TaxTMI 
TaxTMI 
1998 (12) TMI 500
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....) including notifications dated September 23, 1994 and October 15, 1994. By means of the aforesaid 11th Amendment, sub-rule (3) has been inserted after sub-rule (2) of rule 46-A of the Tripura Sales Tax Rules, 1976 (for short, "the Principal Rules"), sub-rule (1A) has been inserted after sub-rule 63A(1), sub-rule (2) in rule 63A has been substituted in place of old sub-rule (2) of the principal Rules and rule 64A has been substituted for the old rule 64A. The resultant effect of such amendment is that the appellants, who are working as transporters in Tripura, are 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 respondents under section 36A 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 is 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, 300A and 301 of the Constitution of India. The challenge is based on the gr....
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....h. Composition of offences is conferred under section 32. The Commissioner may, under it, either before or after institution of criminal proceedings, accept from the person who has committed or is reasonably suspected of having committed an offence under the Act or the Rules made thereunder, by way of composition of offence on such terms and conditions as prescribed, and on payment of such sum as determined by the Commissioner, no further proceeding is to be taken against such person in respect of the such offence. Reference was also made to section 36A, which requires maintenance of accounts by a carrier including transporter, the class to which the appellants belongs. This puts an obligation on the transporter to maintain proper account of goods transported to or outside Tripura in the manner prescribed and is liable to furnish in the prescribed manner such information as the Commissioner may require relating to the transportation of such goods. Reference is also made to section 38B, which requires the transporter, carrier or transporting agent operating its transport business relating to taxable goods in Tripura to obtain a certificate of registration in the prescribed manner f....
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....erable, 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 sub-section (1), no further proceedings shall be taken against the person concerned in respect of the same offence." "36A. Maintenance of accounts by carriers.-(1) Notwithstanding anything contained in any other Act, any transporter, carrier or transporting agent operating its transport business in Tripura, shall maintain proper account of goods transported to or outside Tripura through it in the manner prescribed and shall on demand by the Commissioner be liable to furnish in the prescribed manner such information as the Commissioner may require relating to the transportation of such goods and shall also be bound to produce books of accounts for inspection and examination by the Commissioner." "38B. For carrying out the purposes of section 38 every transporter, carrier of transporting agent operating its transport business relating to taxable goods in Tripura shall be required ....
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....ied about the correctness of the statements made and particulars contained in the declaration in form XXIV, shall seal it with his official seal and give a permit. One copy of the permit shall thereupon be returned to the transporter and the other copy shall be retained by the officer in-charge: Provided that a transporter who has obtained a permit at the first check- post or barrier under sub-rule (2) shall not be required to make any further declaration at other check-post or barrier in respect of only so much of the consignments to which the permit relates. (3) The transporter shall obtain form XXIV from the Superintendent of Taxes concerned on payment of such price as may be specified by the Commissioner. The form shall be serially numbered and account shall be maintained in register. No other form XXIV except those supplied from the office of Superintendent of Taxes shall be entertained with effect from such date as the Commissioner may notify by publication in the local newspapers and official gazette." "63A. Power to search at any place by officer in-charge of a check-post, Superintendent of Taxes or any officer specially empowered by the Commissioner.- (1) Notwith....
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....within a period of 15 days from the date of seizure or having compounded the offence, does not pay the amount in due time as provided in sub-rule (3) the Superintendent with the previous sanction of the Commissioner, shall issue a proclamation in form No. XXI for auction for sale of such seized goods on a fixed date, place and time. The description of the taxable goods shall be mentioned in the proclamation. The proclamation shall be published in at least one local newspaper. The auction shall be conducted by the Superintendent or any other official authorised by the Commissioner. (5) The auction shall be governed by the conditions laid down in the proclamation (form XXI)." "64A. Registration of transporter, etc.-(1) No transporter, carrier or transporting agent shall operate its transport business in Tripura relating to taxable goods without being registered with the Commissioner of Taxes in such a manner as he may direct. (2) A transporter, carrier or transporting agent already operating transport business in Tripura relating to taxable goods shall, within a period of 30 (thirty) days from the date of commencement of these Rules (Eleventh Amendment) apply to the Commissioner o....
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....equired by the concerned authority. This is a necessary corollary for which an obligation is cast on the transporters to do certain thing. This threat of offence is only to keep him on guard so that he may not fail to produce such documents as required, but for this the very objective to trace a real dealer for tax and penalty would be defeated. Thus this obligation cast on the transporter is really in aid to the taxing authorities. Section 30 constitutes offence when a false statement is declared. This is followed by the composition of offences under section 32. Section 36A requires the main- tenance of accounts. Similar is the position with respect to the aforesaid Rules. They are all in aid of the mechanism evolved to check evasion of tax. Next requirement of obtaining a certificate of registration under section 38B and making declaration on form XXIV under sub-rule (3) of rule 46A could not be construed as to constitute an inference that it impedes any free-flow of trade or business while entering into and going out of the State of Tripura. 8.. Thus, the question for consideration with respect to the first submission is, whether such provisions could be held to be beyond the....
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....ative entry so that it is intra vires." 12.. It is now necessary to scrutinise the impugned provisions to see what are the obligations cast on the transporters, what is the purpose of such obligation, is it in any way taxing such transporters or impeding the transport business to make it beyond the legislative competence and ultra vires article 301 of the Constitution of India? Whenever any goods is sold or purchased inside or outside the State, the incidence of tax and the quantum of tax has to be ascertained under the provisions of the relevant taxing statute. For this, it is necessary to fix a dealer, the taxable goods, place of sale or purchase of such goods and the quantum of tax. 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 statute to seal such loopholes of escape, of course casting obligations on some to perform certain acts to reach this objective. Thus, maintaining accounts of goods transported into or outside Tripura in the prescribed manner and to furnish in the prescribed ....
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.... Of course, all this would be what one is required to maintain and in the case of transporters, carriers, etc., what the relevant provisions require him to do. If he is required to maintain or produce some document which he has to maintain under a statute, and if he does not produce it then of course he should be made liable for offence. It is only on his failure to do this, that is treated as an offence, punishment as it is one of the legitimate weapons to enforce one to help the authorities. Such information and documents sought are either with or within the knowledge of transporter. As aforesaid, this is for the sole objective of ascertaining a consignor and consignee of the taxable goods which the transporter is carrying. Such requirement has no correlation with the sale and purchase of the goods or to treat a transporter as dealer and consequently, no obligation is cast on him to pay any tax, interest or penalties which a dealer is required to pay. Similarly section 30 refers to offence only when a false declaration is made in connection with any proceedings under this Act, which he either knows or believes to be false, or does not believe to be true. Again, the conviction u....
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....transporters, finally whether any objection by them is sustainable in law? As we have said that these informations are required solely for the purpose for checking the evasion of tax. Next, we do not find any difficulty for any transporter to disclose the names and addresses of the consignor and the consignee, the place of destination, he would also be knowing the description of consignment being transported its quantity, weight and value also from the description as disclosed by the consignor. The information, which the transporter has to give so far with reference to the quantity, weight and value of the goods, would be based on the basis of the documents, paper, etc., as disclosed by the consignor. The fear expressed by the learned counsel for the appellants that in case such description, specially with reference to its weight or value, is found to be wrong about which he would never be certain as he has to depend on what is disclosed by the consignor, he would be liable for punishment under section 30. The fear expressed by learned counsel is without substance and is mere imaginary. We have already observed that the offence is only drawn when there is false declaration, knowing....
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....in doing so if any obligation is cast on any person having connections with consignor or consignee in relation to such goods, may be other than a dealer, to perform such obligation in aid, to check evasion and in case he is made liable for any offence, for his dereliction of duty or deliberate false act contrary to what he is obligated to do. In our opinion, it cannot be construed to be beyond the competence of State Legislature. The impugned provisions are not charging sections, no tax liability is placed on the transporters. We find neither sections 29, 30, 32 and 36A nor rules 46A, 63A and 64A lack any legislative competence. They are within the legislative competence of the State Legislature and would fall under List II of entry 54 of the Seventh Schedule to the Constitution of India. 16.. In Sodhi Transport Co. v. State of U.P. [1986] 62 STC 381 (SC); (1986) 2 SCC 486, challenge was made to the provisions of section 28-B of the U.P. Sales Tax Act, which requires a transporter while entering the State of Uttar Pradesh to obtain transit pass for its delivery at the exit barrier where the transporter leave the State of Uttar Pradesh and on its failure a presumption is drawn the ....
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....is also a case where obligation is cast on the transporter to fill up the transit form and, on his failure, an inference was drawn holding such transporter liable to pay the tax like that by a dealer. However, in the case in hand, at no stage the transporter is held liable to pay the tax as payable by a dealer. 17.. We have already referred to sub-rule (1A) to rule 63A as to when the goods could be seized. Sub-rule (3) of rule 63A gives an option to the transporter in case goods carried by him is in contravention of any provisions of the Act and the Rules, if he so desires, to opt for composition of offence. A transporter can always intimate within the time specified under sub-rule (3) to a dealer or owner of the goods to come and pay the amount fixed under section 32. In case not, it is open to a transporter not to opt for composition of offence. If no liability is fastened on him, then the authorities may proceed to take action under sub-rule (4). By following the procedure therein, the seized goods are auctioned to recover the liability of a dealer for tax, penalty, etc., under the Act. It is significant that sub-section (1) of section 38A records that in case any balance amou....
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....ion issued under section 31(2a) of the Bihar Finance Act, 1981, urging the requirement that a person transporting goods exceeding the quantity notified under section 35 on a goods carrier to carry permits in prescribed form [XXVIII-A or XXVIII-B] in respect of the goods have brought into or sent out of the State to be restrictive to free-flow of trade and hence violative of articles 301 and 304. This Court rejected the submission and upheld the notification by holding that insistence on permits was intended to prevent evasion and to facilitate assessment of sales tax. The stoppage of transporting vehicle for checking the permit for this purpose would not constitute to be violative of free trade. 20.. Finally, learned counsel for the appellants strongly relied on a decision of this Court in State of Haryana v. Sant Lal [1993] 91 STC 321 (SC) ; (1993) 4 SCC 380. In this case, this Court held that section 38 of the Haryana General Sales Tax Act to be ultra vires. This section requires that every clearing or forwarding agent, dalal or any other person transporting goods (including manager, agent, driver and employee of the owner) who handles documents of title to goods for or on behal....
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.... 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." (Emphasis supplied). 21.. Sub-section (1) of section 38 of the Haryana Act requires every clearing or forwarding agent, etc., transporting goods within the State who handles documents of title to goods to be transported within the State for or on behalf of any dealer to furnish to the assessing authority such particulars and information as may be prescribed. Sub-section (2) debars all clearing or forwarding agents, etc., from carrying on their business unless they are licensed. It is held that a clearing, forwarding agent or dalal, etc., transporting goods within the State, even though may not be handling documents of titles to goods, is obliged to take a licence though he may not be liable to a penalty. Hence, it was held to be beyond the competence of the State Legislature as it could not be in respect of any matter ancillary or subsidiary to the legislative entry which entitles the State Legislature to impose such tax. This section further imposes a penalty equivalent to 20 per cent of the value of goods in respect of ....