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2011 DIGILAW 766 (GAU)

Medi Carrier Pvt. Ltd. v. Commissioner of Taxes

2011-09-14

I.A.ANSARI

body2011
JUDGMENT I.A. Ansari, J. 1. Heard Mr. R. Datta, learned counsel appearing for the petitioner. Also heard Mr. N.C. Pal, learned Government Advocate appearing for the respondents. The petitioner, in terms of the Tripura Sales Tax Act, 1976 (hereinafter referred to as "the TST Act") and the Tripura Sales Tax Rules, 1976 (hereinafter referred to as "the TST Rules), applied, on January 2, 2004, to the competent authority for registration as a transporter. With its application, the petitioner also made a security deposit of Rs. 5,00,000. The petitioner was accordingly registered as a transporter under the TST Act and the TST Rules. 2. As the petitioner could not run its business of transportation, a notice was, on April 16, 2007, issued by respondent No. 2, namely, Superintendent of Taxes, Charge II, to the petitioner directing the latter to show cause as to why the petitioner's registration certificate shall not be cancelled inasmuch as the petitioner had not been operating his transport business. The petitioner, then, wrote back to respondent No. 1, namely, Commissioner of Taxes, Government of Tripura, requesting him to withdraw the petitioner's registration and to refund, with interest, the security deposit amounting to Rs. 5,00,000 and if the petitioner decides to start its operation as a transporter, it (the petitioner) would make necessary application for registration along with requisite security deposit. Thereafter, by making application on April 25, 2007, the petitioner requested respondent No. 2, namely, Superintendent of Taxes, to withdraw the registration. The petitioner also submitted, therewith, the registration certificate, in original. The respondents did not refund the security deposit; rather, an order was, on September 16, 2009, issued by respondent No. 2, which is self-explanatory and is, therefore, reproduced below: No. F./CH-II/T-0203041213/1202 Government of Tripura Office of the Superintendent of Taxes, Charge II, Agartala Dated, Agartala, the 16th September, 2009. Order Perused the application of the transporter for refund of security money for Rs. 5 (five) lakhs. The transporter obtained registration under the erstwhile TST Act, 1976 for transportation of medicine and obtained statutory form XXIV from this office. But the transporter failed to use those forms and returned the same as unused and discontinued its transport business mis-utilizing the Government Agency. In view of the above, the security furnished by the transporter is forfeited under clause (b) of sub-section (2) of section 20 of the TVAT Act, 2004. The refund petition is thus disposed of. But the transporter failed to use those forms and returned the same as unused and discontinued its transport business mis-utilizing the Government Agency. In view of the above, the security furnished by the transporter is forfeited under clause (b) of sub-section (2) of section 20 of the TVAT Act, 2004. The refund petition is thus disposed of. 3. From a bare reading of the contents of the order, dated September 16, 2009, aforementioned, it appears that the respondents claimed to have forfeited the security deposit, because the petitioner had failed to use the forms, which were supplied to the petitioner by the respondents/authorities concerned and discontinued his transportation. 4. It needs to be borne in mind that security deposit is made to ensure that any taxable liability of a person, who offers to get registered as a dealer under a fiscal statute, does not escape realization/recovery. If, after his registration, a person chooses not to carry on his business for which he stands registered as dealer or transporter under a taxing statute, his security deposit, in the absence of any law, cannot be forfeited. In short, thus, security deposit is required to be made by a dealer, for the purpose of ensuring the State that the dues of the dealer can be easily recovered by the State. 5. In the present case, it is admitted position that since the petitioner had not carried on its business, as a transporter; it had not incurred any taxable liability and, hence, the respondents could not have forfeited the security deposit on the untenable ground that the petitioner mis-utilized the Government agency by obtaining registration. There is nothing in the TST Act and the Rules framed thereunder that a person, who is registered as dealer or a transporter under the TST Act, would be liable to forfeiture of his security deposit if he fails to run his business. 6. Situated thus, it becomes abundantly clear that the act of forfeiture of the security deposit by the respondents, particularly, respondent No. 2, namely, Superintendent of Taxes, Charge II, is wholly against law and cannot but be treated arbitrary. 6. Situated thus, it becomes abundantly clear that the act of forfeiture of the security deposit by the respondents, particularly, respondent No. 2, namely, Superintendent of Taxes, Charge II, is wholly against law and cannot but be treated arbitrary. This court would have imposed heavy cost on the respondents making them individually liable to pay damages to the petitioner for causing harassment to the petitioner, but this court refrains from doing so by making it clear that any such conduct, in future, on the part of the respondents, would incur financial liabilities as may be determined by the court. At the same time, the demand of interest, on the said security deposit, raised by the petitioner, is also not tenable in law, because the security deposit was made by the petitioner for the purpose of carrying on its chosen business. For the delay, which has taken place, the petitioner may reasonably demand interest, but in the facts and circumstances of the present case, this court is of the view that the ends of justice would be satisfied if, the security deposit of Rs. 5,00,000 is directed to be refunded to the petitioner. 7. Considering, therefore, the matter in its entirety and in the interest of justice, this writ petition is disposed of with direction to the respondents, particularly, respondent No. 2, namely, Superintendent of Taxes, Charge II, to refund/return the said security deposit of Rs. 5,00,000 to the petitioner within a period of six weeks from today and respondent No. 1, namely, Commissioner of Taxes, shall ensure that the directions, given hereinbefore, are complied with. No costs.