MEENAMBIKA COMPANY Vs. STATE OF MADRAS

JUDGEMENT

(1.) A lorry carrying 115 bags of toor dhall was stopped on the outskirts of Coimbatore by the Special Assistant Commercial Tax Officer. The driver of the lorry though he had the necessary trip sheets did not have the bill of sale or delivery note. The driver however stated that the goods belonged to the consignee of a railway consignment and that he was carrying the goods to the premises of the consignee. The driver was also able to furnish the particulars of the consignor and consignee and to explain how he came to be transporting the goods. He was also possessed of a letter authorising the consignee's representatives Meenambika & Co., to pay the charges for the conveyance. The Special Assistant Commercial Tax Office, who checked this consignment, immediately proceeded to issue a notice in Form No. 53 of the Madras General Sales Tax Rules, 1959. This notice called upon the driver of the lorry to pay in lieu of confiscation of the goods, a sum of Rs. 276.

(2.) THE notice did not state what conditions prescribed by the Act or the Rules had been violated but merely stated that the conditions prescribed in rule 36(1) of the Madras General Sales Tax Rules, 1959, had been violated and that the goods were liable to be confiscated under rule 36(2) of the said Rules. It appears that the driver immediately contacted the owner by phone and the owner appeared and paid the money. THEreafter the owner, Sri Meenambika Company, moved the Appellate Assistant Commissioner by appeal challenging the order levying penalty in lieu of confiscation. THE Appellate Assistant Commissioner went into the matter at some length and with great care, and came to the conclusion that the entire proceedings had been misconceived and misapplied. He found that before ordering confiscation or demanding payment of any penalty in lieu of confiscation, the provision of the law and the rules required that notice should be given to the "person affected", that is to say, the owner of the goods though the driver furnished full particulars of the owner of the goods in this regard, the officer gave no notice whatsoever to the owner but proceeded to impose the penalty and demand payment of the penalty by the driver. He hale that so long as the owner of the goods could be ascertained, it was not competent for the officer to proceed against a person who was merely in charge of the goods.

(3.) PROVIDED that before ordering confiscation the officer shall give the person affected an opportunity of being heard and make an inquiry in the prescribed manner. PROVIDED further that the officer ordering the confiscation shall give the person affected option to pay in lieu of confiscation ........." Sections 43 and 44 lay down the particular documents which should be carried by the person in possession of the goods under transport. It is not necessary to refer to them. In so far as the operative part of section 42(3) is concerned, the power to confiscate the goods cannot be exercised unless and until the officer gives the person affected an opportunity of being heard and makes an enquiry into the matter. It is quite obvious that the enquiry contemplated by the first proviso is intended to ensure that the officer, on the materials before him, reaches the conclusion that the goods are confiscable for such reasons as are laid down in the section. Before, therefore, any order of confiscation can be passed, there has to be an enquiry and of this enquiry due notice has to be given to the person affected.