TaxTMI 
TaxTMI 
1981 (4) TMI 262
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....6 of the Assam Finance (Sales Tax) Rules, 1956 (hereinafter called the Rules). The letter and the accompanying specimen form are as follows: "(Annexure B) To M/s. Electric & Furnishing Mart, Tezpur. This is for general information that a new procedure is going to be introduced with effect from 1st March, 1981, in respect of import of finance tax goods into Assam by road transport. The procedure to be followed for obtaining the permit will be that any dealer intending to import finance tax goods into Assam by road transport shall obtain a permit from the Superintendent of Taxes of his area in the prescribed form and shall transmit it to the carrier for production before the check post officer along with the way bills. Specimen copy of the form may be seen in the office of the undersigned during office hours. Sd./- Superintendent of Taxes Tezpur. (Annexure C) SPECIMEN COPY OF FORM The Assam Finance (Sales Tax) Act, 1956 (See Rules 55 and 56). To The Superintendent of Taxes In accordance with the provisions of rules 55 and 56 of the Assam Finance (Sales Tax) Rules, 1956, I/we hereby declare that the following consignment of----is to....
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....be in a position to fill up the form as the required particulars will not be available in advance; that the prescribed form is redundant in view of the already prescribed declaration forms under rules 55 and 56 and under sub-rule (4) of rule 71, namely, forms XIV and XV, and the rules as to the check posts, and that the impugned direction and the form are beyond the authority and powers of the respondents under the Act and the Rules. 5. The learned Senior Government Advocate answers, inter alia, that the impugned direction and the specimen form have been devised to prevent evasion of tax by importing goods in the name of fictitious persons and it does not in any way increase the tax burden or impede the flow of goods, that the Commissioner of Taxes, under the Act and the Rules has ample powers to call for information, e.g., under section 32 of the Act and to call for declaration under rules 71 to 73 and power to direct the officer-in-charge at a check post under rule 74 in this regard and hence no exception can be taken to the direction and the form in annexures B and C. 6.. The precise question to be determined is whether the requirements in annexures B and C, namely,....
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....f the Act. Rules 55 and 56 prescribe the procedure for receiving goods from outside Assam by filing road declaration form XIV in the following terms: "55. A registered dealer shall, before taking delivery of or transporting from any place specified in rule 54 any consignment of taxable goods exceeding the quantities specified in the said rule and despatched from any place outside Assam, produce for countersignature before the Superintendent or Inspector the railway receipt, bill of lading or other document required for the purpose of obtaining delivery of such consignment from the carrier. He shall simultaneously make over to the Superintendent a written declaration in form XIV in duplicate and duly signed. 56.. The Superintendent or Inspector shall on being satisfied about the correctness of the statements made and particulars contained in a declaration in form XIV countersign the railway receipt, bill of lading or other document and shall seal it with his official seal. Both copies of the declaration made by the dealer shall be endorsed with the number of railway receipt, bill of lading or other document, as the case may be and the date of countersignature of the aforesaid ....
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....ationary for as long as is required by such officer. (3) The said officer may thereupon enter and search such vehicle or boat and inspect all goods and documents concerning goods or vehicle or boat. In carrying out such search or inspection the said officer may take the assistance of any other officer appointed under sub-section (1) of section 8 of the Assam Sales Tax Act, 1947, or any other staff on duty at such check post. The person for the time being in-charge of the vehicle or boat shall forthwith furnish such particulars of the taxable goods and vehicle or boat as may be required and shall render all possible assistance to the said officer in making the search or inspection. 73.. Verification of declaration.-(1) The officer-in-charge of the check post on being satisfied about the correctness of the particulars furnished in a declaration under sub-rule (3) of rule 71, and, as the case may be of particulars furnished in compliance with any requirement made under sub-rule (3) of rule 72, shall countersign all the copies of the declaration and seal them with his official seal. Two copies of the declaration shall be returned to the person filing it after endorsing on one of ....
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....ated as such. Articles 301 and 304 in Part XIII ensure freedom of trade, commerce and intercourse and circumscribe restrictions that may be put on free movement and exchange of goods throughout the territory of India which, as it was pointed out in Atiabari Tea Company Ltd. v. State of Assam AIR 1961 SC 232, is essential in the interest of economy of the nation and for sustaining and improving living standards of the country. The provision contained in article 301 guaranteeing the freedom of trade, commerce and intercourse is not a declaration of a mere platitude, or the expression of a pious hope of a declaratory character, it is also not a mere statement of a directive principle of State policy; it embodies and enshrines a principle of paramount importance that the economic unity of the country will provide the main sustaining force for the stability and progress of the political and cultural unity of the country. 11.. Evasion of tax particularly sales tax, is no doubt a problem which the taxing authorities have to curb by effective measures. Though the power of levying taxes and adopting measures to prevent evasion of tax are essential for the very existence of the Government....
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....s in order that evasion may be checked. The provisions of section 41(2) and (3) of the Madras General Sales Tax Act, 1959, were held to be reasonable restrictions on the fundamental right to hold property and to carry on trade under article 19(1)(f) and (g) of the Constitution and to be protected by clauses (5) and (6) of article 19. In Dunlop India Limited v. State of Punjab [1972] 30 STC 597 the provisions of sub-section (8) of section 14-B of the Punjab General Sales Tax Act, giving the sales tax authorities the power of seizure of goods carried in a goods vehicle were held ultra vires the powers of the State Legislature and any action taken thereunder would be null and void, being without authority. This was affirmed in State of Punjab v. Dunlop India Limited [1974] 33 STC 168. 12.. The above principle was reiterated by their Lordships of the Supreme Court in Check post Officer, Coimbatore v. K.P. Abdulla and Bros. [1971] 27 STC 1 (SC), in the following language: "Entry 54 of List II of the Seventh Schedule to the Constitution authorises the State Legislature to legislate in respect of taxes on the sale or purchase of goods. A legislative entry does not merely enunciate powe....
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....n transport or movement of goods might therefore only be exercised in respect of levy, collection and recovery of tax on transactions of intra-State sale and/or purchase. When rule 31B seeks to prohibit transport of goods to any place outside the State of Bihar unless a certificate is obtained from the appropriate authority, it seeks to prohibit transport of goods pursuant to transactions which may not even be of the nature of sale or purchase transactions; in any case it restricts transport pursuant to transactions which are in the course of inter-State trade and commerce. The operation of the rule is not restricted only to transactions in the course of intra-State trade and commerce. On that account it was held to be ultra vires the State Government and for the same reasons the notification also was held to be unauthorised. 16.. In our instant case the direction in annexures B and C relates to movement of finance tax goods inside the State, but it requires the dealers to obtain a permit by filing a declaration of the intended imports from outside Assam. It may be necessary therefore to see whether this requirement results in impediment to the movement of goods from the consign....
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..... Signature of Superintendent of Taxes, Seal. Date............................... Circle..............................." The Rules were amended in 1971 by the Assam Finance (Sales Tax) (Amendment) Rules, 1971. In this amendment after form XIV another form XV was added in accordance with the provisions of rule 71. Form XV is reproduced below: "FORM XV Declaration of transport of certain goods under the Assam Finance (Sales Tax) Rules, 1956. (to be prepared in triplicate) (See rule 71) To The Superintendent of Taxes, ................................ In accordance with the provisions of rule 71 of the Assam Finance (Sales Tax) Rules, 1956, I/we hereby declare that the consignment of goods, details of which are furnished below, is transported to/from the State of Assam by me/us on my/our behalf by road/boat. 1.. (a) Name and address of the person consigning the goods-------------(b) If he is a dealer, Registration Certificate No. under the Assam Finance (Sales Tax) Act, 1956,-------------- 2. Full address of the place- (a) From which they are consigned-------------- (b) To which they are consigned-------------- 3. (a) Description o....
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....direction annexure B is purported to be under rules 55 and 56 and as such ex facie is an additional requirement under those rules. The learned Senior Government Advocate states that it was by mistake that reference was made to the above two rules, and that annexure C is not meant to be a substitute for form XIV. On a comparison of the two forms, namely, the new specimen form and form XIV, we find that both are under rules 55 and 56, and while the former is to be given by the importing dealer to obtain the permit to take delivery of goods at the destination, the specimen form is required to be filled up and submitted by the importing dealer to obtain the permit, before the goods are imported. Form XV is to be given by the consignor through his carrier. Both XIV and the specimen form contain 12 columns. Columns 1, 2 and 3 are same in both. Column 4 differs to the extent that XIV requires the particulars of the destination station while the specimen requires the name of the check post through which the goods will be transported. Columns 5 to 10 are again identical. Column 11 of XIV requires railway receipt or bill of lading or air note No., while of the specimen requires the name and ....
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....rom the new procedure. 22.. Assuming, but not deciding, that the new direction and specimen form may result in delaying the movement of goods as submitted, the question arises as to whether this will amount to violation of article 19(1)(g) to practice any profession, or to carry on any occupation, trade or business and not saved by article 19(6) or will amount to unreasonable restrictions violative of article 301 and not saved by article 304(b)? 23. If the Commissioner has power for the purposes of the Act to call for information under section 32 and under sub-section (3) thereof to require any person whom he has reason to believe to have obtained taxable goods from outside the State to furnish him with a statement of the names of persons with their addresses from whom he has obtained the goods and of the names and prices of the goods obtained, and if while calling for such a statement movement of goods are temporarily hampered, will it ipso facto amount to unreasonable restriction? If it is regarded as such how will the Commissioner be permitted to exercise the power? In United Provinces v. Mt. Atiqa Begum AIR 1941 FC 16 it has been held that the general descriptive w....
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....inance, 1979, was held not to constitute unreasonable restriction on trade or business and so not violative of articles 19(1)(g) and 301. Of course this was a case of intoxicating liquor. In State of Karnataka v. Hansa Corporation AIR 1981 SC 463, the Karnataka Tax on Entry of Goods into Local Areas for Consumption, Use or Sale therein Act (27 of 1979) which levied on scheduled goods either manufactured or produced within Karnataka State or imported from outside on their entry in a local area was held to have satisfied the test of reasonableness under article 304(a) and not to be violative of article 19(1)(g) for the little differential treatment it meant between the locally produced and imported goods. In New Bihar Biri Leaves Co. v. State of Bihar AIR 1981 SC 679, where clause 13 of form M under rule 9(10) of the Bihar Kendu Leaves (Control of Trade) Rules, 1972, framed under section 20 of the Bihar Kendu Leaves (Control of Trade) Act (5 of 1974) requires that the purchaser has to pay minimum royalty of 75 per cent before he utilizes the leaves even if the prices collected by him ultimately falls short of this amount, it was held that it satisfied the test of reasonableness under....