TMI Blog1977 (5) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... y the officer-in-charge of the check post or barrier of the documents, packages, etc., for declarations to be made by the owner or person in-charge of the goods vehicle and for production for examination all transport and other documents at stations of transport of goods, bus stands, etc. We are not particularly concerned with sub-sections (2), (3), (4) and (5) of section 14-B. Sub-sections (6), (7) and (8) are material. Sub-sections (6), (7) and (8) as they stand now were introduced by Amending Act No. 9 of 1974. Originally sub-sections (6), (7) and (8) were as follows: "(6) Any officer not below the rank of an Assistant Excise and Taxation Officer while acting under this section shall have the power to seize any goods not covered , by the documents mentioned in Subsection (2) and sub-section (3). (7) The dealer or any person, including a carrier of goods, acting on behalf of the dealer shall not take delivery of, or transport from, any vessel, station, airport or any other place, whether of similar nature or otherwise, notified in this behalf by the State Government, any consignment of goods, the sale or purchase of which is taxable under this Act except in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immediately and in any case within twenty-four hours of the detention of the goods by the officer detaining the goods to the Excise and Taxation Officer of the district seeking the latter's permission for the detention of the goods for a period exceeding twenty-four hours, as and when so required, and if no intimation to the contrary is received from the latter the former may assume that his proposal has been accepted. (7) The officer detaining the goods shall record the statement, if any, given by the owner of the goods or his representative or the driver or other person in-charge of the goods vehicle or vessel and shall require him to produce proper and genuine documents as referred to in sub-section (2) or sub-section (4), as the case may be, before him in his office on a specified date on which date the officer shall submit the proceedings along with the connected records to such officer as may be authorised in that behalf by the State Government for conducting necessary enquiry in the matter. The said officer shall, before conducting the enquiry, serve a notice on the owner of the goods and give him an opportunity of being heard and if, after the enquiry, such officer fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court said In that case. The Supreme Court was concerned in that case with the question of the vires of section 42(3) of the Madras General Sales Tax Act, 1959, which provided for the seizure and confiscation of any goods which were under transport by any vehicle and were not covered by the prescribed documents. It was held that the provision for seizure and confiscation was based on the unwarranted assumption that the goods were transported after sale within the State. It was also held that the power to seize and confiscate all goods which were carried in a vehicle, whether the goods were sold or not, was not incidental or ancillary to the power to levy sales tax. It was said: "But, in our judgment, the power to confiscate goods carried in a vehicle cannot be said to be fairly and reasonably comprehended in the power to legislate in respect of taxes on sale or purchase of goods. By sub-section (3) the officer-in-charge of the check post or barrier has the power to seize and confiscate any goods which are being carried in any vehicle if they are not covered by the documents specified in the three sub-clauses. Sub-section (3) assumes that all goods carried in a vehicle near a ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there has been an attempt to evade the tax due under the Act. It cannot possibly be disputed that the prevention of evasion of sales tax is a power incidental or ancillary to the levy of sales tax and falls within entry 54 of List II of Schedule VII of the Constitution. Section 14-B(7), which provides for detention of goods and levy of penalty if there has been an attempt to evade the tax due under the Act, cannot, therefore, be held to be without constitutional sanction. It is further to be noticed that the goods which are to be detained are also specified In section 14-B(6) as the goods meant for trade and not covered by proper and genuine documents. It was argued by Shri Bhagirath Dass Seth that section 14-B(7) contemplated imposition of penalty for attempting to evade the tax due under the Act even before the liability to tax had arisen and it was, therefore, repugnant to the general scheme of the Act. He invited our attention to the decision of the Supreme Court in Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver[1967] 20 S.T.C. 453 (S.C.). The Supreme Court, in that case, considered the second proviso to section 41(4) of the Madras General Sales Tax Act, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for recovery of the tax but provides for the imposition of penalty which is calculated not on the basis of the tax payable but on the basis of the value of the goods. The present provision is clearly outside the rule laid down in Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver[1967] 20 S.T.C. 453 (S.C.). It cannot for a moment be pretended that there can be no attempt to evade the tax due under the Act before the liability to pay the tax has arisen. A scheme or device to evade the tax may start operating long before the actual liability to pay the tax arises. As soon as the scheme or device is set in motion there is an attempt to evade the tax due under the Act and it will not be necessary to wait till the liability to pay the tax actually arises. If an attempt to evade tax is discovered earlier, the liability to be subjected to penalty is straightaway attracted. In our view, there is no repugnancy between the provision for levy of penalty under section 14-B(7) when an attempt to evade the tax is discovered and the general scheme of the Act which provides for the levy of tax at the point of first sale within the State. The writ petitions are, therefore, dismissed w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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