SODHI TRANSPORT COMPANY Vs. STATE OF U P

JUDGEMENT

(1.) By means of these petitions the petitioners have challenged their liability to tax under the U. P. Sales Tax Act (hereinafter referred to as the Act) principally on the ground that Section 28-B of the Act and rule 87 of the U. P. Sales Tax Rules are ultra vires the powers of the State Legislature.

(2.) The case set up by the petitioners is that they carry on the business of transporting goods from one State to another throughout the territory of India either in vehicles owned by them or hired from others. The petitioners' offices outside the State of Uttar Pradesh book goods of various customers for transportation to various States other than the State of Uttar Pradesh. The vehicles carrying these goods transported from a State outside the State of Uttar Pradesh to a different State pass through the State of Uttar Pradesh. Sometimes when the journey of the vehicles is too long from one State to another State, the goods brought in by the vehicles are unloaded in the State of Uttar Pradesh and reloaded on different vehicles and despatched to the destination States. For the goods booked by the petitioners from various places outside the State of Uttar Pradesh the petitioners issue chalans containing the details of the goods booked by them to be delivered to different places in different States. The goods transported by the petitioners do not belong to them and they do not carry on the business of purchase or sale of the goods directly or indirectly, through the agents or otherwise. The petitioners are paid only transportation charges. They are not dealers within the meaning of the Act and have no turnover of any kind as contemplated by the Act and consequently the petitioners are neither required to get themselves registered in the manner prescribed nor are liable to tax under the Act. The petitioners have been made liable to tax under the Act by enacting Section 28-B and rule 87 which are beyond the legislative competence of the State Legislature or unreasonable and unworkable and hence violative of Articles 14 and 19(1)(g) of the Constitution and are also violative of Article 301 of the Constitution. It has also been asserted that the petitioners are not dealers and consequently not liable to tax.

(3.) Section 3 of the Act is the charging section. It makes a dealer liable to pay tax for each assessment year at the rates provided by or under Section 3-A or Section 3-D on his turnover of sales or purchases, as the case may be. With a view to prevent evasion of tax or other dues payable under the Act various provisions have been made in the Act. In respect of sale of goods within the State after their import into the State, the State Government by Section 28 of the Act is empowered, by notification in the Gazette, to direct the establishment of check posts or barriers at such places within the State as may be specified in the notification. Section 28-A is concerned with a case where any person intends to bring, import or otherwise receive, into the State from any place without the State, any goods liable to tax under the Act in such quantity or measure or of such value as exceeds the quantity, measure or value notified by the State Government in that behalf, in connection with business. Section 28-B deals with transit of goodsby road through the State. Section 28-B with which we are concerned in these petitions provides : When a vehicle coming from any place outside the State and bound for any other place outside the State passes through the State, the driver or other person-in-charge of such vehicle shall obtain in the prescribed manner a transit pass from the officer-in-charge of the first check post or barrier after his entry into the State and deliver it to the officer-in-charge of the last check post or barrier before his exit from the State, failing which it shall be presumed that the goods carried thereby have been sold within the State by the owner or person-in-charge of the vehicle