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2011 Supreme(Gau) 280
IN THE HIGH COURT OF GAUHATI (AGARTALA BENCH)
Iqbal Ahmed Ansari & C.R. Sarma, JJ.
T.R. Freight Movers rep. by its Proprietor Shri Ashoke Shah – Appellants
Vs.
State of Tripura, rep. by the Secretary to the Government of Tripura – Respondent
Writ Petition (C) Nos. 42, 88, 89, 285, 289, 290, 347 & 348 of 2005
Decided On: 30.03.2011
For Appellant/Petitioner/Plaintiff:Somik Deb, Advocate
For Respondents/Defendant:A. Ghosh, P. Roy Barman and B. Saha, Advocates
Headnote:
Constitution of India, 1950 – Articles 286, 14, 19(1)(g) - Tripura Value Added Tax Act, 2004 - Sections 77 and Rule 64A - Tripura Sales Tax Act, 1976 - Sections 13A and 21 - Government of India Act, 1935 - Madhya Pradesh Commercial Tax Act, 1994 - Madras General Sales Tax Act, 1 of 1939 - Section 41(2) - Rajasthan Sales Tax Act - Section 78 - Haryana General Sales Tax Act, 1973 - Section 37 - Assessment and reassessment - Recovery of tax - Notices of demand - Seeking to get set aside and quashed the impugned notice of demand - seeking release of the consignments - Seeking extension of time to comply - Writ petitions raises following important questions of constitutionality centering on Entry 54 of List II of Seventh Schedule to the Constitution of India and also the extent and purport of the ancillary powers vested in the State legislature - Whether penalty can be imposed on a transporter, who facilitates and/or abets evasion of tax by a dealer and because of whose such default, evasion of tax takes place - Whether tax, which is, otherwise, chargeable on, and recoverable from, a dealer, can be charged on, and/or recovered from, a transporter - Whether the provisions contained in Section 13A of Tripura Sales Tax Act, 1976, and Section 77 the Tripura Value Added Tax Act, 2004, imposing penalty to extent of 150% of the tax involved is constitutionally valid – Held, Tax can be imposed on transporters by treating a transporter as a dealer by creating legal fiction so as to treat, in the prescribed circumstances, a transporter, as a dealer, and/or by raising a legal presumption taxable goods, handled by a transporter, have been delivered to a dealer without any valid permit or by raising a legal presumption transporter has concealed the actual particulars of the goods transported by him and the goods have been sold - provisions of Section 13A of the TST Act, 1976, and Section 77 of the TVAT Act, 2004, is, in so far as the same relate to levy of penalty to the extent - provisions of the TST Act, 1976, and Section 77 of Act of the TVAT Act, 2004, do not have the effect of rendering the decision of the Supreme Court in Tripura Goods - Petitioners in the light of position of law as indicated above and if the Petitioners and/or any of them are found to have violated the legal obligations cast by statutes concerned, necessary penalty, in accordance with law, may be imposed, in accordance with law, on that transporter - Writ petitions shall stand disposed of.
Iqbal Ahmed Ansari, J.
1. The present set of writ petitions raises following important questions of constitutionality centering on Entry 54 of List II of the Seventh Schedule to the Constitution of India and also the extent and purport of the ancillary powers vested in the State legislature, which has enacted the Tripura Sales Tax Act, 1976, and subsequently, the Tripura Value Added Tax Act, 2004.
1. Whether penalty can be imposed on a 'transporter', who facilitates and/or abets evasion of tax by a 'dealer' and because of whose such default, evasion of tax takes place?
2. Whether tax, which is, otherwise, chargeable on, and recoverable from, a 'dealer', can be charged on, and/or recovered from, a transporter?
3. Whether realization of tax from a 'transporter' under Section 13A of the Tripura Sales Tax Act, 1976, and Section 77 of the Tripura Value Added Tax Act, 2004, is constitutionally valid?
4. Whether the provisions contained in Section 13A of the Tripura Sales Tax Act, 1976, and Section 77 of the Tripura Value Added Tax Act, 2004, imposing penalty to the extent of 150% of the 'tax involved' is constitutionally valid?
5. On a conspectus of all the statutory provisions, contained in the Tripura Sales Tax Act, 1976, prior to its 8th amendment, when the Supreme Court, in Tripura Goods Transport Association v. Commissioner of Taxes, reported in (1999) 2 SCC 253 : (1999)112 STC 609, had already held that there is no liability on a 'transporter' to pay tax and/or penalty, whether the subsequent insertion of Section 13A in the Tripura Sales Tax Act, 1976, vide the 8th amendment, can be sustained ?
2. The above are some of the important questions of law, which require adjudication in the present set of writ applications, wherein the legality and validity of Section 13A of the Tripura Sales Tax Act, 1976, and Section 77 of the Tripura Value Added Tax Act, 2004, are principally under challenge.
3. Before we attempt to answer the questions posed above, it is imperative that we take into account the circumstances, where under the writ petitions have been filed, under Article 226 of the Constitution of India, raising the questions, which we have indicated above. The material facts, therefore, giving rise to these writ petitions, may, first, be noted.
Background Facts
WP(C) 42/2005
4. The Petitioner, a transporter registered in terms of the provisions of Rule 64A of the Tripura Sales Tax Rules, 1976 (in short TST Rules, 1976), transported 18 MT [1545 packets] of HL Medicine, by two consignments in two trucks, the consignors thereof being M/s Nicholas Piramol India Limited. A Sub-Inspector of Police, East Agartala Police Station, detained the lorries loaded with the consignments and arrested the drivers of the two trucks. Thereafter, the drivers were produced before the Chief Judicial Magistrate, West Tripura, Agartala.
5. When the Petitioner submitted an application seeking release of the consignments, Deputy Drug Controller, Government of Tripura, opposed the said application and contended that the drugs were misbranded. Having heard both sides, the learned Chief Judicial Magistrate passed an order, on 07.10.2004, directing the Investigating Officer to release the vehicle on furnishing bond of Rs. 25 lakhs with a rider that the seized materials be sent back to the manufacturer for necessary rectification by way of proper labeling or, the in the alternative, proper labeling be made, at Agartala, by the manufacturer. The learned Chief Judicial Magistrate also directed that a compliance report, in this regard, be submitted to him within a period of one month. On application being made by the Petitioner seeking extension of time to comply with the direction issued, as indicated hereinbefore, the learned Chief Judicial Magistrate granted two months' time to comply with the order and also accorded permission to the Petitioner to move the Sales Tax authorities for permits.
6. The Petitioner, then, took up the matter with M/s Nicholas Piramol Indi
