LALJI MULJI TRANSPORT COMPANY Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) BY way of these petitions, petitioners have challenged the constitutional validity of sub-sections (4), (8), (10) and (11) of Section 78 of the Rajasthan Sales Tax Act 1994, hereinafter referred-to as "the Act" and, as such, they are disposed-of by this common order. Prayer has also been made to quash detention notice/order under Section 78 (4) and (8) A further prayer has been made to quash the penalty order, if any, passed during the pendency of the writ. M/s. LALJI MULJI TRANSPORT COMPANY (324/2002) :

(2.) A brief resume of facts would help in focusing attention on the dispute involved in these writ petitions. The petitioner Company is a transport Company having its office at Mumbai. It booked goods viz; Supari from M/s. Malabar Trading Company, Maloth for delivery to another registered dealer M/s. Sai Traders of Delhi. It carried invoice No. 431 dated 4. 1. 2002 of M/s. Malabar Trading Company, Maloth showing trade of Supari to M/s. Sai Traders. It also carried Bilty No. 32348 dt. 4. 1. 2002 of petitioner M/s. Lalji Mulji Transport Company showing despatch of Supari from M/s. Malabar Trading Company, Maloth to M/s. Sai Traders of Delhi through truck No. HR-55/5769. The said truck proceeded from Maloth, Mangalore (Karnataka) towards Delhi. The Assessing Authority on receiving information that the truck containing Supari was being brought within the State with fake bills and bilties and, therefore, the second respondent viz; the Assistant Commercial Taxes Officer, Ward-II, Nimbahera intercepted and checked the petitioner's truck on 12. 1. 2002 at the checkpost of Nimbahera. The driver of the vehicle produced documents viz; bill dated 4. 1. 2002 for Rs. 5,01,600/- and bilty No. 32348 dated 4. 1. 2002 bearing seals of transit checkpost. The second respondent suspected the genuineness of the Central Sales Tax/l. C. Number given in the bill. The driver of the vehicle was confronted with the situation. As per the say of the Assessing Authority, the driver Incharge produced a fax copy of the Registration Certificate of M/s. Sai Traders, Delhi. The driver and the Assessing Authority had a talk with the dealer viz; M/s. Sai Traders at Delhi. The dealer pleaded his absolute ignorance about such goods being brought to his place. It is also averred by the Assessing Authority that the driver made the statement to the effect that he was carrying goods in the transit from Ichhlakarni to Delhi. He further stated that he could even unload the goods anywhere in the State of Rajasthan as per the directions of the dealer or the transport Company. The say of the petitioner is that provisions of Section 78 do not apply to its case as the goods were merely intended to pass through the State of Rajasthan for which transit pass was supposed to be issued in terms of Section 80 of the Act. Inspite of the fact that the relevant documents were immediately produced which clearly shows that the consignor as well as the consignee were registered dealers, the second respondent has unlawfully seized the goods and refused to release the truck causing undue harassment and pecuniary loss. It is submitted that the mistake in giving the R. C. Number of purchasing dealer was a bonafide clerical error on the part of a clerk of office of the consignor. Since C. S. T. /l. C. Number of the consignee on the bill produced was fake and M/s. Sai Traders disowned it being consignee of the goods, the Assessing Authority formed an opinion that the goods were being brought on the strength of the fake documents. Accordingly, he issued a notice under Section 78 (5) of the Act for violation of the provisions of Section 78 (2) of the Act. Another notice under Section 78 (8) of the Act was issued to the petitioner transport Company. The petitioner submitted a representation i. e. reply to the notice under Section 78 (8) of the Act. At this stage, petitioner approached to this court seeking direction for the release of the truck and the goods and also to quash the notice under Section 78 (4) and (8) of the Act. This Court by order dated 23. 1. 1993 issued a short notice to the department. Subsequently, it has been brought to our notice that the assessment proceedings had concluded on 20. 1. 2002 vide Annex. R/1. M/s GILL SANDHU TRANSPORT CO. (698-02) : SHRI INDRAPRIT SINGH (690-02) : The petitioner is a transporter having the business in the name of M/s. Gill Sandhu Transport Company and office at Delhi. M/s. N. K. Traders, Bangalore booked goods viz; plastic scrap worth Rs. 56,160/- for delivery at United Plastic Industries, Delhi. The petitioner's truck bearing No. HR 38/d-5084 was intercepted and checked by the second respondent i. e. Assistant Commercial Taxes Officer, Pratapgarh at the checkpost Jalia Pipalia, Nimbahera. The driver of the truck namely Raghuvir Singh u/sec. 72 (2) produced one bill No. 376 dt. 1. 12. 2001 issued by M/s. N. K. Traders, Bangalore in favour of United Plastic Industries, Delhi pertaining to loose plastic scrap mentioning cost price as Rs. 56,160/ -. He also produced a bilty No. 880 dt. 2. 12. 2001 issued by M/s. Gill Sandhu Cargo Movers Pvt. Ltd. The name of the consignee was shown in the bilty as M/s. United Plastic Industries, Delhi. He also produced the challan No. 696 dt. 2. 12. 2001 issued by M/s. Gill Sandhu Cargo Movers Private Limited bearing truck No. KA/32- 1952 and also HR/38-5084. However, on inspection, it was found that the goods in transit was Supari and not the plastic scrap as disclosed in the bills, bilties and the goods challan produced. According to the petitioner, goods viz; Supari were booked in the State of Kerala by a registered dealer M/s. K. T. Mohammed & Sons to another registered dealer M/s. S. K. Enterprises of Delhi. The truck No. KLS 8898 carrying Supari proceeded from Kerala, at Hyderabad where the Company belonging to the petitioner has an office, transported the goods viz; Supari to the truck No. HR/38- 5084 for onward transshipment to Delhi. The driver of the truck inadvertently brought the envelope containing the documents relating to the other truck for different goods viz; plastic scrap. However, at the time of checking by the second respondent on 7. 12. 2001, he truthfully mentioned that the goods were Supari and he produced the documents. When the second respondent pointed out the discrepancy, the driver reported the matter to the Delhi Office where upon enquiry from Hyderabad office, the mistake of driver was realized and immediately the relevant documents viz; bill of the seller, bilty etc. were obtained on fax and submitted to the second respondent. According to the petitioner, it was a bonafide mistake of the driver. On physical verification of the goods, it was found that there were 130 bags of Supari with the weighment of 9100 kgs. The Assessing Authority being satisfied of the foul play issued a notice under Section 78 (5) of the Act. A reply to the said notice was submitted by the petitioner. The Assessing Authority arrived at a finding that the documents did not relate to the goods in transit and the photostat copies of the documents produced later-on was only an after thought and concoction. The Assessing Authority imposed a penalty to the tune of Rs. 1,91,000/- on the value of the goods determined at Rs. 6,37,000/ -. Since the dealer had not disclosed true information with regard to the consignor and the consignee, the Assessing Authority in exercise of powers u/sec. 78 (11) also assessed a liability of tax and surcharge under the Rajasthan Sales Tax quantified at Rs. 25,480/- and Rs. 3822/- respectively. The Assessing Authority also issued a notice under Section 78 (8) of the Act. After giving an opportunity of hearing and considering the reply, the Assessing Authority has passed the order imposing the penalty i. e. 30% of the value of the goods by order dated 20. 12. 2001. Petitioner has preferred an appeal against the said order before the Deputy Commissioner (Appeals ). The Assessing Authority has also found that the value of the goods shown in the bill was lesser than the fair market price of such goods. On enquiry, it has also revealed that the value of the goods viz; Supari in the State of Rajasthan was Rs. 70/- to Rs. 85/- per kg. , whereas in the State of Karnataka, it is Rs. 76/- to Rs. 90/- per kg.

(3.) IN State of Rajasthan vs. D. P. Metals (supra), the Apex Court while examining the constitutional validity of Section 78 (5) of the Rajasthan Sales Tax Act found that the challenge to the vires of Section 22-A and 22-B of the Rajasthan Sales Tax Act, which was the precursor to the present Section 78 of the Act of 1994 was repelled in various cases being INdian Roadways Corporation vs. State of Rajasthan and Sarna Transport Corporation vs. State of Rajasthan. The Court also observed that Sections 22-A and 22-B of the Rajasthan Sales Tax Act, which were specifically challenged in INdian Roadways and Sarna Transport Cases (supra) were upheld and the said provisions are pari materia with the new Section 78 of the Act of 1994. INfact, the reading of paras 21, 22 and 23 of the judgment of the Apex Court in State of Rajasthan vs. D. P. Metal's case (supra) clearly shows that it is not open for the petitioner to assail the validity of any of the sub sub-sections of Section 78 of the Act of 1994. It is settled law that once the validity of a provision has been upheld than the same is not open to assail afresh on any other ground. It will be profitable to extract paras 21, 22 and 23 of the judgment of the Apex Court as follows : " 21. The provisions of Sections 22-A and 22-B of the Rajasthan Sales Tax Act, 1954, were the precursor to the present section 78 of the 1994 Act. The validity of Section 22-A and other connected provisions were impugned in Writ Petition Nos. 1555-56 of 1983 in INdian Roadways Corporation vs. State of Rajasthan. By a short order dated April 23, 1986 the validity of these provisions were upheld in the following words : " We have explained in M/s. Sodhi Transport Co. vs. State of U. P. (1986 (62) STC 381 (SC); 1996 (2) SCC 486) decided on March 20, 1996, the object of establishing check-posts and introducing provisions in the sales tax law of a State which would facilitate inspection of goods which are carried from one State to another through a third State. IN the above-mentioned decision, we have upheld the provisions of section 28-B of the Uttar Pradesh Sales Tax Act, 1948 and the rules made thereunder. For the same reasons, we uphold the provisions of Sections 22-A and 22-B of the Rajasthan Sales Tax Act, 1954 and the rules 61, 62, 62-A, 62-B and 63 and forms 18-A and 18-B of the Rajasthan Sales Tax Rules, 1955. These writ petitions are disposed of accordingly. There will be no order as to costs. " 22. Yet another challenge to the vires of sections 22-A and 22-B of the Rajasthan Sales Tax Act was made but was repelled in Civil Appeal No. 152 of 1990 in Sarna Transport Corporation vs. State of Rajasthan by an order dated July 23, 1996 which reads as follows : " The writ petition that the appellants filed in the Rajasthan High Court sought to challenge the vires of sections 22-A and 22-B of the Rajasthan Sales Tax Act, 1954. The writ petition was rejected. The challenge to these sections has been repelled by this Court by its order dated April 23, 1986 in Writ Petition Nos. 1555-56 of 1983 - INdian Roadways Corporation vs. State of Rajasthan. Mr. Puri, learned counsel for the appellants, submitted that, nonetheless, an order should be made in terms of an interim order made by this Court in some matters. There is no prayer for such relief in the writ petition that was filed before the High Court. Secondly, that was an order pending the disposal of the Civil Appeals that were then before this Court. Such an order cannot, therefore, be passed in this matter. The appeal is dismissed. No order as to costs. " 23. From the aforesaid decisions, it would be clear that the consistent view of this Court since the case of Sodhi Transport Company's case (1986) 62 STC 381 (SC); (1986 (2) SCC 486) has been that provisions similar to section 78 (5) have been held to be within the legislative competence of the State. INfact, validity of sections 22-A and 22-B of the Rajasthan Sales Tax Act which was specifically challenged in INdian Roadways case (S. P. Nos. 1555-56 of 1983 decided on April 23, 1986) and Sarna Transport case (C. A. No. 152 of 1990) decided on July 23, 1996) were upheld by this Court and the said provisions are in pari materia with the new section 78 of the 1994 Act. "