TaxTMI 
TaxTMI 
1991 (12) TMI 255
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....heck-post, on the ground of undervaluation. The petitioner is dealing in hides and skins at Quilon and Trivandrum, a registered dealer under the Kerala General Sales Tax Act, 1963 (in short, "the Act") and the Central Sales Tax Act, 1956. It is stated that the petitioner purchased 720 hides as per purchase bills dated January 19, 1991 to March 11, 1991, locally. They were intended to be delivered to its head office at Erode on March 15, 1991. Before transporting the goods, the petitioner took care to send a letter dated March 12, 1991 to the 1st respondent, the assessing authority of the petitioner-firm, stating the details of the proposed transfer of goods from Quilon to Erode. The details of the transfer bills and the delivery notes were also given. The petitioner-firm also entrusted a demand draft in the sum of Rs. 6,363, being the tax payable in respect of the goods, which is being transported to Erode. The 1st respondent (assessing authority) accepted the demand draft and allowed the transfer of goods. The letter addressed by the petitioner to the 1st respondent is exhibit P1. The delivery note No. 840106, dated March 13, 1991, wherein a specific endorsement has been made by t....
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....ivery notes produced and made mention of in exhibit P2 notice itself, and in the circumstances, the goods should be released unconditionally. However, the petitioner was prepared to deposit a sum of Rs. 4,556 under protest for release of the goods without delay. By exhibit P4 proceedings, dated March 16, 1991, the Inspector of the Sales Tax Check-post, Walayar, accepted the request of the petitioner. He fixed the security deposit in the sum of Rs. 4,556, and allowed to continue the transport on furnishing security. Exhibit P5 will show that a sum of Rs. 4,556 was paid towards security by the petitioner. It is, thereafter, the petitioner has filed this original petition assailing exhibits P2 and P4 and has also asked for a direction to refund the security deposit of Rs. 4,556, as evidenced by exhibit P5. 2.. We heard counsel for the petitioner, Mr. P.A. Mohammed. In the light of the delivery note, which has admittedly been tendered before the sales tax check-post, as could be seen from exhibit P2 itself, we felt that the apprehension of the petitioner, that even in cases of bona fide transport, the authorities are likely to abuse their powers, is not far-fetched. We requested the....
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....tice that the value of the goods noted in the delivery note is too low, when compared to the prevailing market rate, is nothing but a surmise, which has sprung from the fertile imagination of the officer. To say the least, the Sales Tax Inspector acted arbitrarily and in an unfair manner in discarding the delivery note and in surmising that the value of the goods noted in the delivery note is too low when compared to the prevailing market rate. On facts, we are satisfied that the conclusion in exhibit P2 notice about the lack of bona fides of the transport and the attempt at evasion of tax was suspected, is nothing but a meaningless ritual, and a pretence, to rope in the statutory language contained in section 29A(2B) of the Act. We are of the view, that exhibit P2 notice was issued without any bona fides. What is more, the explanation offered by the petitioner by exhibit P3, dated March 16, 1991, was not even properly adverted to or adjudicated. By exhibit P4, dated March 16, 1991, the Sales Tax Inspector insisted for furnishing of a security deposit in the sum of Rs. 4,556, which was paid by the petitioner, as could be seen from exhibit P5. In the light of the above facts, and in....
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....nsidered to be incidental or ancillary powers of legislation in exercise of the powers vested in the Legislature under List II, entry 54 of the Seventh Schedule to the Constitution. But it should not be forgotten that every statutory power should be exercised fairly, honestly and reasonably. If a particular movement of goods is inspected in transit and the officer feels genuinely that there is an attempt at evasion of tax, he can search, inspect, detain or seize the goods as per the statutory provisions, but it can be so done only on the basis of some material. It cannot be done at the mere ipse dixit of the officer. There should be something more than mere guess-work. It should not be done in an arbitrary or capricious manner. We are afraid that this essential pre-requisite to exercise the powers vested in the officers under section 29A of the Act is very often forgotten. It is observed more in its breach than in its observance. We are highlighting this fact only to draw the attention of the check-post officers and the higher inspecting officers that the powers vested in the statutory authorities under section 29A of the Act is not untrammelled or unexaminable and it can be exerci....