TMI Blog1999 (9) TMI 939X X X X Extracts X X X X X X X X Extracts X X X X ..... of articles 14, 19(1)(g), 301 and 304(b) of the Constitution of India and declare the same (sic) asked the learned counsel for the petitioner not to argue individual cases in respect of levy of penalty. 3.. For the sake of convenience, facts of M/s. Kanpha Labs are taken into consideration. The petitioner is dealing in drugs and medicines. The goods were coming from Maharashtra which were intercepted on May 10, 1997. Notice was issued to the driver. The executive officer of the petitioner-firm appeared before the check-post authority and filed the objections. Since there was no seal of the entry check-post on the documents produced, penalty was levied of Rs. 54,822 under section 28-A(4) on May 12, 1997. Reply submitted was considered as evasive. Provisions of section 28-A(2) and (4) are as under: "Section 28-A(2): The owner or person-in-charge of a goods vehicle or a boat shall,- (a) carry with him a goods vehicle record, a trip sheet or a log book, as the case may be; and (b) carry with him a bill of sale or a delivery note obtained from the prescribed authority or such other documents, containing such particulars as may be prescribed, in respect of the goods other th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e than the value of the goods, the amount of penalty leviable shall be restricted to such value; (ii) no penalty shall be leviable on the goods under transport liable to single point tax under the Act, if the owner or person-incharge of the goods vehicle or boat produces proof at the time of interception of the goods vehicle or boat that such goods had already been subjected to tax under this Act; (iii) in respect of contravention of sub-section (3-B), where the penalty levied is not paid, the carrier or bailee or person-in-charge of the goods vehicle shall jointly and severally be liable to pay such penalty and such amount of penalty shall for the purpose of section 13 be deemed to be an amount due under the Act; (iv) before levying any penalty under this sub-section, the officer shall give the person-in-charge of the goods vehicle or boat or carrier, or bailee, or a dealer registered under the Act, as the case may be, a reasonable opportunity of being heard. Explanation: Where the destination of the goods to be delivered in the State is not less than one hundred kilometers, from the checkpost or barrier or any other place at which the goods vehicle or boat is intercepted, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given in the case of Hansraj Bagercha v. State of Bihar [1971] 27 STC 4 (SC) and Atiabari Tea Co. v. State of Assam AIR 1961 SC 232. 7.. It is also submitted that no rules have been framed by the State Government and the form 34 which is prescribed under the old law ceased to operate after deletion of the old section 28-A(2) and thereafter no form is prescribed. Since there is no liability of tax under the K.S.T. Act, penalty cannot be levied as held in Safeguard Packaging v. State (S.T.R.P. No 45 of 1991 dated June 24, 1993). The penalty has been levied as a matter of course in a routine manner. The provisions of section 28-A are not to levy confiscatory penalty on the petitioner for the technical default of driver or default due to circumstances beyond drivers control. The objections submitted are not taken into consideration. 8.. Learned counsel for the petitioner while referring to the decision of Atiabari Tea Co. Ltd. v. State of Assam AIR 1961 SC 232 has drawn our attention to the following observations: "But restrictions, freedom from which is guaranteed by article 301, would be such restrictions as directly and immediately restrict or impede the free-flow or move ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the vehicle. Requiring some other documents to be carried is an unreasonable restriction to carry on the business. A push cart is not supposed to carry the document as contemplated by the section. It is further submitted that if the vehicle is intercepted at a place other than the check-post then the power to take the vehicle to the nearest check post or police station affects the right of the petitioner to carry on the business. The provisions of section 28-A(4) do not contemplate any enquiry and no notice has been given to the dealer nor any efforts are made to find out the owners of the goods and without there being evasion of tax or proving it so simply on non-furnishing of document penalty is levied. The power has been conferred upon the Commercial Tax Inspector also. Non-dealers are also subjected to the provisions of section 28-A. Even on request the transit passes are not issued. The requirement of furnishing a declaration itself is a restriction. If the goods have moved from outside the State in the course of intra-State trade and commerce the State Legislature is not competent to make the provisions for checking of such goods. The penalty itself is confiscatory in nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as found that the amended provision provide an opportunity to the person aggrieved to show cause or to produce the documents, and the power to levy penalty is purported to be exercised only in cases where the person concerned fails to furnish sufficient cause for the contravention or non-compliance with the provisions of sub-section (2) or (3) or (3A) of section 28-A of the Act. They also provide for sufficient safeguards to the person concerned, to appeal against the order levying penalty to the higher authorities as provided under the Act. 16.. In Prakash Road Lines v. Commissioner of Commercial Taxes [1991] 83 STC 49 (Kar), the same view has been taken and it was also observed that the State's competence is to be confined to regulate intra-State transactions. State Legislature has no power to make laws adversely affecting inter-State trade. 17.. In Automobile Products of India Ltd. v. State of Karnataka [1991] 81 STC 414, it was observed by this Court that if any discrepancy is found in the documents carried in the name of the consignee shown in invoices and goods vehicle record, the check-post officers have no jurisdiction to conclude intention to evade tax and levy penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt observed that if the goods have been purchased from a registered dealer outside the State and brings the goods from outside for sale within the State under proper way-bills and other documents, there could be no reasonable apprehension of evasion of tax. 22.. In Tripura Goods Transport Association v. Commissioner of Taxes [1999] 112 STC 609 (SC) the matter was considered at length with regard to the provisions for registration and maintenance of document and submission of the document by the transporter at the check-post. It was observed that maintaining the books of accounts of goods transported into or outside Tripura in the prescribed manner and to furnish in the prescribed form such information as the Commissioner requires including filing of form 24 is only for the said objective to be achieved with the help and aid of such transporter or consignee to fix liability on them in correlation with the goods carried by such transporter further requiring the disclosure of such goods with its quantity, value, weight, to help the taxing authorities in collecting taxes, imposing penalties including punishing one for the offences committed. If such an obligation is not cast on such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of evasion of tax. If for the purpose of such a provision which is ancillary and incidental to the main power to levy the tax and the goods which are sold within the State of Karnataka there is a requirement to produce the document or carrying the document with the goods vehicle or having presumption even of sale thereon it could not be considered that a restriction has been imposed on the right to carry on the business. Inspection of the goods which are passing through the State of Karnataka and have moved from a State outside the State of Karnataka and going to a place outside the State, provisions of section 28-AA exists for which the necessary form can be obtained and even if the forms are not obtained, if the entry is shown at the first entry check-post and also the last check-post of the State that is also the circumstances from which it could be inferred that the goods are not meant for sale within the State of Karnataka. There may be a possibility that the documents are prepared showing consignment of goods from outside the State to outside the State whereas the intention may be to unload them in the State of Karnataka and in such a circumstance the authorities are empowere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purview of article 301. The argument that all taxes should be governed by article 301 whether or not their impact on trade is immediate or mediate, direct or remote, adopts, an extreme approach which cannot be upheld. 29. There is no violation of article 301 of the Constitution. There can be inspection of the documents when the goods are at the shop. Similarly, inspection can be somewhere in between the point of despatch and point of receipt or may be at the check-post. Right of inspection or the requirement to furnish the document are only the provisions which have been made to safeguard the larger public interest of paying the due tax in accordance with law. The assent of the President was not required and we do not consider that it is a case of creating any restriction on the right to carry on business or in movement of goods from one State to another or being violative of articles 19(1)(g) and 301 of the Constitution of India. 30.. Accordingly these petitions are dismissed. 31.. Since we have directed the learned counsel for the petitioners that we will not examine each and every case with reference to levy of penalty, we consider it proper that petitioner may file ..... X X X X Extracts X X X X X X X X Extracts X X X X
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