TaxTMI 
TaxTMI 
2008 (7) TMI 861
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.... Orissa Sales Tax Act, 1947 (hereinafter called, "the OST Act") within the territorial jurisdiction of the Sales Tax Officer, Sambalpur-I Circle, Sambalpur and is engaged in dealing in marble, ceramic tiles, etc. The petitioner is also a registered dealer under the provisions of the Central Sales Tax Act, 1956 (hereinafter called, "the CST Act"). The petitioner placed purchase order with one M/s. Classic Minerals at Lalmadri, Rajasmand in the State of Rajasthan for supply of marble slabs of irregular size. These goods were transported in a vehicle bearing registration No. OR-06-A-9877 and on the way the said vehicle was intercepted by the STO (V)-opposite party No. 2. The goods so carried were supported by a cash bill and transport challan. The driver of the vehicle could not produce any statutory way-bill in form XXXII covering the goods carried in the said vehicle from outside the State of Orissa. The opposite party No. 2 levied and collected tax amounting to Rs. 9,600 and penalty amounting to Rs. 19,200 aggregating to Rs. 28,800 from the driver and issued the impugned money receipt against such action. Being aggrieved by such collection of tax and penalty, the petitioner file....
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....olice in the Home Department of the State and therefore he is not empowered to collect tax and penalty from the petitioner. In support of his submission he relied upon the judgment of this court reported in Dutta Traders v. Sales Tax Officer, Vigilance, Balasore Circle [2000] 120 STC 294. His further grievance is that no opportunity was given to the petitioner to remove the defect. Per contra, learned counsel appearing on behalf of the Revenue supported the order of the revisional authority. In view of the rival contentions of the respective parties, the following questions fall for consideration by this court: (i) Whether there can be any levy of tax and penalty on the goods which are in transit without any way-bill and entered inside the State avoiding the border check gate? (ii) Whether the STO (V) who collected tax and penalty from the petitioner under receipt No. 83753 dated November 27, 1998 is competent to collect such tax and penalty? The first contention of the petitioner is that since the goods were in transit and no sale has been completed, the State has no power to levy tax on such goods. In support of his contention, he relied on the decision of this cou....
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....ve List have a very wide meaning and scope and should have a broad interpretation so as to make provisions in the Act workable and in the interest of revenue. The obligation imposed upon the transporters under sections 42 and 44 of the Act is also a part of such preventive measures against any evasion of taxes and the same should not be read in a narrow sense." The honourable Supreme Court in the case of Sodhi Transport Co. v. State of U.P. [1986] 62 STC 381 held that establishment of check-post and inspection of goods in transit are legally valid legislations. This court in the case of Indian Charge Chrome Ltd. v. State of Orissa [1994] 92 STC 294, considered the Constitutional validity of the Orissa Sales Tax Act as well as rules 94 and 94A of the Orissa Sales Tax Rules and held that section 16A read with rules 94 and 94A of the Orissa Sales Tax Rules are regulatory measures merely to check evasion of tax and the interruption caused to the moving vehicles for the purpose of checking whether tax is being evaded or not. The provisions do not offend article 301 or article 19(1)(g) of the Constitution of India. This court in the case of Kamal Kumar Goyal v. State of Orissa [197....
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....1956. The petitioner was transporting an excavator purchased in the process of inter-State trade on the strength of declaration in form "C". The vehicle carrying the article in question was detained by the Check-post Officer, who wanted certain particulars and rectification of the way-bill. Though the Check-post Officer accepted that the petitioner therein was a registered dealer, and was entitled to purchase machinery, he held that an excavator would not be treated as machinery as it had a separate specific identity of its own. Taking the view that there had been an attempt to evasion of tax, he directed payment of tax of Rs. 2,02,960 in lieu of confiscation. In that situation, this court held that at the stage of scrutiny of way-bill elaborateness of regular assessment did not exist. When exercising powers under section 16A of the OST Act read with rule 94 of the Sales Tax Rules, there was no scope for such analysis and where controversial issues are involved, it would not be appropriate for the Check-post Officer to delve into the aspect. Such controversies should be left to be determined and adjudicated by the Sales Tax Officer under whose jurisdiction the concerned purchase....
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....at shall stop the carrier on demand by an officer of the department not below the rank of an Assistant Sales Tax Officer and keep it stationary as long as it is required and allow examination of the goods in the vehicle or the boat and inspection of all the records connected with the goods in the vehicle or boat. If on such inspection, such officer has reason to believe that there has been an evasion of tax in respect of goods carried on in such vehicle or boat, such officer may order their unloading and seizure and confiscate the goods after following the procedure in sub-rule (5) of rule 94. The procedure laid down in rule 94 shall apply to the disposal of goods confiscated under sub-rule (2). Rule 94B provides for restriction of movement of goods. It provides that no person shall transfer by road, river, craft or mulia from railway station, steamer station, airport, post office or from any other place whatsoever notified in this behalf by the State Government, any consignment of such goods exceeding such quantity, as may be specified in the notification under section 16B except in accordance with certain conditions. Sub-rule (2) of rule 94B provides that any sales tax authori....
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.... the goods vehicle first passes. In this case, the vehicle carrying goods avoided the border check gate, i.e., Shohela checkgate and entered inside the State of Orissa through a bypass way. Thereafter, the vehicle was intercepted by the STO (V) en-route and on inspection it was found that the goods were not covered by the way-bill No. XXXII. The manner in which the goods were carried and crossed the border avoiding the border check gate clearly shows that the goods were carried with a motive to evade legitimate tax due to the State. Had the intention of the parties been clear, the vehicle would have reported at the border check gate at the entry at Shohela as required under rule 94(3)(g) which has not been done in this case. The very fact that the border check gate has been avoided and bypass road has been availed and goods were not covered by statutory way-bill XXXII clearly speaks of the intention to evade payment of tax. Honourable Supreme Court in the case of State of Rajasthan v. D.P. Metals [2001] 124 STC 611 held that Legislature is competent to specify a fixed rate of penalty and not to give any discretion in lowering the rate of penalty. The penalty so fixed is meant to....