DUNLOP INDIA LIMITED Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THE petitioner-company is registered under the Companies Act with its registered office at Calcutta. It sent some tyres and tubes from Shah Ganj in West Bengal to their sub-depot at Jullundur, through Messrs. Central Goods Transport Corporation, Calcutta, under challan Nos. 53/341-47, dated 29th June, 1970. At the Shamboo Barrier in Patiala District, the vehicle carrying these goods' was checked by the Taxation Inspector on duty on 6th July, 1970, at 1-00 A. M. The driver produced form ST XXIV indicating the value of the goods at Rs. 50,000. The original invoices and other documents which had been handed over by the petitioner-company to the transport corporation showed that the value of the goods was about Rs. 1,15,518. 25. The Taxation Inspector, therefore, concluded that the driver of the truck had filed a false declaration supplied to him by the petitioner-company with a view to evade sales tax on the tyres and tubes which were being carried by him in the truck. The Taxation Inspector recorded the statement of the truck driver wherein he admitted that the declaration produced by him was not in accordance with the invoices and bills given by the petitioner-company to the transport corporation, which he was carrying. The driver wanted time to produce the parties before any order regarding seizure of the goods was passed by the Taxation Inspector, who agreed to grant him time.

(2.) SHRI S. R. Bhutani, a representative of the petitioner-company and Shri Bhagwan Dass, a representative of the Central Goods Transport Corporation, appeared before the officer-in-charge of Shamboo Barrier and explained that a clerk of the Transport Corporation had inadvertently filled in the figure "rs. 50,000" instead of the real amount and that there was no intention to evade any tax in view of the fact that the original invoices and bills, which were being carried by the driver, showed the correct valuation of the goods. The officer-in-charge of the check post did not feel convinced and seized the goods on the ground that the declarations furnished in form ST XXIV were found to be incorrect. He called upon the general manager of the petitioner-company to attend his office within seven days personally or through an authorised agent to settle the dispute. On 22nd July, 1970, the petitioner-company made a representation to the Joint Excise and Taxation Commissioner, Patiala. But before that representation could be decided, the office manager of the petitioner-company appeared before the officer-in-charge of the check post on 23rd July, 1970, and his statement was recorded. He was shown all the papers from which he worked out the total value of the goods at Rs. 1,23,666. 42, out of which goods of the value of Rs. 17,114. 07 were taxable at 6 per cent, and the remaining at 10 per cent. It was thus determined that the difference between the declaration made in form ST XXIV and the correct value of the goods was Rs. 73,666. 42. The manager of the petitioner-company was allowed the option of getting the goods released on payment of Rs. 7,000 and to furnish a revised declaration showing the value of the goods at Rs. 1,23,666. 42. The manager of the petitioner-company paid the amount under protest and got the goods released. Thereafter, a representation was made by the petitioner-company to the Joint Excise and Taxation Commissioner, Punjab, on 8th March, 1971, to revise the order of the Check Post Officer dated 23rd July, 1970, and to order the refund of the amount received by him for releasing the goods seized. On 21st April, 1971, the petitioner-company was informed "legal remedies may please be sought in the case cited as subject" by' the Excise and Taxation Commissioner. The petitioner then filed the present petition challenging the order seizing the goods and releasing them only on receipt of Rs. 7,000.

(3.) WRITTEN statement has been filed by respondent No. 3, justifying the action taken by the department under Section 14-B of the Punjab General Sales Tax Act, 1948, which reads as under: 14-B. Establishment of check posts or barriers and inspection of goods in transit.- (1) If, with a view to preventing or checking evasion of tax under this Act in any place or places in the State, the State Government considers it necessary so to do, it may by notification direct the establishment of a check post or the erection of a barrier, or both, at such place or places as may be notified. (2) The owner or person-in-charge of a goods vehicle or vessel shall carry with him a goods vehicle record, a trip slip or a log-book, as the case may be, and a bill of sale or a delivery note containing such particulars as may be prescribed in respect of the goods carried in the goods vehicle, or vessel, as the case may be, and produce the same before an officer of the department not below the rank of an Assistant Excise and Taxation Officer checking the vehicle or vessel at any other place. (3) The owner or. person-in-charge of a goods vehicle or vessel entering the State limits or, leaving the State limits shall also give in triplicate a declaration containing such particulars, as may by prescribed, of the goods carried in such vehicle, or vessel, as the case may be, before the officer-in-charge of the check post or barrier and shall produce the copy of the said declaration duly verified and returned to him by the officer-in-charge of the check post or barrier before any other officer as mentioned in Sub-section (2) : Provided where a goods vehicle or vessel bound for any place outside the State passes through the State, the owner or person-in-charge of such vehicle or vessel shall also obtain a transit slip (rahdari) in the prescribed form from the officer-in-charge of the check post or barrier of his entry into the State and deliver it to the officer-in-charge of the check post or barrier at the point of his exist from the State failing which it shall be presumed that the goods have been sold within the State. (4) At every check post or barrier or at any other place when so required by any other officer referred to in Sub-section (2) in this behalf, the driver or any other person-in-charge of the goods vehicle or vessel shall stop the vehicle or vessel, as the case may be, and keep it stationary as long as may reasonably be necessary, and allow the officer-in-charge of the check post or barrier or the officer as aforesaid to examine the contents in the vehicle or vessel, by breaking open the package or packages, if necessary, and inspect all records relating to the goods carried which are in the possession of such driver or other person-in-charge, who shall also furnish such other information as may be required. (5) At every station of transport of goods, bus stand or any other station or place of loading or unloading of goods, other than a rail head or a post office, when so required by the Commissioner or person appointed to assist the Commissioner under Sub-section (1) of Section 3 the driver or owner of any goods carrier or the employee of a transport company shall produce for examination transport receipts and all other documents and account books concerning the goods carried, transported, loaded, unloaded or consigned or received for transport. (6) Any officer not below the rank of an Assistant Excise and Taxation Officer while acting under this section shall have the power to seize any goods not covered by the documents mentioned in sub-sec-tion (2) and Sub-section (3), (7) The dealer or any person, including a carrier of goods, acting on behalf of the dealer shall not take delivery of, or transport from, any vessel, station, airport or any other place, whether of similar nature or otherwise, notified in this behalf by the State Government any consignment of goods, the sale or purchase of which is taxable under this Act except in accordance with such conditions as may be prescribed with a view to ensuring that there is no evasion of the tax imposed by or under this Act: Provided that no place which is a rail head or a post office shall be so notified by the State Government. (8) Where the declaration made under Sub-section (3) is false in respect of any particulars mentioned therein, the officer-in-charge of the check post or barrier or any other officer not below the rank of an Assistant Excise and Taxation Officer shall have the power to seize the goods in respect of which the declaration is false: Provided that an officer acting under Sub-section (6) or Sub-section (8) may, before or after such seizure, give to the person affected an option to pay, in lieu of seizure and in addition to the tax recoverable, a sum of money not exceeding one thousand rupees or double the amount of tax recoverable, whichever is greater. Explanation.-In this section, the expression 'goods vehicle' has the same meaning as is assigned to it in Clause (8) of Section 2 of the Motor Vehicles Act, 1939, but does not include road transport plying in collaboration with rail transport.