TMI Blog2001 (12) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... crates, wooden cable, drums and veneers etc. The interstate sale attracts central sales tax. It has to be collected by the dealers from the purchasers. Under Section 29(2) of the K.G.S.T. Act, the purchasers are entitled to transport goods when the same is accompanied by sale bills. With effect from 17.8.2000 onwards, goods were detained at the checkpost demanding payment of central sales tax as a condition for allowing transport of goods, pursuant to letter dated 17.8.2000 (Ext. P1 in O.P. No. 27550/2000-D) issued by the Commissioner, Commercial Taxes, Thiruvananthapuram, which reads as follows:- It has come to notice that large scale evasion of tax is being practised by a number of dealers in packing case, splints, and veneers, tea chests, wooden crates, wooden cable, drums and veneers. It is therefore directed that interstate transportation of the above commodities shall be only on the strength of Department Delivery notes and that endorsement of payment of advance tax in the Delivery Note shall be insisted for the transport, by all checkposts and inspecting officers. The advance tax is to be collected by the assessing authority taking into account the invoice/bill value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified area, or nay other place when so required by any officer empowered by the Government in that behalf, for the purpose of enabling such officer to verify the documents required by Sub-section (2) of Section 29 to be in the possession of the person transporting the goods and to satisfy himself that there is no evasion of tax. (2) If such officer has reason to suspect that the goods under transport are not covered by proper and genuine documents (in cases where such documents are necessary) or that any person transporting the goods is attempting to evade payment of the tax due under this Act, he may, for reasons to be recorded in writing, detain the goods and shall allow the same to be transported only on the owner of the goods, or his representative or the driver or other person in charge of the vehicle or vessel on behalf of the owner of the goods, furnishing security for double the amount of tax likely to be evaded; as may be estimated by such officer. ] Section 29A (2B): [(2B) If such officer has reason to believe that the tax exigible on the sale or purchase of goods under transport is not paid, or the dealer whose goods are transported is in default of payment of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e levy and proper collection of taxes are concerned, the Commissioner is competent to issue orders, instructions and directions. If the letter (Ext. P1 in O.P. No. 27550/2000) as modified by Ext. R(b) is analysed in the background of Section 3(1A), it is crystal clear that the Commissioner acted only within his jurisdiction in issuing appropriate orders or directions for the proper administration of the Act and hence it cannot be said that the Commissioner lacks jurisdiction. Section 9(2) of the C.S.T. Act also indicates such a source of power. 7. Since Ext. P1 in O.P. No. 27550/2000 is modified by Ext. R(b) only the following instructions are now in force: 2. Dealers association shave brought to notice that this creates some hardship in the case of dealers in splints and veneers for matches who sell small quantities interstate and where consignment relating to a number of dealers have to be transported in the same lorry. It is also pointed out that since in the case of packing cases, consignment will have to be sent immediately the product in ready remitting tax for each becomes difficult especially when the date of transport falls on a holiday. 3. In the circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the specific instances, in paragraph 6 of the Counter affidavit, it is stated as follows: Verification of the declaration in Form No. 27B, filed at the Check Posts showed that the petitioner had used two sets of sale bills. In one set, the name of the firm was printed in comparatively smaller size letter with words cash/credit bill shown as Cash/Bill . In the second set of bills, the name of the firm was printed in bold letters with the words cash/credit bill printed as Cash/Credit Bill . In the statement of sales filed along with the returns sales as per one set of bills only were included suppressing the sales as per the second set of sale bills. The petitioner had used bills from the two sets of bills at a time with the same serial numbers but reported turnover as per one set of sale bills only. 9. Various other instances are also referred to in the counter affidavit. It is shocking to note from Ext. R(a) chart in O.P. No. 27550/2000, that the dues in respect of 24 dealers come around ₹ 3 crores and it also to be noted that the Department was not able to realise the said amount from the dealers since all of them were found to be possessed with no sufficient mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enforced in a manner so as to detain the goods at the checkposts as it was not warranted under Section 29A(2B) of the Act. However, the Commissioner cannot be faulted in insisting for security and it will be within their powers to insist that Department Delivery Notes should be used for the transportation, as there is sufficient indication to show that several dealers had not been always straight forward in their dealings as averred in the statement filed. I can also find that Ext. P3 could be found as permissible in view of the powers vested on the Commissioner under Section 3(1A)(c) of the K.G.S.T. Act. 6) I do not think that interference in Ext. P3 is therefore warranted. It is only a reasonable restriction on the assessee that he should obtain Departmental Delivery Notes, since it is insisted for securing the interests of the Revenue and for avoiding misuse of facilities. There is no element of harassment as alleged. It also does not run counter to the statute. 11. Ramachandran, J. has taken the view that the circular was issued in the interest of Revenue. In other words the same was issued for ensuring proper collection to tax and for avoiding evasion of tax. The learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision has no application in the instant cases since the taxable event under the Act has not reached. Further, the respondents also do not have a case that the petitioners are defaulters of tax or any other amount due under the Act. The proviso to Sub-section of Section 29A is also relevant in this context. Sub-section (3) provides that the officer detaining the goods shall record the statements, if any, given by the owner of the goods or his representative or the driver or other person in charge of the vehicle or vessel and shall submit the proceedings along with the connected records to such officer not below the rank of Sales Tax Officer as may be authorised in that behalf by the Government, for conducting necessary inquiry in the matter. The manner of inquiry is provided under Sub-section (4) which provides for adjudication of the matter and imposition of penalty in case such officer finds that there has been an attempt to evade the tax due under the Act. It is in this context the proviso to Sub-section (3) has significance. It provides that where tax is collected under the second proviso to Sub-section (2) or under Sub-section (2B), no enquiry under this Sub-section shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 29A of the Act. But it is not necessary to refer the matter to a Division Bench for reasons more than one. Firstly, it has to be seen that the former decision in Reshma Timbers's case is in respect of the very same impugned order, whereas the latter decision in Rijo Jacob's case was on a general principle. That apart, there is no discussion in Rijo Jacob's case as to the source of power of the Commissioner under Section 3(1A) of the Act or Section 9(2) of the C.S.T. Act and the decision centers round only the exercise of power by the departmental officers under Section 29 and 29A at the checkposts. It has also to be seen that it was case of undervaluation in the matter of transport of chicken or chicken meat to Kerala and there was a circular on estimate of weight according to size of vehicle and that was under challenge. Thirdly in Reshma Timbers's case the taxable event had already occurred whereas in Rijo Jacob's case, it was a case where the event had not taken place,or the taxable event was outside the State. 13. There is a binding decision on the related issue which unfortunately was not brought to the notice of the learned judges in both cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse only after assessment, immediately payable, in cases where goods are sought to be transported beyond the limits of the State before assessment and payment of tax in the normal course and authorising officers at the check-post to demand and collect such tax if not already paid. It is a provision which directs payment to tax even before assessment in cases coming within the purview of the Sub-section subject to the condition that the tax paid is to be credited to the account of the dealer to be adjusted at the time of assessment. In that sense alone it can loosely be called advance tax. As a necessary corollary, we have also to accept the contention of the appellants that the provision authorises realisation of tax contrary to the normal procedure prescribed of assessment and collection of tax under the Act. 17. If that be the legal effect of the impugned provision, whether it will be bad in law for any of the reasons stated in the Original Petitions and the Memorandum of Appeal is the further question to be considered. In the light of our finding that the liability for tax arises on the conclusion of each sale or purchase of goods, the provision can be treated as a provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. The circular in the circumstances can only be considered as one issued for the effective implementation of the authorisation given as per the Sub-section and is fully within the powers of the Board under Section 3(1A) of the Act. 14. In view of the authoritative pronouncement on the Legislative intent and competency in the matter of Circular, it is not necessary to deal with that aspect. Hence also it is not necessary to place the matter before a Division Bench. 15. The petitioners also had another contention that they are discriminated since the instance is only in respect of a few items. There is also an argument that if there are erring dealers, they can be proceeded against and there need not be general direction. It is now well settled that in fiscal statutes, it is open to the State to follow its own classification and unless it is shown that there is discrimination within a class, the classification is not open to challenge on the ground of violation of Article 14 of the Constitution of India. In the instant case, as already noted from the counter affidavit, the classification is well founded and reasonable. Hence it is not necessary to consider the said contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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