MAGADH AGENCIES Vs. STATE OF BIHAR

JUDGEMENT

(1.) BOTH the writ applications in between the same petitioner and respondents which raise common question of law and facts have been heard together and are being disposed of by this common judgment.

(2.) THE petitioner M/s. Magadh Agencies is a proprietorship firm having its place of business at Bajaj Kutir at Rajendra Nagar, Patna and its proprietor is Anand Bajaj. The firm is a consignee agent of Reliance Petro Chemicals Limited, Bombay (hereinafter the 'Company') a company manufacturing PVC Reon products used as a raw material for manufacture of PVC pipes and various other PVC products. The Company from time to time transfers its stock from its place of manufacture situated at Hazira in the State of Maharashtra and the petitioner firm on the receipt of the consignment effects its sale in Bihar on behalf of the company on payment of tax at the rate provided under the Bihar Finance Act. Two such consignments on two trucks bearing registration Nos. HNQ 8531 and HB -05/A -6645 each carrying 360 bags of PVC Reon 6701 which were being transported from Hazira to Patna were intercepted on 6.6.92 by the Commercial Taxes Officer, Saran Anchal. Chapra (respondent no. 3) and the consignment along with the trucks were seized vide seizure list (Annexure - 2) for violation of the provisions of Section 31 (2)(b) of the Bihar Finance Act. A notice (Annexure -3) was issued to the driver to show cause why penalty be not imposed for the aforesaid violation. Respondent No.3, however, issued the demand notice (Annexure -4) imposing panalty of tax amounting to Rs. 85,332.35 paise in each case. The petitioner seeks quashing of Annexures 2, 3 and 4 in both the writ applications, one (Cr.W.J.C. No. 317/92) in respect of truck No. HNQ 8531 and the other (Cr.W.J.C. No. 318/92) in respect of truck No. HP -05/A -6645.

(3.) SRI S.D. Sanjay learned counsel appearing for the petitioner very fairly stated at the very outset that he was not pressing the application on the ground that the provisions of Section 31 (2a) of the Act were ultra vires the Constitution of India in view of the decision of the Apex Court upholding its constitutional validity. He, however, challenged the impugned orders of seizure of the vehicles and consignment as also the imposition of penalty on the ground that the consignment sent by the company from its place of manufacture at Hazira (Maharashtra) to the petitioner firm - its consignee agent, was not in the nature of sale but is merely a stock transfer on which there is no liability of tax. It was pointed out that there was no liability for payment of tax as such and a liability would arise only on the sale of the aforesaid product. The petitioner is a registered dealer under the provisions of the Act as well as the Central Sales Tax Act and obtains declaration from XXVIII -B and after filling its columns 1 to 5 sends a bunch of 25 declarations to the company and subsequently the company while despatching the consignment along with transfer Chalan, excise gate pass and other documents the petitioners have filed a copy of their letter dated 5.5.92 as Annexure -1 which they had sent to the company along with a bunch of 25 declarations in form no. XXVIII -B beginning from serial no. 343476 to 343500. It appears that the trucks in question on being intercepted were taken to the office of the Assistant Commissioner of Commercial Taxes, Saran Anchal, Chapra (respondent no. 2) where a detailed inspection report was prepared and show cause was handed over to the driver of each of the two trucks vide Annexure -2. Both the seizure list Annexure -2 and the inspection report Annexure -3 referred to a number of documents which were produced by the truck driver. They included form of road permit in form XXVIII -B bearing no. 343478 and No. 343484 in respect of the two trucks. As mentioned in the inspection report '(Annexure -3) column nos. 6, 7, 8. 9 and 10 were left completely blank in the form. Learned counsel for the petitioner argued that the necessary documents the details of which were to be incorporated in the blank columns of the form mentioned above were produced by the truck drivers and had been seized by respondent no. 3 as is evident from the contents of both Annexure -2 and Annexure -3. On the basis of the contents of the inspection report (Annexure -3) it was argued that the driver had produced all the required papers in respect of the consignment which included the stock transfer Chalan from the company to the petitioner which is consignee agent which itself shows that it was not a sale but stock transfer and therefore there was no tax liability on the aforesaid transaction which the petitioner sought to escape. It is mentioned in the application and also reiterated at the bar that both Annexure -2 and 3 left no room for doubt that the documents produced by the driver also included excise goods pass issued by the excise authority at the gate of place of manufacture at Hazira which were sufficient to prove that the aforesaid consignment was entered in the books of the company on which the company had to produce form 'F' to be exempted from the liability of the Central Sales Tax. The form 'F' was to be issued at the instance of the petitioner after obtaining it from the respondent Sales Tax department where the petitioner is registered as a dealer and therefore there was absolutely no chance that in the absence of filling up of all the columns in the proforma there was any attempt on the part of either the petitioner or the company to escape any sales tax liability. In the circumstances it was argued that the penalty imposed is wholly unwarranted in law, illegal and without jurisdiction.