TaxTMI 
TaxTMI 
2015 (8) TMI 499
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....is was a stock transfer and not a sale. The value of the goods was shown to be Rs. 4,80,000. Since there were 1600 cartons, the cost per carton worked out to Rs. 300 per carton. Each carton contained ten packets of oil and the cost of each packet worked out to Rs. 30. 4. The truck bearing No. TR-01H-1792 carrying the goods was stopped at Churaibari check-post and the officer-in-charge of the Churaibari check- post was of the view that the goods had been undervalued. According to him, since the maximum retail price of each packet containing one liter of oil was shown to be Rs. 72, the cost of 10 packets in one carton worked out to Rs. 720 and the cost of 1,600 cartons worked out to Rs. 11,52,000 and on this ground, the goods were seized. The seizure order was handed over to Pinku Das the driver of the vehicle. It would also be pertinent to mention that the truck in question was also owned by the petitioner-company. 5. Against the order of seizure dated December 18, 2012, the petitioner-company filed a revision petition before the Commissioner of Taxes, Agartala, within the period of limitation and the said petition was received in the office of the Commissioner on ....
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.... 7. Now the records have been produced before us and after perusal of the records we are of the view that the manner in which the goods have been seized and sold is highly improper. The stand of the State is that since the goods were undervalued the State was entitled to seize the goods and furthermore, the goods have been sold in accordance with the Rules. 8. Section 67 of the Tripura Value Added Tax Act, 2004 (hereinafter referred to as, "the Act") deals with the establishment of check-posts for inspection of goods in transport. Under sub-section (1) of section 67 the Government has been empowered to establish check-posts with a view to prevent avoidance and evasion of tax. Sub-section (2) of section 67 requires that the driver or person-in-charge of a vehicle shall carry with him the records of the goods including challans, bills of sale or dispatch memos signed by the consignee or transporter of the goods. He is also required to co-operate with the officers of the Excise Department. Sub-section (3) of section 67 entitles the officers empowered by the State Government to stop the vehicle carrying the goods for inspection. 9. Sub-sections (4), (5), (6) and (7....
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....duced appear to be false or forged. It is obvious that the officer in such a case must give reasons as to why he considers the documents to be false or forged. Under clause (a) of sub-section (4) the officer can direct the driver or the person in-charge of the vehicle not to part with the goods by transporting or re-booking till verification is done and this must be done within seven days. Clause (b) of sub-section (4) gives power to the officer to seize the goods for reasons to be recorded in writing and on such seizure the officer has to give receipt of the goods to the person from whose possession or control they are seized. 11. When we read sub-section (4) carefully the power of seizure is only given when the documents are either not produced or the documents produced appear to be false or forged. Sub-section (5) of section 67 empowers the officer-in-charge of the check-post or the officer specifically empowered in this behalf to impose tax and penalty. 12. Section 68 deals with the disposal of seized goods and reads as follows: "68. (1) The Commissioner may, subject to the provisions of section 80, dispose of by public auction any taxable goods seize....
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....oods shall be mentioned in the proclamation. The proclamation shall be published in at least one local newspaper. The auction shall be conducted by the Superintendent or any other officer authorised by the Commissioner." 15. A reading of this rule clearly shows that if the goods have to be put to auction the order for sale of the goods by auction can be passed by the Superintendent with the previous sanction of the Commissioner. The proclamation of auction has to be published in at least one newspaper. The auction is required to be conducted by a superintendent or any other officer so authorised by the Commissioner. The auction is to be governed by the conditions laid down in form 28. 16. First we shall deal with the issue as to whether the order of seizure in this case was proper or not. As discussed earlier the power to seize is granted only when the goods are without documents or are not supported by documents mentioned in sub-section (2) or the officer-in-charge of the check-post is of the view that the documents are false or forged. In the present case the documents were there. Admittedly, the documents were not forged but according to the State, the value of....
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....Joss is caused to the consignor or consignee. If goods are seized and the name of the consignor and/or the consignee is mentioned in the documents, then we are of the considered view that the officer-in-charge of the check-post is required to issue notice to the consignor and consignee before auctioning the goods. 19. We are aware that in the present case the truck also belonged to the petitioner-company. However, we have to settle the law with regard to seizure and disposal of goods in all cases. The rules of natural justice are an integral part of our jurisprudence. Any action which affects the rights of any party cannot be taken unless notice has been issued to the said party. Therefore, before imposing penalty or selling the goods, the officer-in- charge of the check-post must issue notice to the consignor or the consignee. It is true that Act and the Rules do not specifically provide for issuance of such notice(s), but we are clearly of the view that no penal action can be taken without notice to the affected party and therefore, the requirement of issuing notice must be read into section 67 of the Act. 20. Once the goods are seized, the officer who has seize....
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.... 23. We are shocked to note that the reserve price of the palmolein oil had been fixed at Rs. 1,68,640. We fail to understand how this reserved price has been fixed. According to the petitioner-company, the value of the goods was Rs. 4,80,000. The officer-in-charge of the check-post who seized the goods assessed the value of the same at Rs. 11,52,000. Therefore, we fail to understand how the value of the goods when being put to auction was fixed at Rs. 1,68,640. When specifically asked to explain how this value has been fixed we were informed that this value has been fixed in terms of the communication issued by the Assistant Commissioner of Taxes on September 26, 2003 which lays down a formula that the reserved price should be fixed by fixing three times the rate of tax payable on the price estimated by the officer seizing the goods plus five per cent. for overhead cost. Copy of this communication, dated 26.9.2003, reads as follows : "No. F.l-6(37)-TAX/96(P-l)/15577 Government of Tripura, Office of the Commissioner of Taxes. Dated, Agartala, the 26th Sept., 2003. To The Superintendents of Taxes, Choraibari Check-post, North Tr....
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....er cent of the tax so calculated. It is thus clear that when the goods were sold for Rs. 1,76,000 the tax had to be calculated by taking the value of the goods at Rs. 1,76,000 and the penalty could not exceed 150 per cent. We fail to understand how the tax has been calculated on a sum of Rs. 11,52,000 when the goods have been sold for Rs. 1,76,000. 26. We may make reference to the judgment of the apex court in Mahesh Chandra v. U.P. Financial Corporation [1993] 78 Comp Cas 1 , wherein the apex court dealing with the very wide powers of financial corporation empowering it to sell the properties of the defaulting loanees held as follows (pages 11 to 14 and 16 in 78 Comp Cas): "15. Section 29 confers very wide power on the corporation to ensure prompt payment by arming it with effective measures to realise the arrears. But the simplicity of the language is not an index of the enormous power stored in it. From notice to pay the arrears, it extends to taking over management and even possession with a right to transfer it by sale. Every wide power, the exercise of which has far reaching repercussions, has inherent limitation on it. It should be exercised to effectuate the purpose o....
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....antage or price in a sale of the property in lots or as a whole as exigencies warrant. 18. The Corporation or its officers or servants as trustees are bound to exercise their power in good faith in selling or dealing with the property of the debtor as an ordinary prudent man would exercise in the management of his own affairs to preserve and protect his own estate. Therefore, the acts of the officer or servant of the Corporation should be reasonable, just and fair which must meet the eye and the offer accepted must be competitive and every attempt should be made to secure the maximum price possible to liquidate the liabilities incurred by the industrial concern or the debtor under the Act. . . . 21. The sale by public auction or tender or private negotiation should be a bona fide action. First is universally recognized to be the best and most fair method. It is expected to fetch the best competitive price and is beyond reproach...." 27. As far as the present auction is concerned, it does not comply either with the provisions of the Act or the Rules or even with any reasonable view which can be taken in such a matter. The rate at which the oil was auctioned clearly indic....