TaxTMI 
TaxTMI 
2003 (2) TMI 467
X X X X Extracts X X X X
X X X X Extracts X X X X
....for the release of the goods on furnishing of security, as contemplated under section 42(8) of the Act. At that stage, learned counsel for the petitioners made their submissions questioning the validity of the impugned notices issued by the respondent. 4.. The petitioners in Original Petitions Nos. 167 of 2003 and 173 of 2003 have agreed to furnish security under section 42(8) of the Tamil Nadu General Sales Tax Act, 1959 and in other respects, they concur with the arguments advanced by the learned Senior Counsel. 5.. At the outset, learned Senior Counsel-Thiru C. Natarajan has made it clear that his intention is only to clarify the position of law and not to support tax evasion which would impair the progress to achieve the high object of "Welfare State". Learned Senior Counsel elucidated his reasons by interpreting section 42, specially sub-sections (3), (5) and (8) of section 42 of the Tamil Nadu General Sales Tax Act, 1959 which are as follows: "Section 42. Establishment of check-post or barrier and inspection of goods, while in transit.-(1) If the Government consider that with a view to prevent or check evasion of tax under this Act in any place or places in the State....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... either in the check-post or elsewhere as long as may reasonably be necessary and shall ascertain the correct name and address of the owner of the goods vehicle or boat or of the consignor or of the consignee of the goods: Provided that no such goods shall be detained by the said officer for more than twenty-four hours except with the permission of the next higher authority." 6.. Before going into the meaning conveyed under the said provisions, it is better to consider the arguments advanced on the side of the Revenue. Learned Advocate-General-Thiru N.R. Chandran, has contended that the enforcement authorities of the Sales Tax Department, on inspections, found certain irregularities in the transactions for which all these original petitions are filed. There are three types of cases: (i) Goods imported from foreign countries and kept in warehouses or godowns, as the case may be; (ii) Goods intercepted at the check-posts while they were being transported; and (iii) Goods sent by M/s. Haldia Petrochemicals Ltd., West Bengal, to their Branch at T. Nagar, Chennai-17. M/s. Tarajyot Polymers Ltd., Bangalore, petitioners in O.P. Nos. 95, 114, 121 and 157 of 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vt. Ltd., Chennai, a sister concern of Tvl. Sha Jagroopjee Pukhraj and doing business in the same premises. On notice, the petitioners appeared before enforcement wing officials, admitted the violation of the provisions of the Tamil Nadu General Sales Tax Act, 1959 and paid a compounding fees of Rs. 1 lakh and tax of Rs. 3,70,000. The enforcement wing officials had reasons to believe that the petitioners indulged in clandestine movement of imported goods and thereby cheated the Government its legitimate tax due on such sales. On further inspection on January 29, 2003, it came to light that the dealers have imported 2,400 bags of toor dhall and cleared the goods from the bond and moved 1,720 bags on the earlier date, leaving 680 bags in the godown. The officials issued a Goods Detention Order in G.D. No. 5/2002-2003 dated January 29, 2003 to verify the genuineness of the transactions. 8.. M/s. Haldia Petro-chemicals, West Bengal, having their head office at Calcutta, transported the goods from Kolkota to Chennai. The goods were intercepted at the check-post on the ground that the goods in the vehicle were not accompanied by valid documents prescribed under the Tamil Nadu General ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....TC 481 wherein it was held: "The sales in this case were effected by transfer of documents of title long after the goods had crossed the customs frontiers of India; the ships carrying the goods in question were all in the respective harbours within the State of Madras when the sales were effected by the assessee by transfer of documents of title to the buyers. The sales were therefore not effected in the course of import." In the case of Madras Marine and Co. v. State of Madras [1986] 63 STC 169, it was held by their Lordships of the Supreme Court: "The customs barrier does not set a terminal limit to the territory of the State for sales tax purposes. A sale, therefore, beyond the customs barrier may still be a sale within the State." In Bharat Heavy Electricals Ltd. v. State of Andhra Pradesh [1996] 102 STC 345, the Andhra Pradesh High Court held: "That Central sales tax is liable to be collected in the State from which the movement of the goods commenced. It is that State alone which has the authority to collect the tax on behalf of the Government of India. The rightful and authorised agent of the Government of India was identified by section 9(1) of the Central Sales....
X X X X Extracts X X X X
X X X X Extracts X X X X
....this stage, it was also pointed out by the learned Advocate-General the Statement of Objects and Reasons, Act No. 29 of 1980 which is as follows: "In order to arrest evasion of tax, it has been found necessary to make provision for examining the goods and inspecting the records relating to their transport when the goods are kept in the custody of a carrier or bailee prior to its delivery. The Government have decided to make suitable provisions for this purpose." 13.. Learned Senior Counsel for the petitioners has relied on some decisions of the Madras High Court reported in [1972] 30 STC 233 (Mad.) (W.H. Deeth And Company v. Assistant Commercial Tax Officer), [1972] 30 STC 468 (Mad.) (Murugan Soap Works v. Assistant Commercial Tax Officer) and (1994) 6 MTCR 222 (Mad.) (Deputy Commercial Tax Officer v. Nathan Trading Company). For the aforesaid reasons, these decisions can be considered at the appropriate stage, in case the petitioners have an opportunity to raise similar grounds again. The other decision relied on by the petitioners reported in AIR 1990 SC 1814 (Dabur India Ltd. v. State of Uttar Pradesh) can be considered at the appropriate stage. Their Lordships of the Supr....