TaxTMI 
TaxTMI 
TaxTMI 
2007 (12) TMI 418
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.... consignors in Andhra Pradesh to the consignees in West Bengal and other States; and (iii) For quashing rule 94(4)(a) of the Orissa Sales Tax Rules, 1947. Briefly stated, the case of the petitioners is that they are transporters and are engaged in transporting fish from the consignors in the State of Andhra Pradesh to the consignees in the States of West Bengal or Bihar. While proceeding from Andhra Pradesh to West Bengal or Bihar they have to move through the State of Orissa. The STO in excess exercise of his power under the Orissa Sales Tax Act, 1947 (hereinafter referred to as, "the "Act") has resorted to forcible realisation of tax on fish with penalty carried by the petitioners from Andhra Pradesh to West Bengal or Bihar at the Unified Check Gate, Girisola (hereinafter called as, "the check gate"). The consignors fill up the way bills in form X under the Andhra Pradesh General Sales Tax Rules, 1957 indicating the address of the consignees of West Bengal and Bihar. It is the sole responsibility of the petitioners to carry the fish to the destination of the consignments within the stipulated period of time in good condition which is virtually a race against time as fish is a hi....
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....re intended to pass through the territory of the State of Orissa the destination being outside the State whereas in fact they are unloading the goods inside the State of Orissa resulting in sale of the goods without payment of tax that is legitimately due to the department. It is stated further that basing on the earlier reports of such detection of evasion of tax by the mobile and intelligence wings of the department, no alternative is left out on the part of the department except to realise the tax in respect of vehicles which have in the past indulged in evasion of tax. In paragraph 15 of the said counter, it is stated that the departmental officer has also recorded the statement of some persons in-charge of the vehicle admitting delivery of goods inside the State of Orissa as stated above. The opposite parties in support of their stand have enclosed copies of some of the reports of the Commercial Tax Officers with the counter-affidavit. It is further stated that the consignors of fish are not registered under the Act having their fixed place of business inside the State and are not permanent residents of the State of Orissa for which tax is realised from them at the entry point....
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....t tax where there is likelihood of evasion of tax in respect of goods carried in any vehicle, boat. Such provisions are not violative of freedom of trade and commerce under the Constitution. [See Tripura Goods Transport Association v. Commissioner of Taxes [1999] 112 STC 609 (SC), Commissioner of Sales Tax v. P.T. Enterprises [2000] 117 STC 315 (SC) and State of Rajasthan v. D.P. Metals [2001] 124 STC 611 (SC)]. This court also in Kamal Kumar Goyal v. State of Orissa reported in [1975] 35 STC 343, held that section 16A of the Act and rule 94 of the Rules are within the legislative competency of the State Legislature under entry 54 of List II of the Seventh Schedule of the Constitution and are intra vires. In the case at hand, tax has been collected by the STO exercising power vested in him under section 16A of the Act read with rule 94 of the Rules even in absence of a complete sale. Requirement of rule 94 is that there should be reasonable apprehension. Any apprehension is not enough because the Rules require recording of reason for apprehension. For coming to a conclusion that there is likelihood and/or possibility of evasion of tax there must be some foundation for entertainin....
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....st or barrier finds that the goods are not fully covered by a way bill in form XXXII or that the way bill is defective or incomplete or that there is evasion of tax, or apprehends, for reasons to be recorded in writing, that there is likelihood of evasion of tax in respect of the goods carried in any vehicle or boat, he shall, in order to prevent or check evasion of tax, serve on the owner of the goods or any person on his behalf a notice in form VIB giving him an opportunity to rectify the defect or omission, if any, or an option to pay such amount as may be indicated by the officerin-charge of the check-post or barrier; . . ." As discussed above, it is stated in the counter that most of the petitioners have resorted to clever ploy to evade legitimate tax due to the department by preparing false way bills to show that goods are intended to pass through the territory of the State of Orissa to reach the destination outside the State of Orissa. But, in fact, they are unloading the goods inside the State of Orissa resulting in sale of the goods without payment of legitimate tax. To this effect, reports have been submitted by the Commercial Tax Officers as well as officers of mobile a....