Transporter not a dealer: seizure-release tax demand upheld where goods were diverted and unaccounted for.
A transporter who merely carries goods and is not a dealer is not assessable to sales tax as a dealer; section 16D operates as a preventive seizure-and-release mechanism, requiring payment only of the amount prescribed for release of the goods and vehicle. Where goods were diverted from the documented consignee, taken to another destination without genuine transport documents, and not properly accounted for, the statutory demand for release was upheld. The levy of tax in the prescribed manner, together with the statutory penalty and entry tax, was treated as justified on the facts, and the writ challenge failed.
Issues: (i) Whether a transporter who is not a dealer is liable to pay sales tax, and if so, to what extent. (ii) Whether, on the facts, the demand of Rs. 90,152 under section 16D of the Orissa Sales Tax Act, 1947 and entry tax for release of the vehicle and goods was justified.
Issue (i): Whether a transporter who is not a dealer is liable to pay sales tax, and if so, to what extent.
Analysis: A transporter engaged only in carriage of goods is not a dealer within the meaning of the sales tax law and cannot be assessed to sales tax in respect of the goods merely carried by him. The levy contemplated by section 16D is not a regular assessment of the transporter as a dealer; the provision operates as a preventive measure against tax evasion and authorises release of seized goods and vehicle on payment of the amount computed in the manner indicated in the statute.
Conclusion: The transporter, if not carrying on trading activity as a dealer, is not liable to sales tax as a dealer; the statutory requirement is limited to payment of the amount stipulated for release under section 16D.
Issue (ii): Whether, on the facts, the demand of Rs. 90,152 under section 16D of the Orissa Sales Tax Act, 1947 and entry tax for release of the vehicle and goods was justified.
Analysis: The goods were found to have been diverted from the documented consignee and taken to Cuttack without support of genuine transport documents for that destination. The transporter had not accounted for the movement in its records, attracting the seizure power under section 16D. The second proviso to section 16D(5) authorises payment of tax at the appropriate rate, to be assessed in the prescribed manner, together with penalty equivalent to 20 per cent of the value of the goods, for release of the goods and vehicle. The demand was also supported by the liability to entry tax under the entry tax provision when goods are brought into the local area.
Conclusion: The demand of Rs. 90,152 and the revisional affirmation thereof were justified.
Final Conclusion: The challenge to the demand and the revisional order failed, and the writ petitions were dismissed.
Ratio Decidendi: A transporter who is not a dealer is not assessable to sales tax as such, but where goods in transit are not accounted for and tax evasion is suspected, the statute may validly require payment of the tax amount computable in the prescribed manner with penalty as a condition for release of the seized goods and vehicle.
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