TaxTMI 
TaxTMI 
2005 (8) TMI 366
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....er of Taxes See [1999] 112 STC 609. (1999) 2 SCC 253 and not in the case of State of Haryana v. Sant Lal See [1993] 91 STC 321. (1993) 4 SCC 380. 2.. The respondents filed a writ petition in the High Court challenging the seizure of books of accounts and documents made by the authorities at the offices and godowns of the respondents under the provisions of the Assam General Sales Tax Act, 1993 (hereinafter referred to as "the Act"). The respondents have also prayed for a declaration that sections 42 and 44 of the Act, as ultra vires. 3.. The short facts for the purpose of disposal of this civil appeal are as follows: The respondent is a company registered under the Companies Act engaged in the business of transportation of goods on behalf of the customers throughout the country. A Bill, namely, Assam General Sales Tax Bill, 1993 was passed in the Assam Legislative Assembly and the Bill received the assent of the Governor on May 14, 1993 and became an Act (Assam Act No. 12 of 1993), for short, "the Act, 1993". This Act has repealed all the earlier four Sales Tax Acts. 4.. Sections 42 and 44 of the Assam General Sales Tax Act, 1993 read as under: "Section 42. Furnishing ....
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....of the goods loaded on the goods carrier or vessel, by the prescribed authority, the provisions of sub-sections (3), (5), (6) and (7) of section 44 shall mutatis mutandis apply. Explanation.-For the purpose of this sub-section,- (i) 'Dalal' shall include a person who renders his services for booking of or taking delivery of consignment of goods at a railway station, booking agency, goods transport company office, or any place of loading or unloading of goods or contrives, makes and concludes bargains and contracts for or on behalf of any dealer for a fee, reward, commission, remuneration or other valuable consideration or otherwise. (ii) 'person transporting goods' shall, besides the owner, include the manager, agent, driver, employee of the owner, or person incharge of a place of loading or unloading of goods other than a rail head, or a post office, or of a goods carrier carrying such goods, or a person, who accepts consignments of such goods for despatch to other places or gives delivery of any consignment of such goods to the consignee. Section 44. Production, inspection and seizure of accounts, documents and goods and search of premises.-(1) Subject to such Rules as may be....
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....on (3), any authority appointed under sub-section (1) of section 3 may enter and search any place of business of any dealer. (5)(a) Any authority referred to in sub-section (1) shall have the power to enter into and search any office, shop, godown or any other place of business or any building or any place of the dealer, or of a dalal or of an owner of a warehouse, or of a clearing, booking or forwarding agent, or of a person transporting goods or vessels or goods carrier and seize any goods which are found therein but not accounted for by the dealer or the dalal, or the owner of the warehouse, or the clearing, booking or forwarding agent, or the person transporting goods in his books, accounts, registers and other documents: Provided that a list of all the goods seized under this sub-section shall be prepared by such officers and be signed by the officer, the dealer or the person in-charge of goods or the person in-charge of the premises and not less than two witnesses. (b) The authority referred to in clause (a) shall, in a case where the dealer or the person in-charge of goods as mentioned in clause (a), fails to produce any evidence or satisfy the said authority regarding th....
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....cted to be kept. (ii) The power conferred by sub-clause (i) shall also include the power to seal any box or receptacle, godown or building where any accounts, registers or other documents or goods may be kept or are reasonably suspected to be kept. (7) An authority appointed under section 3 may require the assistance of any public servant or police officer in making search and seizure or for safe custody of goods seized under the section and such public servant or police officer shall render necessary assistance in the matter." 5.. Section 38 of the Haryana General Sales Tax Act, 1973 reads as under: "Section 38. Furnishing of information by clearing and forwarding agents, etc.-(1) Every clearing or forwarding agent, dalal or any other person transporting goods, within the State, who, during the course of his business, handles documents of title to goods for or on behalf of any dealer, shall furnish to the Assessing Authority the particulars and information in respect of the transactions of the goods in such form and manner, as may be prescribed. (2) No clearing or forwarding agent, dalal or any other person transporting goods within the State shall carry on his business unles....
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....of the Act or no cash memo or bill or challan has been produced before the prescribed authority under sub-section (3) or rupees one thousand whichever is greater. 7.. Section 44 of the Act empowers any authority appointed under section 3(1) of the Act that if he has reason to suspect that any dealer is attempting to evade tax or that any person transporting goods or any other person has kept his accounts in such a manner as is likely to cause evasion of tax payable under the Act, such authority may for reasons to be recorded in writing, seize such accounts and registers or documents. Power has also given to the authority appointed under section 3(1) of the Act to enter into and search any place of business of any dealer. The said section empowers the authority under clause (b) of sub-section (5) of section 44 of the Act to impose a penalty equal to three times the amount of tax calculated on the value of such goods and to release the goods as soon as the penalty is paid in case the dealer or the person in-charge of the goods fails to produce any evidence or satisfy the said authority regarding the proper accounting of the goods. 8.. In the instant case, the officers of the Sales ....
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.... Transport Association v. Commissioner of Taxes See [1999] 112 STC 609 (SC); (1999) 2 SCC 253. in which case the earlier decision of this Court rendered in the case of State of Haryana v. Sant Lal [1993] 91 STC 321 (SC); (1993) 4 SCC 380. was duly considered. 10.. In the result, the appeal filed by the State of Assam was allowed and the order passed by the learned single Judge declaring sections 42 and 44 of the Act as ultra vires was set aside and the said provisions were held to be intra vires of the Constitution of India. 11.. The respondents, being aggrieved, preferred this appeal by way of special leave petition. 12.. We heard Mr. M.L. Lahoty, learned counsel appearing for the appellant and Mr. Krisna Sarma, learned counsel appearing for the respondent-State. 13.. Mr. M.L. Lahoty, learned counsel appearing for the appellant submitted that the judgment in the case of State of Haryana v. Sant Lal See [1993] 91 STC 321 (SC); (1993) 4 SCC 380. has clearly laid down that in a valid State legislation on sales tax, the scope/ambit of entry 54, List II in the Seventh Schedule cannot be stretched to cover the persons who are neither "dealer" nor have any nexus with the transaction ....
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.... the Haryana General Sales Tax Act is similarly worded and almost pari materia to Explanation II appended to section 42 of the Assam General Sales Tax Act and as such the ratio of State of Haryana v. Sant Lal See [1993] 91 STC 321 (SC); (1993) 4 SCC 380. mutatis mutandis applies to the present case. 17.. Concluding his arguments, Mr. M.L. Lahoty submitted that the transporters like the appellant-company were not involved in any sale or purchase of any goods. They only performed the job of transportation of goods in and outside the State of Assam and, therefore, the State Legislature had no authority and jurisdiction to enact any law in exercise of its powers conferred under entry 54 of List II of the Seventh Schedule to the Constitution of India. As such, the provisions contained in section 42 of the Act imposing obligations on the transporters to furnish particulars and information and to maintain accounts, etc., were ultra vires. Arguing further, learned counsel submitted that the Legislature also had no power to levy penalty on them. The transporters carrying goods on behalf of dealers had no nexus with the sale of goods and that the appellant-company not being a dealer as per ....
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....nalty and punishment for non-compliance of the same could be made and the same is beyond legislative competence. In our view, under section 42 of the Act, it is an obligation on every clearing, booking or forwarding agent or any other person transporting goods who during the course of its business handles documents of titles to the goods for or on behalf of any dealer or person holding certificates under section 14 of the said Act to furnish to the prescribed authority true and complete accounts, register, documents, etc. The said section also provides for levy of penalty at the rate of three times of tax calculated on the value of the goods in respect of which no particulars or information have been furnished under section 42(1) of the Act or no cash memo or challan has been produced before the competent authority under section 42(3) or Rs. 1000 whichever is greater. The said section empowers the appointed authority to enter and search any place of business of any dealer if he has reason to believe that any dealer is attempting to evade tax or that any person transporting goods for any other person who has kept his accounts in such a manner as is likely to cause evasion of tax. A....
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....We have carefully perused both the judgments. Both the judgments uphold the legality of the charging and penal provisions in issue. But this Court struck down the relevant provisions of the Haryana General Sales Tax Act, 1973 because of apparent ambiguity inherent therein. However, in course of considering the analogous provision, viz., section 36A and section 38B of the Tripura Sales Tax Act, 1976, this Court in the case of Tripura Goods Transport Association v. Commissioner of Taxes See [1999] 112 STC 609 (SC); (1999) 2 SCC 253. held that maintenance of accounts by the transporters is only to help the taxing authority to trace the dealer, fix the goods transported co-relating with the dealers transporting such goods for fixing tax liability in this regard. This Court further held as follows: "If a clearing or forwarding agent or 'dalal' or person transporting goods is indeed reasonably and proximately connected with the sale occasioning the liability to the sales tax, it is legitimate to require him to license himself under the Act and maintain and furnish such information and particulars to the assessing authority thereunder as he would in the course of his business come to pos....
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.... from the definition of "person transporting goods" in the Explanation appended to section 38 of the Act. For this ambiguity alone, this Court has struck down section 38 of the Haryana General Sales Tax Act. In the case of Tripura Goods Transport Association v. Commissioner of Taxes See [1999] 112 STC 609 (SC); (1999) 2 SCC 253., this Court upheld the analogous provisions contained under sections 36A and 38B of the Tripura Sales Tax Act as the said provisions clearly defined the expression "dealer" and "documents of title to goods " have been clearly defined and in that view, this Court upheld the legality of section 36A and section 38B of the Tripura Sales Tax Act. 30.. It is further seen that Explanation (ii) to section 42 of the Act excludes only person in-charge of a rail head or a post office from the definition of "person transporting goods". This Explanation clearly states that person in-charge of a goods carrier carrying such goods would be included in the definition of "person transporting goods". It is only due to the reason, this Court was inclined to declare section 38 of the Haryana General Sales Tax Act as ultra vires and illegal. 31.. The Assam Act, in all its spi....
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....ed with the sale occasioning the liability to the sales tax, it would be a legitimate requirement for such person to obtain licence and maintain and furnish such information and particulars to the assessing authority as in the course of his business he may come to possess. But while commenting on sub-section (1) of section 38 of the Haryana General Sales Tax Act it was observed that it was 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. It was further observed that it is only such clearing or forwarding agents or other persons transporting the goods who can be required to obtain licence and would be liable to penalty for breach of such provisions. The meaning of the words "documents of title to goods" was also held to be not clearly defined. So it was found that provisions of the Act cannot have any application to those persons who do not handle documents of title. Thus provisions of the Act cannot have any application to all and the State Legislature will have no power to legislate in respect of such persons. The matters which are not ancillary or subsidiary to the l....
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....officer appointed under section 3 to assist him on payment of such fees as may be prescribed." 36.. By exercising power under section 72(1) of the Act, consequential amendments were also made in the Assam General Sales Tax Rules, 1993 by issuing the Notification on September 11, 2000. A new rule 21A was inserted stipulating that every transporter, carrier or transporting agent liable for registration under section 46A within 60 days of commencement of the amending rules was to submit application for registration. Yet another new rule, i.e., rule 39A was inserted providing for an appeal to the Assam Board of Revenue. Rules 42 and 43 were also inserted to provide for setting up of check- post and for the service of notice. The above writ petition was filed by the Assam Chamber of Inter-State Carriers challenging both the Amending Acts that is, Assam Act 20 of 1999 by which section 46A was inserted as also the Amendment Rules, 2000 as the same are repugnant to articles 14, 19(1)(g), 21 and 300A of the Constitution of India as the State of Assam lacks legislative competency to legislate the said provisions of law. 37.. It was submitted by the petitioners that the transporters/ carrie....