TMI Blog1996 (4) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... forwarding agents or dalals transporting goods. They also provide warehouse facilities to the consignors so long as the goods are not delivered to them or despatched to places other than the place of their business. The Act of 1994 came into force with effect from April 1, 1994. It received the assent of the President on January 7, 1995 and the assent was published in the M.P. Gazette (Extraordinary) dated February 7, 1995. The validity of the three provisions, i.e., sections 57, 58 and 59 of the Act, have been challenged by this petition. 3.. As per the said three provisions, the petitioners are required to furnish information and such particulars, including the statement of accounts, and affairs verified in the manner specified by the Commissioner, as he may require in respect of transactions of any dealer with them provided the petitioners handle the documents of title to goods or transport goods. By virtue of section 57(2) of the Act, a penalty is provided of a sum equal to three times the amount of tax payable in respect of the goods involved in the transaction referred to above. Section 58 of the Act, speaks of control on clearing and forwarding agents to prevent or chec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontaining such particulars of his business as may be prescribed which shall be open to inspection by the Commissioner. (2) If any clearing or forwarding agent on being directed to do so under sub-section (1) contravenes the provisions thereof, the Commissioner may, after giving such agent a reasonable opportunity of being heard, direct him to pay, by way of penalty a sum not exceeding five hundred rupees. Section 59: Clearing and forwarding agent defined.-For the purpose of sections 57 and 58 clearing and forwarding agent includes a person engaged in collecting goods from any place inside the State including railway premises and arranging for the transport and/or delivery of such goods to the principal or any other person or carrier of goods for and on behalf of the principal and in the process of collection, transport or delivery handles documents of title to such goods." 4.. In short, by virtue of all the aforesaid three provisions of the Act, the carrier is being sought to be treated as a dealer and for evasion of any tax by the principal, the carrier is also sought to be penalised to the extent of penalty in a sum equal to three times the amount of tax payable in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h transfer, delivery or supply of any goods shall be deemed to be sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made." Clause (29A) was inserted by the Constitution (Forty-sixth Amendment) Act, 1982. Clause (29A) which defines "tax on sale or purchase of the goods" with the extended meaning, cannot include the carriers, who transport the goods from one place to another so as to come in the widely worded definition of "tax on sale and purchase of goods". 6.. "Dealer" has also been defined in section 2(h) of the Act, which reads as under: "Section 2(h): 'dealer' means any person who carries on the business of buying, selling, supplying or distributing goods directly or otherwise, whether for cash, or for deferred payment or for commission, remuneration or other valuable consideration and includes- (i) a local authority, a company, an undivided Hindu family or any society (including a co-operative society), club, firm or association which carries on such business; (ii) a society (including a co-operative society), club, firm or association which buys goods fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per rule 75 of the Rules, it has been incumbent on the clearing and forwarding agent to send an intimation in form 60 about his business to the appropriate Commercial Tax Officer within three months from the date of commencement of his business and he has also been obliged to keep and maintain the register in form 61. As pointed out above, since the clearing and forwarding agents are not covered either by definition of "dealer" and the transporters, i.e., clearing and forwarding agents are nowhere connected with the sale and purchase of goods; therefore, they cannot be brought under the provisions of the Act and be penalised for omission or commission of their principal. Therefore, this Rule also cannot force them to regulate their business under the Act. In this connection, our attention was invited to a decision of honourable Supreme Court in State of Haryana v. Sant Lal [1993] 91 STC 321 and in that case, the competence of the State Legislature under the Haryana General Sales Tax Act, 1973, and Rules made thereunder was challenged. The clearing and forwarding agents or dalals or other persons transporting goods were brought under the control of the Haryana General Sales Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing or receipt of goods which have been sold; they could very well be handling goods which a consignor may consign to himself from one town or village to another in the State. The said Act does not take account of this and requires all forwarding and clearing agents, 'dalals' and persons transporting goods to be licensed under the said Act. To this extent the said section 38 goes beyond the ancillary and subsidiary powers of the State Legislature in enacting a law imposing sales tax. It is difficult to hold that a clearing or forwarding agent, 'dalal' or person transporting goods can be made liable to a penalty equivalent to 20 per cent of the value of the goods in respect of which no particulars and information have been furnished. Given the obligation to furnish particulars and information, a penalty for evasion of tax, in addition to the tax evaded, can reasonably and fairly be imposed which bears a proportion to the quantum of tax that has escaped assessment but it cannot reasonably and fairly bear a proportion to the value of the goods the sale of which has occasioned the liability to tax. A penalty as high as that sought to be imposed could well put a smaller clearing or fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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