TMI Blog2004 (8) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... ab State), the driver of the vehicle produced challan-cum-stock transfer invoice duly issued by the GAIL and the goods receipt, wherein details of the goods were clearly mentioned. In spite of this, the detaining officer gave notice, annexure P.4, wherein it was mentioned that goods carried in the vehicle were covered by the vehicle receipt and the bill (challan-cum-stock transfer invoice). Reasons for suspicion mentioned are that the goods are being sent from GAIL India to United Polymer, whereas one firm cannot transfer the goods to other firm by way of stock transfer. On March 22, 2004, representative of the petitioner appeared before the detaining officer and in the written explanation submitted on March 26, 2004, agreement dated November 5, 2003 between GAIL India and the petitioner was also produced and it was submitted that there was no attempt to evade tax in any manner. It was also stated that the stock register, etc., were also being produced to verify transactions. Vide order dated April 9, 2004, penalty was imposed and bank guarantee which had been furnished by the petitioner for release of goods was sought to be encashed. It is stated that before encashing the bank gua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... livery note containing such particulars, as may be prescribed, in respect of such goods meant for the purpose of trade, as are being carried in the goods vehicle and produce a copy of each of the aforesaid documents to an officer-in-charge of a check-post or information collection centre or any other officer not below the rank of an Excise and Taxation Officer checking the vehicle at any place: Provided that a dealer selling the goods from within the state or outside the State in the course of inter-State trade or commerce, shall also furnish a declaration with such particulars, as may be prescribed. (3) At every check-post or information collection centre or at any other place when so required by an officer referred to in sub-section (2), the driver or any other person-in-charge of the goods vehicle shall stop the vehicle and keep it stationary, as long as may reasonably be necessary, and allow the officer-in-charge of the check-post or the information collection centre or the aforesaid officer to check the contents in the vehicle by breaking open the package or packages, if necessary, and inspect all records relating to the goods carried, which are in the possession of the dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r transport, maintained by him in the prescribed manner. The Commissioner or the person so appointed shall, for the purpose of examining that such transport receipts or other documents or account books are in respect of the goods carried transported, loaded, unloaded or consigned or received for transport, have the powers to break open any package, or packages of such goods. (6)(i) If the officer-in-charge of the check-post or information collection centre 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 (3) or that the person transporting the goods is attempting to evade payment of tax, he may, for reasons to be recorded in writing and after hearing the person concerned, order the detention of the goods along with the vehicle for such period, as may reasonably be necessary. Such goods shall be released on furnishing a security or executing a bond with sureties in the prescribed form and manner by the consignor or consignee, if r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n writing and after hearing the person concerned, order the detention of the goods along with the vehicle for such period, as may reasonably be necessary. Such goods shall be released on furnishing a security or executing a bond with sureties in the prescribed form and manner by the consignor or consignee, if registered under the Act to the satisfaction of the officer detaining the goods and in case the consignor or the consignee is not registered under the Act, then on furnishing a security in the form clauses (ii) and (iii) of sub-section (7) against a proper receipt in the prescribed manner. (8) If the consignor or consignee of the goods or his representative does not furnish security or does not execute the bond as required by sub-section (6), within ten days from the date of detaining the goods vehicle, the officer referred to in that sub-section, may order further detention of the goods and in the event of the consignor or consignee of the goods not paying the penalty imposed under subsection (7) within twenty days from the date of the order imposing the penalty, the goods detained shall be made liable to be sold by the officer, who imposed the penalty for the realisation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Explanation. For the purposes of sub-section (7), service of notice on the representative of the owner or the driver or other person-in-charge of the goods vehicle, shall be deemed to be a valid service on the consignor or consignee of the goods." 7.. Under the above provision, if there is any reasonable suspicion of evasion of tax, the detaining authority is justified in detaining the goods and holding an enquiry into the matter. Though, this power is necessary to safeguard the interest of Revenue and to check evasion of tax, this provision is not intended to confer any arbitrary power on the detaining officer to detain goods without any rhyme or reason under the colourable exercise of such power. Such abuse of power is required to be checked lest it should become a source of abuse of authority or violation of legitimate rights of citizens. 8.. In the present case, relevant documents, viz., goods receipt as well as stock transfer invoice were duly produced. The consignor is a Government of India undertaking. There is no law that consignor and consignee must be the same person. The petitioner produced the agreement showing that it was the agent of the consignor before the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e examined even in exercise of writ jurisdiction to check abuse of authority. There was also no justification to recover penalty without supplying a copy of order of penalty or without conveying such an order to the affected party. The sales tax is leviable only if there is a sale or purchase and not when transfer of consignment of goods by a principal to the agent. There is no question of levy or evasion of sales tax on admitted facts. 10.. For the above reasons, this petition is allowed. The orders regarding detention of goods and penalty are quashed. 11.. It appears, prima facie, that the detaining authority and the authority passing the order of penalty did not act fairly and did not have minimum knowledge of law expected from such authorities, to safeguard the interest of the Revenue as well as the rights of citizens. We, therefore, direct the Commissioner, Sales Tax, Punjab, to examine this aspect of the matter after giving due opportunity to the concerned officers and take appropriate action in accordance with law. The State will be liable to pay costs, quantified at Rs. 10,000, which it will recover from the erring officers. Writ petition allowed. - - TaxTMI - TM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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