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TMI Blog2003 (4) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... r challenged the detention of the goods and also the constitutionality of section 14-B of the Act in C.W.P. No. 11232 of 2002, but withdrew the same on July 23, 2002. After two days, the petitioner's proprietor arranged a bank guarantee of Rs. 37,01,302 from Punjab National Bank, Kikkar Bazar Branch, Bhatinda (for short, "the Bank") and approached respondent No. 2 for release of goods in terms of section 14-B(6)(ii) of the Act, but instead of releasing the goods, he passed an order imposing penalty of Rs. 37,01,302. He then accepted the bank guarantee and released the goods at about 6.00 P.M. The grievance of the petitioner is that respondent No. 2 did not supply copy of the penalty order and got the bank guarantee encashed with an ulterior motive of depriving it of the right to avail the remedy of appeal. In paragraphs 5 to 12 of the writ petition, the petitioner has given vivid details of the events which took place between July 25, 2002 and July 30, 2002. These include the passing penalty order by respondent No. 2 on July 25, 2002, release of goods at about 6.00 P.M., sending of special messenger by respondent No. 2 from Ludhiana to Bhatinda to get the bank guarantee encashed, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he has admitted that some person of respondent No. 2 had contacted him on July 26, 2002 with the request to issue demand drafts in respect of the bank guarantee. Accordingly, the bank issued demand drafts payable at R.C.C. Branch at Ludhiana. 5.. In his written statement, respondent No. 4 has averred that he had received four demand drafts dated July 26, 2002 issued by Kikkar Bazar, Bhatinda Branch of the Bank and the same were cleared on July 29, 2002 at about 11.00 A.M. Thereafter, he received a special fax message at 12.17 P.M. on the letter-head of Shri Kashmiri Lal Goyal, Advocate, vide which he informed that the High Court has granted stay in the matter. However, by that time the payment had been released. 6.. The petitioner has filed replications to the written statements of respondent Nos. 1 and 2 and respondent No. 4. In paragraph 5 of the first replication, it has denied the allegation that attempt was made to influence or pressurise respondent No. 2 for releasing the goods without payment of penalty. In the second replication, it has reiterated that Manager of R.C.C. Branch of the Bank at Ludhiana had intentionally encashed the demand drafts after coming to know of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7). The amount of any tax, penalty or interest payable under this Act shall be paid by the dealer in the manner prescribed, by such date as may be specified in the notice issued by the Assessing Officer for the purpose and the date so specified shall not be less than fifteen days and not more than thirty days from the date of service of such notice: Provided that the Assessing Authority may, with the prior approval of the Assistant Excise and Taxation Commissioner, incharge of the district extend the date of such payment or allow payment by instalments against an adequate security or bank guarantee. ................…….. 14-B. Establishment of check-posts or information collection centers and inspection of goods in transit.--(1) to (5) ……………….. (6)(i) If the Officer-in-charge of the check-post or information collection center or any other officer as mentioned in sub-section (2), has reasons to suspect that the goods under transport are meant for trade and are not covered by proper and genuine documents as mentioned in sub-section (2) or sub-section (4), or the driver has not stopped the vehicle as required under sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer finds that the documents as required under sub-sections (2) and (4), were not furnished at the information collection center or the check-post, as the case may be, with a view to attempt to avoid or evade the tax due or likely to be due under the Act, he shall by order for reasons to be recorded in writing, impose on the consignor or consignee of the goods, penalty equal to fifty per cent of the value of the goods involved. In case, he finds otherwise, he shall order release of the goods for sufficient reasons to be recorded in writing. He may, however, notwithstanding anything contained in clause (ii) of sub-section (6) order release of the goods and the vehicle on furnishing a security by the consignor or the consignee in the form of cash or bank guarantee or crossed bank draft for an amount equal to the amount of penalty imposable and shall decide the matter finally within a period of fourteen days from the commencement of the enquiry proceedings; (iii) The officer referred to in clause (ii), before conducting the enquiry, shall serve a notice on the consignor or consignee of the goods detained under clause (ii) of sub-section (6), and give him an opportunity of being hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods if he is satisfied that the required documents were not furnished at the information collection centre or the check-post with a view to attempt to avoid or evade the tax. However, if he does not find any violation of the provisions of section 14-B, then the goods are to be released. A person aggrieved by an order of penalty can file an appeal under section 20 within the prescribed period of limitation. Section 11(7) of the Act lays down that the dealer should pay the amount of any tax, penalty or interest payable under the Act by such date as may be specified in the notice issued by the Assessing Officer which shall not be less than 15 days and not more than 30 days from the date of service of such notice. 11.. The above analysis of the relevant provisions shows that for imposing penalty under section 14-B(7)(iii), the competent authority is required to hear the consignor or the consignee and then pass a reasoned order. The person against whom penalty is imposed can avail of statutory remedy of appeal subject to payment of 25 per cent of the penalty imposed along with interest accrued thereon [section 20(1) and (5)]. In our opinion, the duty to communicate the penalty or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the requirement of recording of reasons and communication thereof by every quasijudicial authority. We, therefore, hold that the officer who imposes penalty under section 14-B(7)(iii) of the Act is under legal obligation to supply copy of the penalty order to the affected person. 13.. In M/s. Oswal Agro Mills Ltd.'s case (CWP No. 19651 of 2002 decided on May 30, 2002-Punjab and Haryana High Court) and Latest Collection's case (CWP No. 5647 of 2002 decided on May 30, 2002-Punjab and Haryana High Court) this Court adversely commented upon the action of the assessing officer in taking coercive measures against the assessee without supplying the copy of order of assessment/penalty. Some of the observations made in the second case read as under: "This is a typical instance indicative of the manner in which the Excise and Taxation Department in the State of Punjab is functioning. A demand for a substantial amount of more than Rs. 14 lacs was raised without even communicating the order of assessment to the assessee. Summons for appearance and payment were issued. Obviously, there was a veiled threat of arrest. Why was the order of assessment not supplied? The only explanation trotted ou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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