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1981 Supreme(Gau) 41
K.N. Saikia, J.
ELECTRIC & FURNISHING MART
Versus
STATE OF ASSAM AND OTHERS.
Civil Rule No. 217 of 1981
Decided On: Decided On : 20-04-1981
T. C. Khatri, for the petitioner.
P. K. Barua, Senior Government Advocate, for the respondents.
A requirement to obtain a permit by filing a declaration in advance of importing goods into a State by road transport is ultra vires the powers of the State Government and is an unreasonable restriction on the freedom of trade and commerce.
Headnote:
ASSAM FINANCE (SALES TAX) ACT, 1956 - SECTION 33, 33A, 39 - ASSAM FINANCE (SALES TAX) RULES, 1956 - RULE 55, 56, 71, 72, 73, 74 - CONSTITUTION OF INDIA - ARTICLE 19(1)(G), 301, 302, 304(B) - CHECK POST - PERMIT - REQUIREMENT TO OBTAIN PERMIT BY FILING DECLARATION IN ADVANCE OF GOODS PASSING THROUGH CHECK POSTS - VALIDITY - REASONABLENESS - RESTRICTION ON FREEDOM OF TRADE AND COMMERCE - WHETHER ULTRA VIRES.
Fact of the Case:
The petitioner, a registered dealer under the Assam Finance (Sales Tax) Act, 1956, challenged the direction issued by the Superintendent of Taxes, Tezpur, requiring dealers to obtain a permit by filing a declaration in advance of importing finance tax goods into Assam by road transport. The direction was purported to be under rules 55 and 56 of the Assam Finance (Sales Tax) Rules, 1956.
Finding of the Court:
The Court held that the direction and the specimen form in annexures B and C were ultra vires the powers of the Superintendent of Taxes and the Commissioner and quashed them. The Court found that the requirement to obtain a permit by filing a declaration in advance was an additional requirement under rules 55 and 56 and was not a substitute for the existing forms XIV and XV prescribed under the Rules. The Court also found that the direction and the form were not in conformity with the instructions issued by the Commissioner.
Issues: 1. Whether the requirement to obtain a permit by filing a declaration in advance of importing finance tax goods into Assam by road transport was within the powers envisaged under the Assam Finance (Sales Tax) Act, 1956 and the Assam Finance (Sales Tax) Rules, 1956? 2. Whether the requirement was consistent with the provisions of articles 19(1)(g), 301, 302 and 304(b) of the Constitution of India?
Ratio Decidendi: 1. The Court held that the requirement to obtain a permit by filing a declaration in advance was an additional requirement under rules 55 and 56 and was not a substitute for the existing forms XIV and XV prescribed under the Rules. The Court also found that the direction and the form were not in conformity with the instructions issued by the Commissioner. 2. The Court held that the requirement was not consistent with the provisions of articles 19(1)(g), 301, 302 and 304(b) of the Constitution of India as it imposed an unreasonable restriction on the freedom of trade and commerce.
Final Decision: The Court allowed the petition and quashed the direction and the specimen form in annexures B and C.
SAIKIA, J. - M/s. Electric & Furnishing Mart, a partnership firm of Tezpur town prays for an appropriate writ quashing the direction given by the Superintendent of Taxes, Tezpur, contained in the impugned letter containing direction as to new procedure (annexure B), accompanied by a specimen form of declaration (annexure C).
2. The petitioner-firm is a registered dealer under the Assam Finance (Sales Tax) Act, 1956 (hereinafter called the Act), being No. TEZ/F/756; and it deals in various goods taxable under the Act, importing some of those from places outside Assam. Respondent No. 3, the Superintendent of Taxes, Tezpur, on 18th February, 1981, served on the petitioner the letter (annexure B) accompanied by a specimen form (annexure C) containing the direction to follow a new procedure by obtaining permit for import of finance tax goods into Assam by road transport purported to be under rules 55 and 56 of the Assam Finance (Sales Tax) Rules, 1956 (hereinafter called the Rules). The letter and the accompanying specimen form are as follows :
"(Annexure B)
To
M/s. Electric & Furnishing Mart, Tezpur.
This is for general information that a new procedure is going to be introduced with effect from 1st March, 1981, in respect of import of finance tax goods into Assam by road transport. The procedure to be followed for obtaining the permit will be that any dealer intending to import finance tax goods into Assam by road transport shall obtain a permit from the Superintendent of Taxes of his area in the prescribed form and shall transmit it to the carrier for production before the check post officer along with the way bills.
Specimen copy of the form may be seen in the office of the undersigned during office hours.
Sd./-
Superintendent of Taxes Tezpur. --------
(Annexure C)
SPECIMEN COPY OF FORM
The Assam Finance (Sales Tax) Act, 1956 (See Rules 55 and 56).
To
The Superintendent of Taxes
In accordance with the provisions of rules 55 and 56 of the Assam Finance (Sales Tax) Rules, 1956, I/we hereby declare that the following consignment of ............ is to be imported into Assam and apply for a permit to transport the same by road through the check post mentioned below :-
(1) Name and address of the seller from whom purchased ...........
(2) Name and address of the consignee ...........
(3) Place of despatch ...........
(4) Name of check post through which the goods will be transported .....
(5) Destination .................
(6) Description of consignments .................
(7) Quantity .......................
(8) Weight .......................
(9) Value ......................
(10) Consignor's invoice No. and date ..............
(11) Name and address of the owner of the vehicle by which the goods are carried .................
(12) Remarks (if any) .................
I/We hereby declare that I/we am/are registered under the Assam Finance (Sales Tax) Act, 1956, holding Registration Certificate No. ........... and the above statements are true to the best of my/our knowledge and belief.
I/We also undertake to duly account for to you the disposal of the above goods when imported and to pay tax on the sales thereof according to the provisions of the said Act and the Rules made thereunder.
Name of the dealer in full ...................
Address ...................
Signature and status of the applicant ................... Permit.
No. ..................
I hereby permit to take delivery or to transport the consignment detailed above.
Seal
Date .............. Signature of Superintendent of Taxes,
Circle .............."
3. On receipt of the aforesaid letter and the specimen form, the petitioner-firm contacted respondent No. 3 who apprised it that the letter and the specimen form flow from the instructions contained in the circular dated 1st January, 1981, and 8th September, 1971, issued by respondent No. 2, t
