TMI Blog1986 (11) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. Jai Durga Industries-a firm which regularly imports foodgrains from other States to its business premises situated at Jamshedpur. The said firm is registered under the Bihar Sales Tax Act as well as under the Central Sales Tax Act. It is averred that the petitioner purchased 165 bags of mustard (sarso) from M/s. Kapur Chand Girish Chand Jain at Dhaulpur in the State of Rajasthan, and was transporting the same therefrom to Jamshedpur in the State of Bihar in truck No. RSG 533. On the 13th of February, 1986, the officers of the Investigation Bureau, Jamshedpur Division, inspected the said truck and all necessary papers including a road permit in form XXVIII for the 165 bags of mustand (sarso) were produced at the time of inspection. Nevertheless, the inspecting officers seized the goods loaded in the aforesaid truck and detained it at Mango Mofassil Police Station at Jamshedpur, on the allegation that the bill number was not mentioned in column No. 9 of the road permit in form XXVIII-B, and issued show cause notice to the petitioner as to why penalty should not be imposed under section 31(3) of the Act. The petitioner was directed to appear before the inspecting officer on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment. 4.. Before adverting to the rival contentions it seems apt and indeed necessary to make some reference to the legislative history. It would appear that the unamended provisions of sub-section (2a) of section 31 of the Act had held the field for a considerable time within the State. However, an amendment thereof was apparently deemed necessary and by section 9 of the Bihar Finance Act, 1984, enforced on the 1st of April, 1984, the present sub-section (2a) was substituted in place of the earlier provision. For ease of reference the amended and the unamended provision may be juxtaposed below: Amended provision Unamended provision "(2a) A person transporting goods shall (2a) A person transporting carry a declaration in such form as may be goods shall carry either a cash prescribed by the Commissioner supported memo, or bill issued by a selling by either a cash memo, bill or a chalan, dealer or a chalan in case of in case the movement is otherwise than as movement otherwise than as a a result of sale, in respect of goods which is result of sale, in respect of goods being transported on a goods carrier, or a which are being transported on a vessel and shall produce such cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be, and retain one copy or original counterfoil and return the other copy or duplicate counterfoil to the person transporting the goods. (iv) The copy or the original counterfoil retained by the inspecting authority shall be forwarded for verification and for assessment of tax to the circle in which the dealer is registered or has his place of business. (v) The concerned dealer shall preserve the other copy or duplicate counterfoil of form XXVIII-A or XXVIII-B, as the case may be, for production before the assessing authority or for inspection at any time before or after assessment. 2.. This notification shall come into force with effect from the 1st January, 1986." 5.. It remains now to advert to forms XXVIII-A and XXVIII-B adopted by the Commissioner which also merits a notice in extenso: "FORM XXVIII-A Permit (See rule 42) No. I hereby permit the transport of the consignment detailed overleaf. This permit will be valid for one month from the date of issue. Place................ Signature............... Date................. Designation............. Seal Details of consignment permitted to be transported ----------------------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ------------------------------------------------------------------------ -------------------------------------------------------------------------------------- NOTE: (1) Separate form should be used for each consignment. (2)(a) In case of transport across or beyond check post, a copy of the form should accompany the consignment. (b) In case of delivery of consignment from any notified railway station/ other such place, the original copy of the form shall accompany the consignment in transit and thereafter shall be sent to the appropriate authority of the commercial taxes." 6.. It is neither in dispute nor possibly could be, that the notification and the forms are applicable in respect of goods being brought into the State and being sent out of the State in excess of the quantity notified under section 35 by every goods carrier or vessel. The impugned notification in express terms say so. It would thus be common ground that it includes within its sweep the transport of all goods even in inter-State trade through the State of Bihar. Further, clause (ii) of the notification prescribes that if the prescribed form is found blank and even if it does not contain all the minute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch enforcement would be a penalty assessable as if it was a violation of the provisions of sub-section (2a) of section 31 of the Act, would not make it a tax on goods and thereafter to be overzealously brought within the ambit of article 269 which pertains to the levy of taxes. Equally a plain look at the newly added provisions of sub-clauses (g) and (h) of article 269(1) would indicate that these pertain to the levy of taxes stricto sensu. Now once it is held, as it must be, that the notification and the prescription of the form is in no way an imposition of a tax, the very foundation of the attack rested on article 269 disappears. The contention rested thereon must be rejected and consequently fails. 9.. However, learned counsel for the petitioners was on much firmer ground in assailing the impugned notification for imposing unwarranted restrictions on inter-State trade and commerce the freedom whereof stands guaranteed. Herein the very corner-stone of the argument is rested on the ratio of Hansraj Bagrecha v. State of Bihar [1971] 27 STC 4 (SC); [1971] 1 SCC 59. Equally the harsh and stringent, if not impossible, restrictions imposed on the inter-State movement of goods by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... postulate all the details required by the various columns of the prescribed form. It was then pointed out that form XXVIII-B is required to be with the driver of the vehicle when he enters the State. This may sometimes be difficult if not impossible of performance. In the context of inter-State trade, for innumerable reasons, the goods which may earlier have been designed to pass through another State may be diverted in transit and may be required to pass through the State of Bihar. This may become necessary by floods, damage to roads or any other reasons for diversion of the route over the long lines of inter-State trade and commerce in a vast country like ours. However, a stone-wall of blockage, though not impassable, is thereby placed on the free movement of goods in inter-State commerce. Counsel highlighted that such a form is required even in a case where there may be no sale transaction whatsoever involving the imposition of any tax and the owner may be doing nothing more innocuous than transporting his own goods from one State to another. In such a case there would be no incidence of any sales tax or any other tax and to require such an owner to comply with the requirements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to rule 31 and no person shall accept such tender unless the said permit is surrendered to him." Their Lordships struck down the aforesaid rule and the notifications issued thereunder as being plainly unauthorised and violative of the freedom of interState trade and commerce. In holding so it was unequivocally observed as under: "........A provision which is made by the Act or by the Rules which seeks to prevent evasion of liability to pay intrastate sales or purchase tax would therefore be within the competence of the legislature or the authority competent to make the rules. But the State Legislature has no power to legislate for the levy of tax on transactions which are carried on in the course of inter-State trade or commerce or in the course of export. Section 42 of the Bihar Sales Tax Act, 1959, prevents any person from transporting from any railway station, steamer station, air-port, post-office or any other place any consignment of such goods exceeding the quantity specified with a view to ensuring that there is no evasion of tax payable under the Act. But the power under section 42 can only be exercised in respect of levy, collection and recovery of intra-State sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 SCC 59 so here, no tax is being levied. Equally it deserves highlighting that therein the prescribed forms were identical in content and in any case closely similar. 15.. Now once it is found as above, it seems plain that the present case cannot be taken out of the ambit of the ratio of Bagrecha's case [1971] 27 STC 4 (SC); [1971] 1 SCC 59. Undoubtedly the goods merely passing in transit through the State of Bihar are not exigible to any State sales tax. Consequently as held in Bagrecha's case [1971] 27 STC 4 (SC); (1971) 1 SCC 59 the State of Bihar has no competence or power of ensuring the effective levy of inter-State sales tax or to prohibit the transport of goods pursuant to transactions which may not even be of the nature of sale or purchase transaction. That being so, it follows that the present case is even on a firmer and stronger ground than that in Bagrecha's case [1971] 27 STC 4 (SC); [1971] 1 SCC 59. Therein what was sought to be obstructed was the movement of goods from within the State to outside the State. The impugned provisions herein even go further and seek to impose onerous restrictions on goods both being brought into the State and being sent out therefr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State's stand, the submission of reading down in a way boomerangs upon the respondents' stand. It is well to recall that Bagrecha's case [1971] 27 STC 4 (SC); (1971) 1 SCC 59 primarily related to the export or the movement of goods from within the State of Bihar to outside places, yet the impugned provisions were unhesitatingly struck down by their Lordships. 18.. Even otherwise it is not easy to subscribe to the argument of reading down the provisions in the present context. The notification leaves the issue in no manner of doubt. In express terms it talks of goods being brought into the State and being sent out of the State. Such expressive language applicable clearly to the inter-State movement of goods cannot be read with blinkers and construed as if it appertained only to intrastate trade. Reading so would be doing violence to the plain and categoric language of the provisions and, in the celebrated words of a distinguished jurist, would involve a naked usurpation of the legislative function in the thin garb of interpretation. 19.. Mr. S.B. Sinha who bore the main brunt of defending the impugned notification, had placed primal reliance on [1986] 62 STC 381 (SC); AIR 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. As I have already shown earlier, the later case which arose in the context of the Bihar Sales Tax Act is directly applicable and there is thus a virtual identity with the present case and it cannot be taken out of the ratio of Bagrecha's case [1971] 27 STC 4 (SC); [1971] 1 SCC 59. 21.. In fairness to Mr. S.B. Sinha I would notice that he relied on a number of judgments on the point of reading down of a provision in order to uphold its constitutionality. He also cited authorities with regard to validity of extra-territorial legislation. There is no quarrel with these settled propositions and it is, therefore, unnecessary to refer to individual authorities. Counsel placed pointed reliance on [1968] 22 STC 376 (SC); AIR 1969 SC 147 (State of Madras v. N.K. Nataraja Mudaliar), AIR 1975 SC 583 (G.K. Krishnan v. State of Tamil Nadu), AIR 1984 NOC 233 (Guj) (Kakoshi Vibhag Buffalo Salvage Commission Agent, Dist. Mehsana v. State of Gujarat) and AIR 1986 SC 1466 (State of Maharashtra v. Basantibai Mohanlal Khetan). In my view, these authorities are somewhat off the mark and hardly relevant to the pointed issue we are called upon to adjudicate. 22.. It remains to advert to the order, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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