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TMI Blog2008 (8) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... by valid bill and goods receipt. However, such consignment was detained by the Incharge, Information Collection Centre. The order of detention of goods and vehicle was passed on June 5, 2003. The petitioner submitted his written explanation and documents on June 9, 2003. However, no final decision was taken by the competent authority. The goods were released against surety bonds and proceedings were sent to the Assistant Excise and Taxation Commissioner on July 7, 2003 for taking action under section 14B(7)(ii) of the State Act. The proceedings could not be finalised but after joining of the officer Shri Amrik Singh, Assistant Excise and Taxation Commissioner, the proceedings were re-initiated and finalised on May 26, 2004 and a penalty of Rs. 9 lacs was imposed. The petitioner has challenged the said order in the present writ petition on the ground that such order could not have been passed after the expiry of 14 days of seizure of the goods and the vehicle, which is on June 5, 2003 in terms of section 14B(7)(ii) and (iii) of the State Act. A Division Bench of this court reported as Amrit Banaspati Company Ltd. v. State of Punjab [2001] 122 STC 323 considered the legality and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and release of the goods and the vehicle. Such order is required to be passed after recording reasons and within a period of 14 days of commencement of the enquiry proceedings. The relevant extract from section 14B of the State Act reads as under: "Section 14B. Establishment of check-post or information collection centres and inspection of goods in transit.-(1) to (6)... (7)(i) The officer detaining the goods under sub-section (6), shall record the statement, if any, given by the consignor or consignee of the goods or his representative or the driver or other person-incharge of the goods vehicle and shall require him to prove the genuineness of the transaction before him in his office within a period of seventy two hours of the detention. The said officer shall, immediately thereafter, submit the proceedings along with the concerned record to such officer, as may be authorised in that behalf by the State Government for conducting necessary enquiry in the matter. (ii) The officer authorised by the State Government shall, before conducting the enquiry, serve a notice on the consignor or the consignee of the goods detained under clause (i) of sub-section (6), and give him an opport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be passed after the expiry of prescribed period under section 14B(7)(ii) and (iii) of the State Act. Learned counsel for the petitioner relied upon the judgment of this court reported as State of Haryana v. Rajeshwar Parshad [1978] 42 STC 196 and single Bench judgment of this court reported as Hardit Singh Bhagat Singh v. Excise and Taxation Officer, Assessing Authority, Ludhiana [1982] 49 STC 56 and of the Calcutta High Court in State of West Bengal v. Sarda & Sons [1977] 40 STC 419. On the other hand, learned State counsel has relied upon Topline Shoes Ltd. v. Corporation Bank [2002] 6 SCC 33, P.T. Rajan v. T.P.M. Sahir [2003] 8 SCC 498, V.K. Verma v. Hindustan Machine Tools Limited, Pinjore [1993] 2 PLR 762 to contend that the provisions of section 14B(7) (ii) and (iii) of the State Act are directory in nature. The Excise and Taxation Officer while discharging the duties of an officer competent to levy penalty acts as a quasi-judicial officer, therefore, failure to pass an order within 14 days will not result into abatement of proceedings. We have heard learned counsel for the parties at length. In Rajeshwar Parshad's case [1978] 42 STC 196 , a Division Bench of this co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court held that section 11(4) deals with the case of a dealer who has furnished returns in respect of a period and thereafter has been asked to produce evidence to support the returns but has failed to do so. It was held that the reason for such provision is that the correctness of the returns has been doubted by the assessing authority, but the dealer has not availed himself of the opportunity afforded to him to remove the doubts. The sub-section provides that the power can be exercised within three years. In other words, the power cannot be exercised after three years having gone by. The said judgment is also not helpful to the controversy raised in the present petition. The question whether the period of three years is directory or mandatory was not raised. In fact, the said question did not arise as the return filed was sought to be disputed by the assessing authority. As in the absence of best judgment assessment finalised by the assessing authority within the time prescribed, the returns already filed would be deemed to be proper returns, whereas, in the case in hand, there is no return which can be said to attain finality. There is no past proceeding or the order whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment of India or a State Government are not mandatory in spite of the use of words "shall" therein. In Banwarilal Agarwalla v. State of Bihar AIR 1961 SC 849, a Constitution Bench of the Supreme Court held that no general rule can be laid down for deciding whether any particular provision in a statute is mandatory, meaning thereby that non-observance thereof involves the consequence of invalidity or only directory, i.e., a direction the non-observance of which does not entail the consequence of invalidity, whatever other consequences may occur. But, in each case, the court has to decide the legislative intent. The courts have to consider not only the actual words used but the scheme of the statute, the intended benefit to public of what is enjoined by the provisions and the material danger to the public by the contravention of the same. In State of Mysore v. V.K. Kangan AIR 1975 SC 2190, the Supreme Court held that in determining the question whether a provision is mandatory or directory, one must look into the subject-matter and the relation of that provision to the general object intended to be secured. It was held that, no doubt, all laws are mandatory in the sense they imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is more by way of procedure to achieve the object of speedy disposal of such disputes. It is an expression of desirability in strong terms. But it falls short of creating any kind of substantive right in favour of the complainant reason of which the respondent may be debarred from placing his version in defence in any circumstances whatsoever. In V.K. Verma's case [1993] 2 PLR 762, this court was examining an argument raised on the basis of section 33(5) of the Industrial Disputes Act, 1947, contemplating that the authority should hear and decide the application within a period of three months. It also authorises the authority to extend the time. It was held to the following effect: "Sub-section (5) makes it obligatory on the authority to hear the application without delay and pass appropriate orders. Sub-section (5) does contemplate that the authority should hear and decide the application within a period of three months. However, it also authorises the authority to extend the time. It also provides that no proceedings before any such authority shall lapse merely on the ground that any period specified in this sub-section had expired without such proceedings being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory duty within the time prescribed therefor, the same would be directory and not mandatory. (See Shiveshwar Prasad Sinha v. District Magistrate of Monghyr AIR [1966] Patna 144, Nomita Chowdhury v. State of West Bengal [1999] 2 Cal LJ 21 and Garbari Union Coop. Agricultural Credit Society Ltd. v. Swapan Kumar Jana [1997] 1 CHN 189). 49.. Furthermore, a provision in a statute which is procedural in nature although employs the word 'shall' may not be held to be mandatory if thereby no prejudice is caused. (See Raza Buland Sugar Co. Ltd. v. Municipal Board, Rampur, AIR 1965 SC 895, State Bank of Patiala v. S.K. Sharma [1996] 3 SCC 364, Venkataswamappa v. Special Deputy Commissioner (Revenue) [1997] 9 SCC 128 and Rai Vimal Krishna v. State of Bihar [2003] 6 SCC 401)." A Division Bench of this Court in Somany Pilkington's Ltd., Naraina Industrial Area, Phase I, New Delhi v. Commissioner of Income-tax (Haryana), Rohtak ITR Nos. 40 and 41 of 1991, decided on December 3, 2004, examined the provisions of section 254(2A) of the Income-tax Act, 1961, which contemplated that the Appellate Tribunal may hear and decide the appeal within a period of four years from the end of the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease of the goods and the vehicle, the conclusion of enquiry proceedings within 15 days is to impose a duty on the enquiry officer to complete the proceedings expeditiously but it does not follow that any departure from it shall taint the proceedings with fatal blemish. The provision is more by way of procedure to achieve the object of speedy disposal of such disputes. It is an expression of desirability in strong terms. But it falls short of creating any kind of substantive right in favour of the petitioner so as resulting into adjudicating proceedings pertaining to evasion of tax as abated. The provisions of section 14B have been enacted for avoiding evasion of tax during the course of movement of goods from one State to another. For facility of movement, the provision of releasing of the goods and the vehicle ensures the release of the goods and the vehicle within 72 hours but the adjudication process of evasion of tax is dependent upon number of factors including co-operation of consignor or consignee, as the case may be. The principles of natural justice are also required to be complied with. The officer entrusted with the duty of adjudication may have certain limita ..... X X X X Extracts X X X X X X X X Extracts X X X X
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