PARAS LIGHT HOUSE Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) GOODS vehicle No. CRO 8887 called at the sales tax check-post at Nipani and was checked by the respondent-Assistant Commercial Tax Officer. The vehicle was found transporting from the state of Maharashtra, stove burners covered by a bill issued by M/s. Mayur Stove Industries, bombay, in favour of the petitioner. The consignment was physically verified, which revealed that there were two types of burners being transported one described as No. 2 burners and the other as No. 3 burners. The Assistant Commercial Tax Officer was of the view that 685 pieces of no. 3 burners and 657 pieces of No. 2 burners were not covered by any valid documents. A notice under section 28a (4) of the Karnataka Sales Tax Act, was accordingly issued and served upon the driver of the vehicle asking him to show cause why a penalty of Rs. 8,000 be not imposed on account of the goods in question being without proper documents. The driver it appears expressed his unwillingness to avail of the opportunity granted to him and conveyed to the officer that he had no money even to pay the penalty. Consequently, the officer passed an order imposing a penalty of Rs. 8,000 under section 28a (4) of the Act and directed that in the event of failure to pay the penalty amount the goods in question would be auctioned for recovery of the same. Aggrieved the petitioner who is the consignee of the said goods has come up with the present writ petition.

(2.) MR. Gandhi, learned counsel for the petitioner, made a three-fold submission. Firstly he argued that the impugned order levying penalty was in violation of the principles of natural justice in that neither the driver nor the petitioner had any real opportunity to file objections to and oppose the proposed action. Alternatively he urged that the goods in question being in the course of inter-State sales, could not have been seized for the purpose of levy of penalty on the allegation that there was any actual or attempted evasion of tax. The taxable event, contended the learned counsel, would take place only when the goods were sold so that the question of evasion of tax would arise only if and when such a sale was effected. Thirdly it was contended that the provisions of section 28a of the Act and in particular sub-section (4) thereof were ultra vires of the Constitution in so far as the same permitted levy of penalty on the failure of the person carrying the goods to produce proper documents.

(3.) IT is not disputed that the Assistant Commercial Tax Officer had upon physical verification of the goods found a serious discrepancy between the goods being transported and the invoice produced in support thereof. From a plain reading of the show cause notice as also the order imposing the penalty it is apparent that the physical verification of the goods had revealed that as many as 685 pieces of No. 3 burners and 657 pieces of No. 2 burners were without any documents in support of the same. The Assistant Commercial Tax Officer was therefore justified in assuming jurisdiction and proposing a penalty. That a show cause notice was issued by the assistant Commercial Tax Officer and served upon the driver is also not in dispute. What is argued is that the notice did not give a reasonable opportunity to the driver or to the petitioner to file their objections. It is urged that the notice was issued on the 10th March, 1990 and on the very same day, even the order imposing the penalty was also passed, which clearly deprived the petitioner of a fair opportunity to defend itself and oppose the proposed action. There is no substance in this submission for the same overlooks a specific statement made in the impugned order, according to which, upon service of the show cause notice the driver of the vehicle had declined to avail of the opportunity given to him. The following lines from the order are in this regard relevant : "in response to the notice, Shri Syed appeared and requested to unload the goods as he has no money to pay the penalty money. The driver is not ready to avail the given time to explain the defects noticed. "