TaxTMI 
TaxTMI 
1993 (9) TMI 309
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....lients the service of booking and taking delivery of consignments at the railway stations at Sirsa and Hissar. On the instructions of their clients they arranged for booking of consignments to be transported by railway from the aforesaid railway stations and obtained the necessary documents in the names of their clients; similarly, they took delivery of consignments on behalf of their clients at the aforesaid railway stations and handed over the same and the documents relative thereto to their clients. For such services they were remunerated by their clients. By virtue of sub-section (1) of the said section 38 of the Haryana General Sales Tax Act, 1973 (hereinafter referred to as "the said Act") they were obliged to furnish information in respect of such consignments to, and by virtue of sub-section (2) they were debarred from carrying on their business unless they obtained a licence for the purpose from the assessing authority under the said Act. Sub-section (3) made them liable to the imposition of a penalty in an amount equivalent to 20 per cent of the value of the goods in respect of which particulars and information had not been furnished. Rule 48 of the Haryana General Sales ....
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.... on behalf of their clients. The question, therefore, was whether the State Legislature was competent to legislate in respect of the respondents. The High Court after reference to various authorities, held that a clearing or forwarding agent or "dalal" was a stranger to the transaction of sale or purchase of the goods. He was not liable to pay sales tax nor was he responsible for its evasion inasmuch as he was not a dealer. This apart, there was no justification to raise a presumption of evasion of sales tax in the transactions in respect of which an agent or "dalal" was required to furnish particulars and information under the said section 38. Similarly, it was wrong to assume evasion of sales tax in the transactions the particulars and information of which an agent or "dalal" had failed to furnish. Moreover, the responsibility in regard to the evasion of sales tax was that of the dealer and it could not justifiably be foisted on the agent or "dalal". There being no liability upon the agent or "dalal" to pay the sales tax or an attempt on his part or suspicion against him to escape its payment, it could not be held that the provisions contained in the said section 38 were intra vi....
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.... under a contract with railways but excluding a rail head or a post office or of a goods carrier carrying such goods or a person who accepts consignment of such goods for despatch to other places or gives delivery of any consignment of such goods to the consignee." Section 2(c) of the said Act defines "dealer" thus: " 'dealer' means any person including a department of Government who carries on, whether regularly or otherwise, trade whether with or without a profit motive, directly or otherwise, whether for cash, deferred payment, commission, remuneration or other valuable consideration, of purchasing, selling, supplying or distributing any goods in the State, or importing into, or exporting out of the State, any goods, irrespective of the fact that the main place of business of such person is outside the State and where the main place of business of such person is not in the State includes the local manager or agent of such person in the State in respect of such business: Provided that a person or a member of his family who sells within the State exclusively the agricultural produce grown by himself or grown on any land in which he has an interest whether as owner, usufructuary,....
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.... fee. (3) When the assessing authority after making any enquiry that he may consider necessary, is satisfied that the applicant has correctly given the requisite information, that he has deposited the licence fee into the appropriate Government treasury and that the application is in order he shall issue a licence in form S.T. 41. (4) The licence shall be held subject to the conditions set forth therein and the provisions of the Act and these rules. (5) A record of the licences issued shall be kept in a register in form ST 42." Rule 52 empowers the assessing authority granting such licence to cancel it in case of breach of the said rules, failure to furnish any information as required under rule 53 or furnishing of false information. The application for the grant of such a licence is required to be made in form S.T. 40 prescribed in the said rules. It is required to be made by the person in-charge of "the business of clearing/forwarding/transporting goods". Among other things, it requires information regarding the goods carriers owned by the applicant and the route permit on which they are authorised to operate. Form S.T. 41 is the form to be filled in for a licence authorisi....
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....porting goods if he contravenes the provisions of sub-section (1) or (2). Therefore, it would appear that a clearing or forwarding agent or "dalal" or other person transporting goods within the State, even though he may not be handling documents of title to goods, is obliged to take a licence under the said Act though he may not be liable to the penalty as hereinafter explained. Under the provisions of sub-section (3) the Commissioner or any person appointed to assist him may impose the penalty after giving the person proposed to be penalised a reasonable opportunity of being heard and that penalty shall be of an amount equivalent to 20 per cent of the value of goods in respect of which no particulars and information has been furnished. There is no discretion in the matter of the quantum of the penalty. But, since it is to be calculated as a percentage of the value of the goods in respect of which no particulars or information have been furnished, it cannot be imposed for the failure of a clearing or forwarding agent or "dalal" or person transporting goods who does not handle documents of title to take a licence under sub- section (2). The word "dalal" is defined in the explanatio....
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....r receives them, so that he too stands in danger of losing his employment. The forms which have been referred to require the clearing and forwarding agent, "dalal" and person transporting goods to maintain records of and furnish information regarding the numbers of the registration certificates under the said Act of the consignor and the consignee. It is not clear from the said Act or otherwise that the clearing or forwarding agent or "dalal" or person transporting goods would necessarily have this information. The clearing or forwarding agent, "dalal" and person transporting goods is also required to maintain a record of and furnish information regarding the weight and value of the goods booked or taken delivery of through him. It is not clear how he can state, otherwise than on the information, if any, provided by the dealer, what the weight or value or, indeed, the content of the consignment is. Mr. A.M. Singhvi, learned counsel for the appellants, submitted that the provisions contained in the said section 38 and the said Rules were machinery provisions designed to ensure recovery of the tax imposed by the said Act. He submitted that it was well-established that legislative en....
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....the assessing authority thereunder as he would in the course of his business come to possess. It is legitimate then to make him liable for such escapement of tax as has resulted from the breach by him of such obligation and to a reasonable penalty. As is clear from a reading of sub-section (1) of the said section 38, it is not every clearing or forwarding agent or "dalal" or person transporting goods who comes into possession of the particulars and information required to be furnished under the said Act and Rules for the sub-section itself casts that obligation only upon such clearing or forwarding agents, "dalals" or persons transporting goods who during the course of their business handle "documents of title to goods for or on behalf of any dealer". It is, therefore, at best, only such clearing or forwarding agents or "dalals" or other persons transporting goods who handle documents of title to goods for or on behalf of dealers who can be said to have a connection with the transaction of sale thereof. It is only such clearing or forwarding agents, "dalals" or other persons transporting goods who can be required to obtain from the assessing authority under the said Act a licence ....
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....s" in the explanation to the said section 38 includes the manager, driver and employee of the owner of the goods. Such manager, driver or employee would be required to be licensed under sub- section (2) of the said section 38 and would be liable to penalty and cancellation of his licence in the event that he did not furnish the information and particulars required by sub-section (1) provided he had handled the documents of title to the goods. It seems to us that where the owner of the goods is a company or firm the booking and taking delivery of goods and the handling of documents of title thereto would necessarily be done by one or other employee of the company or firm and it is not reasonable or fair to require all such employees to be licensed under the said Act. Before we part with this judgment we must give due attention to the decision of this Court in Chowringhee Sales Bureau P. Ltd. v. Commissioner of Income- tax [1973] 31 STC 254; [1973] 87 ITR 542; AIR 1973 SC 376, which was cited by Mr. Singhvi. This was a case where the definition of "dealer" in the Bengal Finance (Sales Tax) Act, was questioned as being ultra vires the powers of the State Legislature on the ground th....