to the authority mentioned therein to call for and examine the books of accounts documents and other record in possession of such agency with a view to verifying the correctness of the returns submitted by it. For facility of reference, sections 15-A and 15-B are reproduced hereunder. "15-A Establishment of check posts and inspection of goods in transit.-- (1) If the Government consider that with a view to prevent or check evasion of tax under this Act in any place or places in the State it is necessary so to do they may by notification in the Government Gazette, direct the setting up of check posts at such place or places and notify the area of the Check Posts, (hereinafter referred to as the notified area), and erect barriers where necessary for the purpose of regulating the passage of goods across such notified area. (2) No person shall transport within the State across or beyond the notified area any consignment of goods exceeding such quantity or value as may be prescribed, by any vehicle or any other mode of conveyance, unless he is in possession of.- (a) either a bill of sale or delivery note or declaration or certificate of ownership containing such particulars as may be prescribed, and (b) a way bill in such form and containing such particulars as may be prescribed. Explanation. -- The term goods referred to in this sub-section shall not include luggage of persons who cross the notified area. (2A) Notwithstanding the provisions of sub-section (2), the Government may, in addition to the requirements under sub-section (2), by notification, require a person importing such goods, as may be notified from time to time, to furnish such declaration and in such manner as may be prescribed. (2A) Notwithstanding the provisions of sub-section (2), the Government may, in addition to the requirements under sub-section (2), by notification, require a person importing such goods, as may be notified from time to time, to furnish such declaration and in such manner as may be prescribed. 3 (a) In any notified area or at any other place, an officer in charge of the said area or the Commissioner or any other officer, not below the rank of Inspector, duty authorised by the Commissioner, may require.- (i) the driver or any other person in charge of the vehicle or any other conveyance, as the case may be, to stop the vehicle or conveyance and put it stationary, as long as may be necessary, for the purpose of examining the goods under transport and other contents of the vehicle including records relating to the goods which are in possession of the driver or such other person. (ii) any person in charge of a godown or any other premises of transport agency, clearing or forwarding agency, other than a rail head or a post office, to produce for inspection transport receipts, account books and other documents concerning the goods carried, transported, loaded, unloaded, consigned or received for transport maintained in the ordinary course of business and in the prescribed manner. (b) the Commissioner and any other officer referred to in clause (a) of this sub-section shall for the purpose of investigation have powers to.- (i) search the vehicle or conveyance and the driver or other person in charge of the vehicle or conveyance ; (ii) break, open any package or packages under transport in a vehicle or found in godown or premises of the transport agency of the clearing or forwarding agency ; (iii) examine on oath the driver or owner of the vehicle or conveyance of the person in charge of the transport agency or clearing or forwarding agency ; and (iv) seize the receipts, account books and other documents. Provided that before seizing he shall record the reasons in writing and make an inventory of the goods seized, a copy of which shall be handed over to the driver or owner of the vehicle or the person in charge of the transport agency or clearing or forwarding agency, as the case may be. Provided that before seizing he shall record the reasons in writing and make an inventory of the goods seized, a copy of which shall be handed over to the driver or owner of the vehicle or the person in charge of the transport agency or clearing or forwarding agency, as the case may be. The seized records shall be impounded, in the prescribed manner so long as their retention may be necessary for the purpose of this Act. (4)(a) The goods which are covered by sub-section (2), whether found in vehicle or other conveyance, or godown or any other premises of the transporter, clearing or forwarding agency, or any other place, but which are not supported by the documents specified in said sub-section, or if supported, such documents are fake, false or suspected to be fake or false in respect of the particulars contained therein, shall be seized by the officer in charge, notified area or any other officer referred to in sub-section (3), after recording reasons in writing and the owner of such goods shall be liable to penalty which shall be equal to double the amount of tax payable on such goods deeming the invoice value or market value thereof, whichever is higher, as sale price. Provided that the goods liable to seizure and or seized may, subject to the security furnished in the prescribed form for a value equal to the amount of maximum leviable penalty, be released. (b) No order of penalty under clause (a) shall be made unless the affected person is given a reasonable opportunity of being heard. The goods for the value equal to the amount of penalty or the security furnished under sub-section (4), as the case may be, shall not be released unless the amount of penalty levied is paid. (5) The Officer who detained or seized the goods may release them temporarily on cash or the prescribed security being furnished by the person concerned to the extent of the penalty leviable if such officer is satisfied, that it is necessary to do so in the public interest or such other circumstances and subject to such other conditions as may be prescribed. (6) Nothing contained in sub-section (4) or sub-section (5) shall apply in the case of goods transported, which are exempt from tax under any of the provisions of this Act without any conditions or restrictions. (6) Nothing contained in sub-section (4) or sub-section (5) shall apply in the case of goods transported, which are exempt from tax under any of the provisions of this Act without any conditions or restrictions. (7) No dealer or any person, including a carrier of goods or agent of a transporter or booking agency acting on behalf of a dealer shall take delivery of, or transport, from any vehicle or other conveyance, station, airport, or any other place, whether of similar nature or otherwise, any consignment of goods, the sale of which is taxable under this Act, except in accordance with such conditions, as may be prescribed, with a view to ensuring that there is not evasion of tax. (8)(a) The transport agency by whatever name called or owner or in charge of the vehicle, carrier, conveyance by whatever name called which has booked the goods referred to in sub-section (4) for transport and delivery to the consignee or to which is attached the vehicle which has carried or is carrying those goods, shall pay, by way of penalty, a sum not less than 20% but not more than 40% of the invoice value or the market value of such goods, which ever is higher. Provided that if the vehicle is not attached to any transport agency or the transport agency has no place of business in the State, a person deemed to be an agent of such transport agency available in the State or the owner of the vehicle, shall be liable to the said liability. Provided further before levying penalty, the affected person shall ordinarily be given an opportunity of not less the seven days, unless there are reasons to be recorded in writing a shorter notice, to prove to the satisfaction of the concerned officer that the lack of supporting documents specified in sub-section (1) or the fakeness or falsity thereof was not within his knowledge. A certified copy of the order of levying penalty or dropping the proceedings shall be issued to the said person. Provided further the vehicle, which has carried or is carrying goods without documents as specified in sub-section (2), shall not be released unless security equivalent to penalty leviable under clause (b) is furnished. The security thus furnished shall be adjusted against the penalty leviable or refunded after determining the liability or otherwise under clause (b) ; and Explanation. Provided further the vehicle, which has carried or is carrying goods without documents as specified in sub-section (2), shall not be released unless security equivalent to penalty leviable under clause (b) is furnished. The security thus furnished shall be adjusted against the penalty leviable or refunded after determining the liability or otherwise under clause (b) ; and Explanation. -- The lack of supporting documents or the fakeness or falsity thereof shall be deemed to be within the knowledge of the owner of the vehicle or conveyance if he, without reasonable cause, fails to comply with any of the requirements of the provisions contained in this section. (b) Where a transport company by whatever name called to whom goods are handed over on suparadnama, in accordance with the rules issued under the Act release such goods without obtaining the release order from the Competent Authority, such transport agency shall be liable to be penalty equal to double the amount of tax payable on such goods. (9) Where the taxable goods are transported on behalf of an unregistered dealer, or a registered dealer in whose registration certificate the goods imported are not covered, the officer in charge of the notified area check post or barrier, or any officer authorised under sub-section (3) shall detain and seize the goods, unless the dealer, the driver of the vehicle or conveyance or any other person in charge of the goods, furnishes security in the prescribed form for an amount equal to double the amount of tax payable on the market value or invoice value, whichever is higher, of such goods. The security thus furnished shall be adjusted against the tax penalty, interest, fee or any other sum that may be payable by such dealer under the provisions of this Act. The excess amount of security, if any, shall be refundable in the manner laid down in this Act. The provisions relating to detention and search of goods contained in this section shall, in so far as may be applicable apply under the sub-section. The excess amount of security, if any, shall be refundable in the manner laid down in this Act. The provisions relating to detention and search of goods contained in this section shall, in so far as may be applicable apply under the sub-section. Provided that if the said dealer fails to obtain a certificate of registration under this Act within a period of 180 days from the date of deposit of security and the Assessing Authority has no information in his possession that the dealer is carrying on regular business of selling taxable goods, the amount of security deposited shall be deemed to be the tax payable by the dealer and no claim for refund of such amount or any part thereof shall be entertained. (10) The officer referred to in sub-section (9) shall maintain a register in the prescribed form containing the names and addresses of the dealers, against whom action has been taken and such other particulars as may be prescribed. He shall also furnish such information in this behalf, as may be prescribed to the Dy. Sales Tax Commissioner having jurisdiction ever the place of business of the said dealer. (11) If the goods seized under sub-section (4) or sub-section (9) are not claimed within a period of 180 days from the date of seizure and in case of perishable goods in a lesser period as determined by the authority making the seizure, such goods shall be sold by auction in the prescribed manner and the sale proceeds thereof as reduced by the amount of penalty and security payable under this Act besides other expenses incurred on unloading handling and auctioning, shall be deposited in the treasury under appropriated head of account. This amount shall be refundable to the owner of such goods on an applications made in prescribed form and in prescribed manner within a period not exceeding 180 days from the date of auction. In case no claim of ownership is made within the said period, the amount shall be forfeited to the Government. No interest shall accrue on such amount. In case no claim of ownership is made within the said period, the amount shall be forfeited to the Government. No interest shall accrue on such amount. Provided that if the goods seized under sub-section (4) or sub-section (9) are handed over to a transport agency on suparadnama, the officer in charge referred to in the section shall transfer the goods with relevant documents for disposal to the appropriate authority having jurisdiction over the area, or any other officer authorised in this behalf by the Commissioner, who shall take cognizance of the cases referred to him and finalise them in accordance with the provisions of the Act as soon as he receives documents of seizure from the officer in charge of the area notified under this section. 15-B Forwarding Agency etc. to obtain certificate of registration and submit returns: (1) For carrying out the purpose of section 15-A, every transport agency, clearing or forwarding agency, having a place of business in the State and importing or clearing or forwarding goods on behalf of a dealer shall be required to obtain a certificate of registration in the prescribed manner form the Dy. Sales Tax Commissioner of the area in which it has place of business on payment of fee of Rs. 200/- and on furnishing of security not exceeding Rs. 5000/- in the manner as any be prescribed. (2) The agency referred to in sub-section (1) shall submit to the Dy. Sales Tax Commissioner or an assessing authority authorised in writing by the Commissioner, prescribed returns of the goods transported cleared or forwarded by it. (3) The authorities referred to in sub-section (2) shall have the powers to call for and examine the books of account, documents and other records in possession of such agency with a view to verifying the correctness of returns submitted and the compliance to requirements of the provisions of section 15-A." 8. Section 7 of the Act deals with offences and penalties. It, inter alia, provides that, any person who, without reasonable cause, fails to produce the books of accounts, registers and documents or any other information required under sub-section (1) of section 15 or fails to furnish the return as required by section 15-B or conceals his turnover or furnishes inaccurate to the fee or tax, penalty. The penalty prescribed for any default made under section 15 (1) and 15-B is Rs. The penalty prescribed for any default made under section 15 (1) and 15-B is Rs. 50/- for each day of default subject to the maximum of Rs. 1,000/-. Under Section 17-A, if the transport agency, or other agencies mentioned in section 15-B, fails to furnish return or furnishes incorrect return, then he can be prosecuted and, on conviction by a Judicial Magistrate, he shall be liable to simple imprisonment which may extend to six months or with fine which may extend to Rs. 5000/- or with both. It also provides that no Court shall take cognizance of offences except on a complaint in writing by the appropriate authority having jurisdiction. Under section 18 of the Act, the Commissioner is empowered to compound offences on payment of money which he may determine by way of composition of offences. 9. The Government in exercise of power conferred under section 26 of the Act has made rules called the Jammu and Kashmir General Sale Tax Rules., 1962 (hereinafter referred to as the Rules). Under Rule 70 procedure is prescribed for registration of transport agency, clearing of forwarding agency. From ST 39 is that format of the monthly return which is to be submitted by the transport agency, clearing or forwarding agency. It reads as under : FORM ST- 39 [See rule 40-B (2)] MONTHLY RETURN OF CLEARING FOR WARDING, TRANSPORTING ETC. Name and address of the clearing/forwarding house/Transporting agent etc. .............................. The months for which the return relates. ................... S. No Date of clearing forwarding transporting etc. Name and full address of the consignor Name and full address of the consignee No. and date of delivery note/way bill etc. Description of goods No. of Packing Quantity Weight Value of goods Remarks 1 2 3 4 5 6 7 8 9 10 DECLARATION I/We .................. declare that to the best of my/our knowledge the information furnished in the above return is true and correct and that it relates to the month of .............. Place : Name and signature with status of Date : the person signing. 10. Form ST 57 is the application format for registration to be submitted by transport, clearing and forwarding agency and form ST 58 is the format of the certificate which is given to the transport, clearing or forwarding agency by the Dy. Sale tax Commissioner concerned. 11. Place : Name and signature with status of Date : the person signing. 10. Form ST 57 is the application format for registration to be submitted by transport, clearing and forwarding agency and form ST 58 is the format of the certificate which is given to the transport, clearing or forwarding agency by the Dy. Sale tax Commissioner concerned. 11. The petitioners herein have not challenged the vires of section 15-A which prescribed for establishment of check posts and inspection of goods in transit. They have rather fairly conceded that Section 15-A is intra vires the Constitution of India. They are only aggrieved of Section 15-B of the Act, which requires them to obtain certificates of registration and submit of the goods transported, cleared for forwarded by them, in so far as failure on their part to comply with the requirement of this provision entails penal consequences. The argument put across is that since the object of the Act is only one of levying tax on the sale or purchase of goods in the State and since the petitioners do not indulge in any activity of sale or purchase of goods, therefore, they could not be brought within the fold of any of the provisions of the Act. In this behalf it would be apt to refer to the preamble of the Act which reads as follows:-- "Preamble. -- An Act to provide for the levy of a general tax on the sale or purchase of goods in the State and for other matters connected therewith." (underlining supplied) 12. The words `and for other matters connected therewith are relevant for determining the controversy raised by the petitioners. No doubt the object of the Act is only to provide for the levy of general tax on the sale or purchase of goods in the States, but this object cannot be achieved unless certain regulatory measures to deal with the ancillary and subsidiary matters connected with the achievement of that object are taken or prescribed for. It is cardinal rule that power to tax includes power to impose the reasonable safeguards in collecting tax and to demand security for proper payment of the same; power to set up machinery for preventing evasion of tax and prescribing machinery for collecting the tax; to designate officers by whom the liability may be imposed and to prescribe the authority, obligation and indemnity of the officers. A bare reading of Section 15-B of the Act does not contemplate charging of any tax on the transport agency, clearing or forwarding agencies. Sections 15-A and 15-B have only sought to provide for these safeguards with a view to achieving the object of the Act. In terms of Section 15-A, at the check post, a transport agency, clearing or forwarding agency is required to disclose complete accounts of the goods carried by him and such information to be given by him is solely for the purpose of checking the evasion of tax. Such obligation is cast on the transporter only for identifying the consignor or the consignee to fix liability on them in correlation with the goods carried by such transporter. The transporter is further required to disclose the quantity, value and weight of the goods so as to help the taxing authority to assess such goods of such escaping dealer. Section 15-B requires the transport agency, clearing or forwarding agency to maintain proper accounts of goods transported and to furnish returns periodically to the assessing authority of the goods transported, cleared and forwarded by it so as to enable the assessing authority to check the evasion of tax by a dealer. The provision is simply a regulatory measure, only to check evasion of tax. It therefore, cannot be said that the impugned provisions of the Act are beyond the object of the Act. 13. It deserves to be mentioned here that the writ petitioners herein earlier in a batch of writ petitions, the lead case being Oriental Goods Transport Company v. State of J&K and Ors. (OWP No.111/2001 and connected matter) had challenged the vires of Section 15-A (8) of the State Act which was inserted by J&K Sales Tax Amendment Act (No. III of 2000) published in Government Gazette on 3rd April, 2000. Clause (b), which had been inserted by the amendment, reads as under:-- "(b) Where Transport Agency (by whatever name called), to whom goods are handed over on suparadnama, in accordance with the rules issued under the Act, releases such goods without obtaining the release order from the competent authority, such transport agency shall be liable to penalty equal to double the amount of the Tax payable on such goods" 14. The submission of the petitioners in that writ petition was that the clause (b) added to sub-section 8 of Section 15-A of the Act was ex-facie de hors the statutory scheme as envisaged under section 15-A of the Act. The contention of the petitioners was rejected by a Division Bench of this Court and it was held that the object for inserting clause (b) in sub-section 8 of Section 15-B of the Act was to stop evasion of liabilities. This Court observed that the penalty sought to be imposed was conditional and available only in the event the `suparadar failed to produce the goods placed on `supardari under Rule 40-D of the Rules. His lordship Mr. Justice H. K. Sema (as his lordship then was), speaking for the Division Bench, ruled that the appropriate Government was within its power to enact law or to frame Rules not only to regulate the procedure to realise the tax but also to regulate procedure to stop evading of payment of tax or liabilities by unscrupulous traders/transporters. It was held that clause (b) was enacted to supplement the requirement of sub-section 8 of section 15-A in respect of consignments placed on `suparadnama of transport company or any other person who failed to produce the same in violation of Rule 40-D of the Rules. 15. Section 15-B of the Act almost identically seeks not only to regulate the procedure to realize the tax but also to regulate procedure to stop evading of payment of tax or liabilities by unscrupulous traders/transporters. Therefore, the ratio of the decision of this Court in Oriental Goods Transport Company v. State of J&K & Ors. (Supra) will govern the present controversy as well. 16. Coming to the next argument of the learned counsel that the impugned enactments are violative of Article 301 and Article 19(1)(g) of the Constitution of India which guarantee free trade, commerce and intercourse through the territory of India and freedom to practice any profession, or to carry on any occupation, trade or business. The question that arises is whether the impugned enactments have the effect of infringing upon these rights of the petitioners. The object of the freedom declared by Article 301 is to ensure that the economic unity of India may not be broken up by internal barriers. The question that arises is whether the impugned enactments have the effect of infringing upon these rights of the petitioners. The object of the freedom declared by Article 301 is to ensure that the economic unity of India may not be broken up by internal barriers. As observed above, the impugned provisions of the Act are regulatory in nature aimed at achieving the object of the Act, i.e. collection of tax. The freedom under Article 301 of the Constitution is violated only where a legislative act operates to restrict trade, commerce or intercourse, directly and immediately Interruption caused to the moving vehicle, as is alleged in the present case, for the purpose of checking whether tax was being evaded or not, does not amount to impediment of free flow of trade attracting Article 301 of the Constitution. Nor it can be said that it infringes the fundamental right guaranteed under Article 19 (1) (g) of the Constitution. It is true that Article 301 of the Constitution of India imposes limitations upon the exercise of legislative power but this freedom is subject to reasonable restrictions imposed in public interest. Section 15-B neither restricts trade, commerce and intercourse directly or immediately. Therefore, the impugned provisions of the Act cannot be said to be violative of Articles 301 or 19(1)(g) of the Constitution of India. 17. In Tripura Goods Transport Association v. Commissioner of Taxes (1999) 2 SSC 253 the constitutional validity of Tripura Sales Tax (11th Amendment) Rules, 1994 and section 29, 32 and 36-A of the Tripura Sales Tax Act, 1976, including notifications dated 23.9.1994 and 15.10.1994 were in question. 17. In Tripura Goods Transport Association v. Commissioner of Taxes (1999) 2 SSC 253 the constitutional validity of Tripura Sales Tax (11th Amendment) Rules, 1994 and section 29, 32 and 36-A of the Tripura Sales Tax Act, 1976, including notifications dated 23.9.1994 and 15.10.1994 were in question. By means of XI amendment sub-rule (3) was inserted after sub-rule (2) of Rule 46-A of the Tripura Sales Tax Rules, 1976, sub-rule (2) of the Principal Rules and Rule 64-A was substituted for the old sub-rule 64-A. The resultant effect of such amendment was that the persons who were working as transporters in Tripura, were required to obtain a certificate of registration and to comply with various other formalities as prescribed under the Act and the Rules viz., to maintain accounts according to the prescription made by the competent authority under Section 36-A of the Act for carrying on transport business while entering into or going outside the State of Tripura, including making the declaration in Form XXIV which was challenged to be beyond the legislative competence of the State Legislature and ultra vires the Constitution offending Articles 14, 19(1) (g), 246, 265, 286, 300-A and 301 of the Constitution of India. The Challenge was primarily on the ground that the appellants therein, being transporters and not dealer within the meaning of Section 2(b) of the Act, the obligation cast on them under the Act and Rules was beyond the legislative competence of the State Legislature. 18. Section 38-B of The Tripura Sales Tax Act is in para matria to the provision of section 15-B of the State Act. Under section 38-B of Tripura Act, it is provided that every transporter, carrier or transporting agent operating its transport business relating to taxable goods in Tripura shall be required to obtain a certificate of registration in the prescribed manner from the Commissioner of Taxes. Under section 36-A of the said Act transporter, carrier or transporting agent operating its transport business in Tripura is to maintain proper account of goods transported to or outside Tripura through it in the manner prescribed and has been made liable to furnish, on demand, in the prescribed manner, such information as the Commissioner may require relating to the transportation of such goods and further is also bound to produce books of accounts for inspection and examination by the Commissioner. Identical issues are raised in the present writ petition were involved in that case. Their lordships of the Supreme Court referred to the judgments in Experts Hotels (p) Ltd. v. State of Gujarat SCC (1989) 3 SCC 677; Etel Hotels and Investments Ltd. V. Union of India (1989) 3 SCC 698; P. N. Krishna Lal v. Govt. of Kerala 1995 Sup (2) SCC 187 : 1995 SCC (Cri) 466; Sodhi Transport Co. V. State of U.P. (1986) 2 SCC 486 : 1986 SCC (Tax) 410; State of Bihar v. Harihar Parsad Debuka (1989) 2 SCC 192 : 1989 SCC (tax) 250 and State of Haryana v. Sant Lal (1993) 4 SCC 380 and held that if any legislature makes any ancillary or subsidiary provision which incidentally transgresses over its jurisdiction for achieving the object of such legislation, it would be a valid piece of legislation. Their lordship of the Supreme Court, after scrutinising the impugned provisions of the Tripura Sales Tax Act and the Rules framed thereunder, held that maintaining of accounts of goods transported into or outside Tripura in the prescribed manner and to furnish in the prescribed manner such information as the Commissioner may require is only to fix the dealer, the taxable goods, place of sale or purchase of such goods and the quantum of tax. Their lordships observed that if a dealer in taxable goods transaction of sale or purchase escapes attention of the taxing authority, tax on such goods escapes with resultant loss to the State revenue. To overreach this possible escape, a mechanism is invariably brought in a statue to seal such loopholes of escape, of course, casting obligations on someone to perform certain acts to reach this objective. The purpose is to identify the consignor or consignee to fix liability on them in correlation with the goods carried by such transporter. Their lordship further held that the object is to help the taxing authority to assess such goods of such escaping dealers fix liabilities on them and collect taxes, imposing penalties including punishing one for the offences committed. The purpose is to identify the consignor or consignee to fix liability on them in correlation with the goods carried by such transporter. Their lordship further held that the object is to help the taxing authority to assess such goods of such escaping dealers fix liabilities on them and collect taxes, imposing penalties including punishing one for the offences committed. Their lordship of the Supreme Court further observed that, if such obligation is not cast, then any dealer under a false name can dispatch his taxable goods to another person through a transporter escaping his sales tax liability on such goods and it could not be ruled out that some dealers and transporters do indulge in such illegal practices. Maintenance of accounts by the transporter is also to help the taxing authority to trace the dealer, fix the goods transported correlating with such dealers transporting such goods for fixing taxable liability in this regard. 19. Like Sections 36-A and 38-B of the Tripura Sales Tax Act, Section 15-B of J&K General Sales Tax Act does not fix any tax liability on the transport agency, clearing or forwarding agency. It is solely fixed on a dealer. The liability, if at all, is only if such transport agency, clearing or forwarding agency does not disclose what is required and what is within their knowledge to help the authorities to collect the tax from escaping dealers which, but for this would escape. 20. Section 17 and 17-A of the State Act speak of penalties for offences committed both by dealers and non-dealers as is evident from the opening words of both these provisions, i.e., "if any person". Transport agency, clearing or forwarding agency becomes liable for penalty and prosecution and resultant conviction only when he fails to register itself, or fails to furnish returns, or files returns/information which he either knows or believes to be false or does not believe to be true. The purpose behind Section 15-A and Section 15-B is only to check the evasion of tax leviable on the taxable goods without placing any liability of tax on the transport agency, clearing or forwarding agency. Therefore, in no circumstance can it be said that enactment of Sections 15-A and 15-B of the transgresses the legislative competence of the State Legislature. The purpose behind Section 15-A and Section 15-B is only to check the evasion of tax leviable on the taxable goods without placing any liability of tax on the transport agency, clearing or forwarding agency. Therefore, in no circumstance can it be said that enactment of Sections 15-A and 15-B of the transgresses the legislative competence of the State Legislature. Since the provisions of Sections 36-A and 38-B of the Tripura Sales Tax Act, which are para matria to Sections 15-A and 15-B of J&K General Sales Tax Act, have been held to be valid pieces of legislation by the Supreme Court, Section 15-A and 15-B too have to be held to be valid legislation and within the legislative competence of the State Legislature. 21. Mr. R. A. Jan learned counsel appearing on behalf of the petitioners, drew our attention to the decision of the Supreme Court in State of Haryana v. Sant Lal (1993) 4 SCC 380. In the said decision the provision contained in Section 38 of the Haryana General Sales Tax Act, whereby the State imposed duty on clearing or forwarding agent or Dalal or any other person transporting goods within the State, who during the course of his business handled documents of title to goods for or on behalf of any dealer, was to furnish to the assessing authority the particulars and information in respect to the transactions of the goods in such form and manner, as prescribed, was challenged on the ground that in respect of such persons the State Legislature had no power under the legislative entry concerned. It was also said that qua them, the legislation is not in respect of any matter ancillary or subsidiary to the legislative entry which entitles the State legislature to impose a tax on the sale of goods. Their lordships of the Supreme Court struck down Section 38 of the Haryana Sales Tax Act to be ultra vires the Constitution. This judgment was noticed by their lordships of the Supreme Court in Tripura Goods Transport Association v Commissioner of Taxes (supra) and it was held that the impugned provision of Haryana General Sales Act, i.e., Section 38 thereof, was different than the provisions contained in the Tripura Sales Tax Act and the Rules framed thereunder. This judgment was noticed by their lordships of the Supreme Court in Tripura Goods Transport Association v Commissioner of Taxes (supra) and it was held that the impugned provision of Haryana General Sales Act, i.e., Section 38 thereof, was different than the provisions contained in the Tripura Sales Tax Act and the Rules framed thereunder. Their lordship further observed that sub-para (ii) of the Explanation to Section 38 of the impugned Harayana Act specifically excluded, `a goods carrier carrying such goods for despatch to other places or gives delivery of any consignment of such goods to the consignee. 22. We find that Section 15-A and 15-B of the State Act, impugned in this writ petition, are much close to the provisions of Tripura Sales Tax Act and the Rules and, therefore, the judgment in State of Haryana v. Sant Lal (supra) cited by the learned counsel for the petitioners is not applicable and renders no help to him. 23. We, accordingly, hold the impugned provisions of the Act, viz., Section 15-B as being within the legislative competence of the State legislature. 24. In view of the above, we do not find any merit in this writ petition which is dismissed without any order as to costs. Interim order passed by this Court on 25th August, 1999 and modified by order of the Court dated 1.12.1999 shall stand vacated.