2003 Supreme(SC) 230

2003(2) Supreme 625
SUPREME COURT OF INDIA
(From West Bengal Taxation Tribunal at Kolkata)
Syed Shah Mohammed Quadri & Ashok Bhan, JJ.
State of West Bengal & Anr. -Appellants
versus
Road Transport Association, Silguri and Anr. -Respondents
Civil Appeal No. 8180 of 1995
Decided on 25-2-2003
Counsel for the Parties :
For the Appellants : B. Sen, Rakesh Dwivedi, Sr. Advocates, Dayan Krishnan, S. Mishra, Advocates for M/s. Sinha and Das, Advocates.
For the Respondents : Yashank Adhyaru, Sr. Advocate, Satyajit Saha and Mrs. V.D. Khanna, Advocates.

IMPORTANT POINT
West Bengal Taxation Tribunal s reasoning or the conclusion that Section 4-C(6) and (7) of Bengal Finance (Sales Tax) Act, 1941 as amended in 1993 Rule 47-L(4) of the West Bengal Sales Tax Rules, 1941 are unconstitutional is unsustainable.

Headnote:(i) Bengal Finance (Sales Tax) Act, 1941, as amended in 1993-Expl. I to Section 2 (1a-1)-Tribunal suspending the operation of Explanation on the ground that there is no machinery provision specifying the manner of disclosure-Whether correct? (No).

       Held : A perusal of the definition clause and Explanation-1 shows that there is no ambiguity in them. The requirements of the explanation are clear enough. Not providing any proforma for declaring particulars under the explanation would neither make it vague nor unworkable for want of any machinery provision. It cannot be disputed that a prescribed proforma would have been appropriate but absence of a proforma for making the required declaration would not warrant suspension of the said explanation. We find no substance in the reasoning of the Tribunal and, therefore, set aside the finding of the Tribunal in regard to Explanation-1. (Para 7)

       (ii) Bengal Finance (Sales Tax) Act, 1941 as amended in 1993-Charging Section 4C(6)(7)-Rule 48-L of West Bengal Sales Tax Rules, 1941-Declared as invalid and unconstitutional by Tribunal-Appeal to Supreme Court-Whether Tribunal was right in its assumption that the power to seize and sell the goods is exercisable without purchase of goods by, and a proper assessment of purchase tax in respect of, a transfer of goods? (No)-Appeal allowed.

       Held : It is evident from sub-section (7) that it authorises, the Commissioner/the authorised person to sell in an open auction the goods which have been seized under sub-section (6) and not claimed by the bonafide owner thereof, within fifteen days from the date of seizure, and adjust the amount of tax on purchases of goods that may be determined under sub-section (4) with the sale proceeds of such goods. The balance amount, if any, is required to be deposited with a Government Treasury for refund to the bonafide owner of goods upon claim preferred in the prescribed manner within one year. The procedure to levy the impost under Section 4-C of the Act is mentioned in sub-rule (1) of Rule 48L of the Rules. It provides that if upon information or otherwise, the Commercial Tax Officer or Inspector, authorised by the Commissioner in that behalf, is satisfied that a casual trader is liable to pay tax under sub-section (1) of Section 4C of the Act on his purchase made in West Bengal of goods, he is required to determine by a precise order in writing in Form VIB the amount of tax payable by such trader after taking into consideration the purchase bill memo, challan, or consignment note which may be available relating to such goods. Sub-rule (4) of Rule 48L of the Rules, quoted above, says that if a casual trader fails to pay the amount of tax as determined under sub-rule (1) and demanded under sub-rule (3), the goods liable to purchase tax shall be seized for recovery of tax in the manner referred in sub-sections (6) and (7) of Section 4C. It is thus abundantly clear that under sub-rule (4), for the purpose of recovery of tax due, the power of seizure and sale of the goods contained in sub-sections (6) and (7) of the Act is made available to the concerned authority. From the above discussion, it is clear that the course of action incorporated in these provisions is meant to prevent evasion of tax due under the Act. We are, therefore, unable to accept that such a course of action could be taken by the authorities even without any purchases of goods by a casual trader. The sine qua non for levy of tax under the Act is the purchase of the goods within the State of West Bengal. In the absence of any taxable event, the goods will not be liable to tax and, consequently, no transporter can be made liable to pay tax at the entry point for his failure to disclose the information which is required under Explanation-1 of Section 2(1a-1) of the Act. We find no valid reason to hold that the said provisions are illegal much less unconstitutional, therefore, we are unable to sustain either the reasoning or the conclusion of the Tribunal that sub-sections (6) and (7) of Section 4-C of the Act and sub-Rule (4) of Rule 48-L of the Rules are unconstitutional. In the result, we set aside the order of the Tribunal under challenge. However, we make it clear that the impugned judgment insofar as it holds Rule 48M of the Rules as unconstitutional is not challenged before us. The appeal is, accordingly, allowed. There shall be no order as to costs. (Paras 11 to 15)