TMI Blog1998 (12) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... tate of Tripura, is aggrieved by the judgment of the Gauhati High Court Reported in [1996] 102 STC 577., dismissing the writ appeal challenging the constitutional validity of the Tripura Sales Tax (11th Amendment) Rules, 1994 (for short, the Rules ) and sections 29, 32 and 36A of the Tripura Sales Tax Act, 1976 (for short, the Act ) including notifications dated September 23, 1994 and October 15, 1994. By means of the aforesaid 11th Amendment, sub-rule (3) has been inserted after sub-rule (2) of rule 46-A of the Tripura Sales Tax Rules, 1976 (for short, the Principal Rules ), sub-rule (1A) has been inserted after sub-rule 63A(1), sub-rule (2) in rule 63A has been substituted in place of old sub-rule (2) of the principal Rules and rule 64A has been substituted for the old rule 64A. The resultant effect of such amendment is that the appellants, who are working as transporters in Tripura, are required to obtain a certificate of registration and to comply with various other formalities as prescribed under the Act and the Rules, viz., to maintain accounts according to the prescription made by the respondents under section 36A of the Act for carrying on transport business while ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As per sub-clause (4) whoever fails, when required by or under the provisions of this Act, to produce any accounts, evidence or documents or to furnish any information, is liable for conviction by a Judicial Magistrate, punishable with imprisonment which may extend to six months or with fine not exceeding one thousand rupees or with both. Composition of offences is conferred under section 32. The Commissioner may, under it, either before or after institution of criminal proceedings, accept from the person who has committed or is reasonably suspected of having committed an offence under the Act or the Rules made thereunder, by way of composition of offence on such terms and conditions as prescribed, and on payment of such sum as determined by the Commissioner, no further proceeding is to be taken against such person in respect of the such offence. Reference was also made to section 36A, which requires maintenance of accounts by a carrier including transporter, the class to which the appellants belongs. This puts an obligation on the transporter to maintain proper account of goods transported to or outside Tripura in the manner prescribed and is liable to furnish in the prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the person who has committed or is reasonably suspected of having committed an offence under this Act or the Rules made thereunder, by way of composition of such offence- (a) where the offence consists of the failure to pay, or the evasion of, any tax recoverable under this Act, in addition to the tax including interest if any or penalty or both so recoverable, a sum of money not exceeding one thousand rupees or double the amount of the tax recoverable, whichever is greater, and (b) in any other case a sum of money not exceeding one thousand rupees in addition to tax recoverable. (2) On payment of such sum as may be determined by the Commissioner under sub-section (1), no further proceedings shall be taken against the person concerned in respect of the same offence. 36A. Maintenance of accounts by carriers.-(1) Notwithstanding anything contained in any other Act, any transporter, carrier or transporting agent operating its transport business in Tripura, shall maintain proper account of goods transported to or outside Tripura through it in the manner prescribed and shall on demand by the Commissioner be liable to furnish in the prescribed manner such information as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the goods carried by the transporter and shall be in form XXIV, in duplicate, and duly signed by him: Provided that if the space provided in form XXIV is not sufficient for making the entries, separate annexure may be attached to the form for the purpose which should be duly signed by him. (2) The officer-in-charge of the check-post or the barrier on being satisfied about the correctness of the statements made and particulars contained in the declaration in form XXIV, shall seal it with his official seal and give a permit. One copy of the permit shall thereupon be returned to the transporter and the other copy shall be retained by the officer in-charge: Provided that a transporter who has obtained a permit at the first check- post or barrier under sub-rule (2) shall not be required to make any further declaration at other check-post or barrier in respect of only so much of the consignments to which the permit relates. (3) The transporter shall obtain form XXIV from the Superintendent of Taxes concerned on payment of such price as may be specified by the Commissioner. The form shall be serially numbered and account shall be maintained in register. No other form XXIV e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount of composition money so determined shall be payable within 7 days from the date of composition of the offence by payment into Government treasury. Upon production of the receipted copy of the challan in support of payment to the Superintendent the seized goods be released. (4) If the person from whom the goods are seized does not opt for composition of the offence within a period of 15 days from the date of seizure or having compounded the offence, does not pay the amount in due time as provided in sub-rule (3) the Superintendent with the previous sanction of the Commissioner, shall issue a proclamation in form No. XXI for auction for sale of such seized goods on a fixed date, place and time. The description of the taxable goods 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 official authorised by the Commissioner. (5) The auction shall be governed by the conditions laid down in the proclamation (form XXI). 64A. Registration of transporter, etc.-(1) No transporter, carrier or transporting agent shall operate its transport business in Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 29(4), which is strongly relied by learned counsel for the appellants, when read with other sub-clauses of that section and further read with section 30, reveal that it is only a mechanism to make collection of tax more effective and purposeful. Sub-section (4) of section 29 constitutes offence only when one fails to produce such account or form as he is required under the law when required by the concerned authority. This is a necessary corollary for which an obligation is cast on the transporters to do certain thing. This threat of offence is only to keep him on guard so that he may not fail to produce such documents as required, but for this the very objective to trace a real dealer for tax and penalty would be defeated. Thus this obligation cast on the transporter is really in aid to the taxing authorities. Section 30 constitutes offence when a false statement is declared. This is followed by the composition of offences under section 32. Section 36A requires the main- tenance of accounts. Similar is the position with respect to the aforesaid Rules. They are all in aid of the mechanism evolved to check evasion of tax. Next requirement of obtaining a certificate of regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lary or subsidiary matters which can fairly and reasonably be comprehended within it. When the vires of an enactment is impugned, there is an initial presumption of its constitutionality. If there exists any difficulty in ascertaining the limits of the legislative power, it must be resolved, as far as possible in favour of the Legislature, putting the most liberal construction on the legislative entry so that it is intra vires. 12.. It is now necessary to scrutinise the impugned provisions to see what are the obligations cast on the transporters, what is the purpose of such obligation, is it in any way taxing such transporters or impeding the transport business to make it beyond the legislative competence and ultra vires article 301 of the Constitution of India? Whenever any goods is sold or purchased inside or outside the State, the incidence of tax and the quantum of tax has to be ascertained under the provisions of the relevant taxing statute. For this, it is necessary to fix a dealer, the taxable goods, place of sale or purchase of such goods and the quantum of tax. If a dealer in taxable goods transaction of sale or purchase escapes attention of the taxing authority, tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the authorities to collect the tax from escaping dealers which, but for this, would escape. Section 29 speaks of offences covering both dealers and non- dealers as is evident by the opening word whoever . Sub-section (4), to which learned counsel referred to, obligates a person to produce any accounts, evidence or documents or to furnish any information as required by the concerned authority. Of course, all this would be what one is required to maintain and in the case of transporters, carriers, etc., what the relevant provisions require him to do. If he is required to maintain or produce some document which he has to maintain under a statute, and if he does not produce it then of course he should be made liable for offence. It is only on his failure to do this, that is treated as an offence, punishment as it is one of the legitimate weapons to enforce one to help the authorities. Such information and documents sought are either with or within the knowledge of transporter. As aforesaid, this is for the sole objective of ascertaining a consignor and consignee of the taxable goods which the transporter is carrying. Such requirement has no correlation with the sale and purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f despatch and destination of the goods, lorry number, description of consignment, quantity, weight, value, consignor s invoice number and date, railway receipt or bill of lading and in case goods are sent outside the State, the permit number and date authorising such export under rule 47C. First, the question is why such information is required, if necessary, what possibly is the difficulty of the transporters, finally whether any objection by them is sustainable in law? As we have said that these informations are required solely for the purpose for checking the evasion of tax. Next, we do not find any difficulty for any transporter to disclose the names and addresses of the consignor and the consignee, the place of destination, he would also be knowing the description of consignment being transported its quantity, weight and value also from the description as disclosed by the consignor. The information, which the transporter has to give so far with reference to the quantity, weight and value of the goods, would be based on the basis of the documents, paper, etc., as disclosed by the consignor. The fear expressed by the learned counsel for the appellants that in case such descript ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consignor and consignee. The rest of the columns from 7 to 13 are primarily to be filled in on the basis of the information given by the consignor. Every taxing statute has charging sections. It lays down the procedure to assess tax and penalties, etc. It also provides provisions to cover pilferage of such revenue by providing such mechanism as it deem fit, in other words, to check evasion of tax and in doing so if any obligation is cast on any person having connections with consignor or consignee in relation to such goods, may be other than a dealer, to perform such obligation in aid, to check evasion and in case he is made liable for any offence, for his dereliction of duty or deliberate false act contrary to what he is obligated to do. In our opinion, it cannot be construed to be beyond the competence of State Legislature. The impugned provisions are not charging sections, no tax liability is placed on the transporters. We find neither sections 29, 30, 32 and 36A nor rules 46A, 63A and 64A lack any legislative competence. They are within the legislative competence of the State Legislature and would fall under List II of entry 54 of the Seventh Schedule to the Constitution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be a dealer even according to the definition of the word dealer as it stood from the very commencement of the Act subject to the other conditions prescribed in this behalf being fulfilled. There is, therefore, no substance in the contention that a transporter was being made liable for the first time after 1979 with retrospective effect to pay sales tax on a transaction which is not a sale. This is also a case where obligation is cast on the transporter to fill up the transit form and, on his failure, an inference was drawn holding such transporter liable to pay the tax like that by a dealer. However, in the case in hand, at no stage the transporter is held liable to pay the tax as payable by a dealer. 17.. We have already referred to sub-rule (1A) to rule 63A as to when the goods could be seized. Sub-rule (3) of rule 63A gives an option to the transporter in case goods carried by him is in contravention of any provisions of the Act and the Rules, if he so desires, to opt for composition of offence. A transporter can always intimate within the time specified under sub-rule (3) to a dealer or owner of the goods to come and pay the amount fixed under section 32. In case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate of registration which in the present case is brought in by amendment as aforesaid, it is really for checking the evasion of tax. By such registration of transporters or carriers it becomes feasible for the authorities to trace out such dealers escaping tax, through such transporters. 19.. In State of Bihar v. Harihar Prasad Debuka [1989] 73 STC 353 (SC); (1989) 2 SCC 192, challenge is to the notification issued under section 31(2a) of the Bihar Finance Act, 1981, urging the requirement that a person transporting goods exceeding the quantity notified under section 35 on a goods carrier to carry permits in prescribed form [XXVIII-A or XXVIII-B] in respect of the goods have brought into or sent out of the State to be restrictive to free-flow of trade and hence violative of articles 301 and 304. This Court rejected the submission and upheld the notification by holding that insistence on permits was intended to prevent evasion and to facilitate assessment of sales tax. The stoppage of transporting vehicle for checking the permit for this purpose would not constitute to be violative of free trade. 20.. Finally, learned counsel for the appellants strongly relied on a decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her valuable consideration or otherwise; (ii) person transporting goods shall, besides the owner, include the manager, agent, driver, employee of the owner or person in-charge of a place of loading or unloading of goods or of a railway out-agency, city booking office or city booking agency, when run by a private person under a contract with railways but excluding a rail head or a post office or of a goods carrier carrying such goods or a person who accepts consignment of such goods for despatch to other places or gives delivery of any consignment of such goods to the consignee. (Emphasis supplied). 21.. Sub-section (1) of section 38 of the Haryana Act requires every clearing or forwarding agent, etc., transporting goods within the State who handles documents of title to goods to be transported within the State for or on behalf of any dealer to furnish to the assessing authority such particulars and information as may be prescribed. Sub-section (2) debars all clearing or forwarding agents, etc., from carrying on their business unless they are licensed. It is held that a clearing, forwarding agent or dalal, etc., transporting goods within the State, even though may not be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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