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2011 DIGILAW 583 (GAU)

Narayan Deb Roy v. State Of Tripura

2011-07-12

A.C.UPADHYAY

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JUDGMENT A.C. Upadhyay, J. 1. By filing this writ petition, the petitioner has questioned the interpretation of Section 32(1)(b) of the Tripura Sales Tax Act, 1976 (hereinafter referred in short, the' 1976 Act') in so far as the imposition of composition fee demanded by the respondent authority in the impugned order. 2. Heard Mr. BN Majumder, learned counsel for the petitioner, and Mr. A. Ghosh, learned State counsel for the respondents. 3. The facts, leading to the filing of this writ petition, may be stated, in brief, as follows: The petitioner carries out transport business in the name and style, 'M/s National Roadways Corporation', which has been established at Jagannath Bari Road, near Colonel Chowmuhuni, Agartala. The Superintendent of Taxes (respondent No. 3 herein) issued two notices upon the firm of the petitioner, dated 05.02.1999 and 10.03.1999, asking to show cause as to why delivery of some taxable goods was made by it, without obtaining permits as per provisions of the 1976 Act and Tripura Sales Tax Rule, 1976. 4. On receiving the show cause notice, dated 05.02.1999, the petitioner submitted a reply admitting that due to unavoidable circumstances, some goods were delivered without permits at the material time, but subsequently, all the required permits were obtained for delivery of the said goods and the tax due was also paid accordingly. The petitioner further stated that the petitioner had no intention for evasion of any tax, and accordingly, prayed for exoneration from any punishment for such technical violation of the Rules. 5. However, at the time of hearing, the petitioner agreed for raising demand of composition money for technical breach of the provision of the 1976 Act in terms of Section 32(1)(b) of the Act. Since the petitioner himself admitted the fault and agreed for composition of the offence under Section 32(1)(b) of the 1976 Act, the petitioner was served with a demand notice dated 15.06.1999, for Rs. 44,054/-, giving all factual backgrounds. The operative portion of the composition order, reads as follows: Hence, the amount of composition money is determined as under:- C.N. No. Declared value Estimated sale value Tax 2269 x 72 Rs. 5,609 Rs. 6,787 Rs. 1,018 As per Section 32(1)(a) Composition money will be amounting to Rs. 2,036 i.e. double the amount of tax. In respect of 41 Nos. The operative portion of the composition order, reads as follows: Hence, the amount of composition money is determined as under:- C.N. No. Declared value Estimated sale value Tax 2269 x 72 Rs. 5,609 Rs. 6,787 Rs. 1,018 As per Section 32(1)(a) Composition money will be amounting to Rs. 2,036 i.e. double the amount of tax. In respect of 41 Nos. Consignments, the delivery of which were made before issue of delivery permit, I take up composition as per Section 32(1)(b) of the Act. Each Consignment is considered a separate incident as the delivery of each consignment was made in separate point of time. Rs. 1,000 multiplied by 41 comes to Rs. 41,000. Therefore, the transporter shall pay Rs. 2,036 + Rs. 41,000 or Rs. 43,036 as composition money and Rs. 1,018 as tax. Informed. Issue Form X for Rs. 44,054/- Superintendent of Taxes, Government of Tripura Charge-III, Agartala. 6. Similarly, the petitioner was issued another show cause notice dated 10.03.1999, alleging violation of the provision the Tripura Sales Tax Act, 1976 and Rules made thereunder, in which the petitioner was asked to show cause as to why some delivery of taxable goods were made without obtaining permits as per provisions of the Act. In this case also, the petitioner agreed for raising demand of composition money for the goods for which no permit could be obtained and for technical breach of the provision of the Act, the petitioner agreed for raising composition money under Section 32(1)(b) of the Act for an amount of Rs. 1,000/- for the proceeding. 7. However, respondent No. 3 started a case vide Composition Case No. 3/NRC/99 and passed an order dated 28.08.1999, raising a demand for Rs. 1,07,904/-, by treating all individual consignments of No. 105 items as separate cases. Along with the said composition money, an amount of Rs. 2,904/-, as tax, at double the rate was added, and a demand of total Rs. 1,07,904/- was made. The operative extract of the composition order in the composition proceedings reads as follows:- Regarding 105 nos. consignments, the delivery of which were made before issue of delivery permit, I take up composition as per section 32(1)(b) of the Act. Each consignment is considered a separate incident as the delivery of each consignment was made in separate point of time. Rs. 1,000/- is determined as composition money for each consignment. Therefore, composition money for 105 nos. consignments, the delivery of which were made before issue of delivery permit, I take up composition as per section 32(1)(b) of the Act. Each consignment is considered a separate incident as the delivery of each consignment was made in separate point of time. Rs. 1,000/- is determined as composition money for each consignment. Therefore, composition money for 105 nos. consignment will be amounting to Rs. 1,05,000/- (Rs. 1000/- multiplied by 105) as per section 32(1). Total amount payable will be as under:- Tax Rs. 968/- Composition money (12(1)(a) Rs. 1936/- Composition money (32(1)(b) Rs. 1,05,000/- Total Rs. 1,07,904/- Informed issue form X accordingly. Sd/- illegible 28.8.99 Superintendent of Tax, Government of Tripura, Charge-III, Agartala. 8. Learned counsel for the petitioner submitted that it is apparent from the two show cause notices, issued vide No. F.03960109 dated 04.02.1999 and No. F.03960109 dated 19.03.1999, respectively that only two separate assessment processes were initiated against the petitioner by the respondent No. 3, for delivery of 41 and 105 nos. consignments respectively. Consequently, two separate assessment orders were issued by the respondent No. 3, in two separate proceedings. Therefore, in terms of provision of Section 32(1)(b) of the 1976 Act, the amount of composition money, per proceeding, ought to have been, not more than 1,000/- against each proceeding. The provision of Section 32(1)(b) of the 1976 Act, regarding composition of offence, reads as follows:-"32. Composition of offence:- (1) subject to such conditions as may be prescribed, the Commissioner may, either before or after institution of criminal proceedings under this Act, accept from the person who has committed or is reasonably suspected of having committed an offence under this Act or the rules made thereunder, by way of composition of such offence. (a) Where the offence consists of the failure to pay, or the evasion of, any tax recoverable under this Act, in addition to the tax including interest if any or penalty or both so recoverable, a sum of money not exceeding one thousand rupees or double the amount of the tax recoverable, whichever is greater, and (b) in any other case a sum of money not exceeding one thousand rupees in addition to tax recoverable. (2) On payment of such sum as may be determined by the Commissioner under subsection(1), no further proceedings shall be taken against the person concerned in respect of the same offence. 9. (2) On payment of such sum as may be determined by the Commissioner under subsection(1), no further proceedings shall be taken against the person concerned in respect of the same offence. 9. Learned counsel for the petitioner as well as the respondent-State agreed that the petitioners case relates to Section 32(2)(b) of the Tripura Sales Tax Act, which states that "in any other case of violation of the provision of the Act or the Rules a sum of money not exceeding Rupees one thousand shall be imposed as composition money in addition to tax recoverable from the assessee". 10. On perusal of the notice of composition, it clearly transpires that only two proceedings were initiated under Section 32(1)(b) of the Act against the petitioner for technical violation of the provisions of the Tripura Sales Tax Act and Rules, 1976 as noted above. 11. Learned counsel for the petitioner further submitted that the issue in question relates to composition money, prescribed in Section 32(1)(b) of the 1976 Act, therefore, in terms of the provisions of Section 32(1)(b) of the Act, 1976, which is applicable in case of the petitioner, a sum of money exceeding to Rs. 1,000/- in addition to the tax recoverable, cannot be demanded from the petitioner per composition proceedings initiated against him. 12. In reply to the above, learned counsel, representing the respondents submitted that the Superintendent of Taxes (respondent No. 3) had rightly asked for payment of the composition money under Section 32(1)(b) of the Act, 1976, by treating each of such consignments as a separate offences. Therefore, the composition money @ Rs. 1000/- imposed by respondent No. 3, per consignment, cannot be faulted. 13. As per the Tripura Sales Tax Act, 1976, the alleged violation by the petitioner is an offence punishable under Section 29(5) of the Act. The maximum punishment if imposed under the said provision may extend up to six months imprisonment or fine not exceeding to Rs. 1,000/-, in addition to tax payable with interest thereon. Now, presuming for the sake of argument, if he is prosecuted in the Court of law, he may plead guilty of the offence and the penalty of fine cannot exceed Rs. 1,000/-. Thus, by seeking to compound the offence he should not be placed in a worse position than had he been prosecuted. Now, presuming for the sake of argument, if he is prosecuted in the Court of law, he may plead guilty of the offence and the penalty of fine cannot exceed Rs. 1,000/-. Thus, by seeking to compound the offence he should not be placed in a worse position than had he been prosecuted. On the face of it, therefore, the imposing of excess composition fee is against the law. 14. The next inquiry to be considered is whether readiness on the part of the petitioner to pay a larger amount by way of a composition fee would alter the situation in any manner. This problem has to be looked into considering the power exercised by the Superintendent of Taxes. The power exercised by him is under Section 32(1)(b) of the Tripura Sales Tax Act, there is no power to compound the offence in respect of the assessee outside the said provision. The assessed person has to be agreeable to compound the offence and it is not only the free will of the officer alone to compound the offence. The assessed person has to be willing to pay a maximum composition fee of Rs. 1,000/- as indicated in the Act. The composition fee thus fixed is not a flexible amount. The assessed person should be willing to pay the amount stipulated under Section 32(1)(b) of the Tripura Sales Tax Act. 15. Consequently, beyond the scheme of the law, the officer cannot compound an offence as well. The officer exercising the power under Section 32(1)(b) can invoke the power only to the extent of imposition of Rs. 1,000/- as compounding fee. By using the expression "not exceeding" in Section 32(1)(b), it limits the discretion of the officer concerned in the matter of imposition of the composition fee. Any specification of a higher amount would be, therefore, beyond the power vested on the officer under the Act. 16. Imposing composition fee of any amount more than one thousand per proceeding, is undoubtedly a forbidden act for the respondents; clearly beyond the provision of Section 32(1)(b)of the Tripura Sales Tax Act. When the Act commands that the respondents may collect a fixed amount under a particular head, any amount in excess thereof would be, obviously with no authority of law and thus, undoubtedly be illegal. When the Act commands that the respondents may collect a fixed amount under a particular head, any amount in excess thereof would be, obviously with no authority of law and thus, undoubtedly be illegal. More so, the composition amount is not imposed in terms of any agreement but in exercise of its statutory power. 17. However, on careful perusal of the provision relating to composition of offence, it clearly transpires that for each proceeding the respondent No. 3 can impose and/or demand for payment of composition money of Rs. 1,000/-, for each proceeding in addition to tax recoverable, since no separate proceeding was instituted for each deliver)' of consignments. Technically, separate composition money for each consignment of the composite proceedings is against the provision of Section 32(1)(b) of the Tripura Sales Act, 1976. 18. On careful perusal of the materials on record, since only two proceedings were initiated against the petitioner, the Superintendent of Taxes (respondent No. 3) could not have imposed composition money of Rs. 1,000/-, for each consignment included in the proceedings, from the petitioner. Therefore, the impugned orders aforesaid passed by the respondent No. 3 in so far as it relates to imposing composition money more than one thousand per proceeding is apparently not sustainable in law. 19. In view of the above discussion, I allow this writ petition. The impugned orders aforesaid are quashed and set aside. The matter is remitted to the respondents with a direction to collect composition fee from the petitioner, not more than Rs. 1,000/- for each proceedings, as per the provisions of Section 32(1)(b) of the Tripura Sales Tax Act, 1976. 20. The writ petition is disposed of with the above directions. There will be no order as to costs.