TMI Blog2015 (1) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... rs through the transporters - a State, making an enactment under Entry 54 of List II of Seventh Schedule would be competent to provide for registration of transporters of goods, intended for sale within or without the State and providing for measures to check evasion of tax, by requiring such registered transporters to file returns and to make declaration as prescribed for effective implementation of the enactments. The power though not specifically enumerated, were held to be incidental and ancillary powers, conferred on the legislature to further the purpose of taxation enactments and to ensure due payment of tax and check evasion thereon - There can be no quarrel that if such provisions are available under a statute, the same have to be upheld on the principles of legislative competence as declared by the aforesaid binding precedents - The reliance placed by the learned Government Pleader, to that extent is only proper - it is not the constitutionality of such provision that arise, and it is the lack of a provision obliging the transporters, to take registration, that has been urged - there is absolutely no bar on the legislature, to provide for registration of transporting a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Association v. Commissioner of Taxes [1999] 2 SCC 253. The learned counsel for the petitioner would further rely on Excel Assay Hallmarking Centre [2013] 21 KTR 468 (Ker) wherein a learned Single Judge considered the constitutionality of a provision regarding registration of Hallmarking Units and upheld the same; to contend that such an inclusion not being available in the Act; the transporting agency would not be liable for registration. 5. For convenience, the definition of dealer under Section 2(xv), is extracted hereunder:- '(xv) dealer means any person who carries on the business of buying, selling, supplying or distributing goods, executing works contract, delivering any goods on hire-purchase or on any system of payment by instalments; transferring the right to use any goods or supplying by way of or as part of any service, any goods directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration not being an agriculturist and includes:- (a) a casual trader; (b) a commission agent, a broker or a del credere agent or an auctioneer or any other mercantile agent, by whatever name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Government, or Government of any Union Territory or any department thereof or any local authority/autonomous body, shall get himself registered under this Act, irrespective of the quantum of his total turnover. (xi) any hallmarking unit. (3) Notwithstanding anything contained in the foregoing sub-sections, an authorised retail or wholesale distributor dealing exclusively in rationed articles under the Kerala Rationing Order, 1966, shall not be liable to get himself registered under this Act. (4) The burden of proving that a dealer is not liable to be registered under this Act shall lie on that dealer. Section 52 reads as under:- Every clearing or forwarding house or agency transporting agency, shipping agency, shipping out agency, railway authorities, operators of leased railway wagons, air cargo authorities or steamer agency in the State shall submit to the assessing authority of the area such returns and information as may be prescribed of all goods cleared, forwarded, transported, or shipped by it. The assessing authority concerned shall have the power to call for and examine the books of account or other documents in the possession of such agenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the sale; the provision for obtaining licence as also furnishing of information would be legitimate. However, the expression documents of title to goods was held to be unclear and having not been defined, as to what it precisely means and persons which it intends to bring within the ambit thereof, the provision was struck down. The mandate in the impugned provision was held to be not a matter ancillary or subsidiary to the legislative entry, being Entry 54 under List II of the VIIth schedule. 9. The decision in Santlal's case (supra) was held to be not applicable to the facts of Tripura Goods Transport Association's case (supra). The question was whether, the impugned provisions intended taxing of transporters resulting in impeding of the transport business, making it beyond the legislative competence and ultra vires Article 246 of the Constitution of India. It was held that when goods are sold and purchased inside or outside the State, the incidence of tax and the quantum of tax has to be ascertained for which it is necessary to identify the dealer, the taxable goods citus of sale and so on and so forth. If a transaction of sale or purchase, escapes the attention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that the clearing and forwarding agents have no proximate connection with the sale or purchase of goods and the recovery of tax in the form of penalty, was hence, bad in law. The Court found that the power to levy a tax includes all incidental powers to prevent evasion of such tax. A brief illustration was struck insofar as the sale price, being net of the freight and such deduction claimed being liable to verification by the taxation authorities. Where there are excessive claims of deduction or fraud is detected, then, necessarily the particulars will have to be called for, from the clearing and forwarding agents, if the transport has been effected through them. The claim that the provisions were outside the scope of ancillary or incidental powers of legislature under Entry 54 of List II and the same having no nexus between such sale or purchase, was again negatived. The penalty sought to be levied was upheld on the basis of it being a deterrent measure and not in lieu of the tax evaded by the owner or dealer. 13. ABC (India) Ltd.'s case (supra) was also a challenge against the provision requiring furnishing of information by clearing and forwarding agents, wherein almo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancillary or incidental power of the State legislature, under Entry 54 of List II, the same cannot be arrogated by the Commissioner, which, in effect, is what has been done by issuance of Circular No.33/2006/CT. Admittedly there is no provision in the KVAT Act, obliging transporting agencies, to take registration thereunder. Hence, though there is no specific prayer to strike down the circular, this Court finds, on the above reasoning, that, the circular is beyond the powers conferred on the Commissioner under Section 3 of the KVAT Act, 2003 and the same is hence, liable to be set aside. 16. The further contention of the State, is with respect to the dealer being enjoined upon, to obtain registration, even as per the definition of 'dealer'. The definition of dealer as has been extracted above, under sub section (xv) of Section 2 does, in the body of the definition, take in only persons engaged in the business of buying, selling, supplying or distributing goods; for cash or for deferred payment or for commission or remuneration or for other valuable consideration. A transporting agency does not indulge in such activity and merely charges the freight for the transport of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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