DIVISIONAL COMMERCIAL MANAGER Vs. INTELLIGENCE OFFICER

JUDGEMENT

(1.) General Manager, Southern Railway, Madras along with two others have approached this Court under Articles 226 and 227 of the Constitution of India seeking a writ of mandamus directing the Commissioner of Commercial Taxes, Government of Kerala to issue necessary direction to his subordinate officials to refrain from taking action under the Kerala General Sales Tax Act against the Station Masters and other authorities in the various railway stations in the State in discharge of their duties of booking goods and dealing with booked consignments under the provisions of the Railways Act.

(2.) Third petitioner in the Writ Petition was served with a notice dated 5.11.1998 under Section 46/45A of the Kerala General Salestax Act, 1963, for short "the Sales Tax Act", by the Intelligence Officer, Squad No. II, Commercial Taxes, Trivandrum proposing to impose penalty of Rs. 36,400/- under Section 45A of the Sales tax Act presumably on the ground that the third respondent had not co-operated with the Sales tax Authorities in discharge of their duties in the transportation of 150 bags of red chillies as parcel goods on 5.11.1998 at the Varkala railway station facilitating evasion of salestax. Intelligence Officer, Commercial Taxes had then sent a letter dated 10.12.1998 to the first petitioner informing about the non co-operation of the Station Master and also questioning the legality of the direction of the Commercial Manager, Southern Railway not to comply with the directions of the Commercial Taxes Department of Kerala. The steps taken to serve notice adopting the procedure contained in O.V Rule 27 of the Code of Civil Procedure was also informed. Third petitioner was later served with an order dated 14.5.1999 imposing penalty of Rs. 36,400/- under Section 45A(1)(g) of the Sales tax Act stating that he had deliberately contravened Section 29A(4) of the Sales tax Act which led to evasion of tax amounting to Rs. 18,200/- besides the tax due under Section 5. Third petitioner was also served with a notice for payment of penalty under Section 45A read with Section 31A(2). Similar notices were sent to officials of other railway stations as well.

(3.) Railways and its officials are deeply aggrieved by the proceedings initiated against them by the authorities constituted under the Salestax Act and have approached this Court to quash those proceedings. Railways and its officials took up the stand that they are governed by the provisions of the Railways Act, 1989 and the Rules made thereunder and not by the provisions of the Salestax Act or the Rules. Commercial Tax Officer and others took up the stand that when the Station Masters and other officials of the Railways are not co-operating with the Officials functioning under the Salestax Act, they have got the legal right to enforce the provisions of the Salestax Act against the officials of the Railways and therefore imposition of penalty under Section 45A of the Salestax Act and the steps taken pursuant thereto are legal and valid.