ASSISTANT COMMERCIAL TAX OFFICER Vs. RUBY TRADERS

JUDGEMENT

(1.) On September 14, 1989 at the check-post of Zalki Cross, Indi Taluk a goods vehicle bearing registration No. ADD 1132 was intercepted. The vehicle was in-charge of the driver Nagaraj. The vehicle was searched and was found to carry various quantities of goods. The duty officer called upon the driver to produce the documents for the goods found in the truck. The driver could not produce a single document. The duty officer thereupon served notice upon the driver as prescribed under Section 20-A(4) of the Karnataka Sales Tax Act, 1957 (for short "the Act"), to show cause why penalty of Rs. 62,510 should not be levied. The statement of the driver was recorded and the driver conceded that though he contacted the transporter at Bombay he was not in a position to produce any valid document to indicate that the goods were in transit. After considering the statement of the driver the A.C.T.O. imposed a penalty of Rs. 62,510 and directed that the goods shall not be released unless the penalty amount was paid.

(2.) Amongst the goods found in the truck were Navalgin tablets contained in 35 cartons. The respondent Ruby Traders are carrying on business at Madras and/preferred writ petition under article 226 of the Constitution in this Court on December 26, 1989 claiming that the order imposing penalty has to be set' aside as the levy of penalty in respect of 35 cartons of Navalgin tablets was unsustainable. The penalty levied in respect of the 35 cartons of Navalgin tablets was Rs. 38,260 and it is part of the total penalty of Rs. 62,510. The contention of the respondent was that the goods were purchased in Bombay from one S.K, Traders and were handed over to the transporters, Deccan Madras Transports for delivery at Madras. The respondent claims that Ruby Traders were both consignors and consignees of the goods and the mere fact that the driver did not have the necessary documents at the time of the search would not make the respondent liable to pay the sales tax as claimed by the impugned order. The writ petition was resisted by the appellants who inter alia, pointed out that what was demanded by the impugned order was not the sales tax but the penalty for not carrying the requisite documents while passing through the State. The respondents also pointed out that the copies of the alleged invoices produced by the respondents are not genuine documents because on enquiry it was found that the Bombay sales tax number mentioned in the copy of the invoice was not that of S.K. Traders but one of M/s. Abdul Hussain Karemullah Bhoy. In respect of this claim the respondents relied on a letter received by the Deputy Commissioner of Commercial Taxes, North Zone, Belgaum, from the Deputy Commissioner of Sales Tax, Enforcement (B) dated February 17, 1990.

(3.) The learned single Judge by order dated September 13, 1990 came to the conclusion that though the truck driver did not carry any document, the respondents are not liable for payment of penalty because there was no dispute that respondent carries on business at Madras and respondent is not a fictitious person. The learned single Judge was impressed by the fact that the respondent is a registered dealer in Madras and claims the consignment was meant to be delivered at Madras in view of the invoices produced. The learned judge overlooked the objection of the appellants that the documents produced in support of the petition were not genuine. The learned Judge in the light of the findings arrived at by him directed that the levy of penalty was unwarranted so far as the goods claimed by the respondents. The trial Judge also imposed costs of Rs. 500 on the appellant. The order of the learned single Judge is under challenge now.