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1990 Supreme(Gau) 235
GAUHATI HIGH COURT
B.P.Saraf, H.K.Sema, JJ.
Kinkar Deb -Appellant
Versus
State of Tripura -Respondent
Civil Rule No. 146 of 1989
Decided On : 05-11-1990
S.Saha, M.Nath, B.Das
The court established that the authorities misinterpreted the provisions of section 32 of the Tripura Sales Tax Act and wrongly imposed composition money, which was not in accordance with the law. It also clarified that the restriction under section 37(1) of the Act did not apply to personal baggage, and the search of the petitioner's personal baggage by the sales tax authorities at the airport was illegal and without jurisdiction.
Headnote:
Composition of Offences - Sales Tax - Tripura Sales Tax Act 1976, Section 32 - The court discussed the interpretation of section 32 of the Act, the nature and scope of the power of authorities, and the determination of composition money. It held that the authorities misinterpreted the provisions and wrongly imposed composition money, which was not in accordance with the law.
Fact of the Case:
The petitioner, a small businessman, was intercepted at the airport with lottery tickets in his baggage. The tax officials seized the tickets for alleged contravention of the Tripura Sales Tax Act. The Superintendent of Taxes compounded the offence and demanded a sum of Rs. 30,000. The petitioner challenged the legality of the seizure and composition before the Commissioner of Taxes, who dismissed the revision petition. The petitioner then filed a writ petition before the court.
Finding of the Court:
The court held that the initiation of the proceeding against the petitioner was illegal and without jurisdiction. It also found that the imposition of composition money and its forcible realization was illegal. The court set aside and quashed the impugned orders and directed the respondents to refund the sum of Rs. 30,000 to the petitioner. The court allowed the petition and directed the respondents to pay a sum of Rs. 1000 to the petitioner by way of costs.
Issues: The interpretation of section 32 of the Tripura Sales Tax Act, the legality of the seizure and composition of the offence, and the jurisdiction of the authorities to impose composition money.
Ratio Decidendi: The court held that the authorities misinterpreted the provisions of section 32 of the Act and wrongly imposed composition money, which was not in accordance with the law. It also found that the restriction under section 37(1) of the Act did not apply to personal baggage, and the search of the petitioner's personal baggage by the sales tax authorities at the airport was illegal and without jurisdiction.
Final Decision: The court set aside and quashed the impugned orders passed by the Superintendent of Taxes and the Commissioner of Taxes and directed the respondents to refund the sum of Rs. 30,000 to the petitioner. The court allowed the petition and directed the respondents to pay a sum of Rs. 1000 to the petitioner by way of costs.
The facts given rise to this writ petition are very brief but questions of law that arise for consideration are important and interesting.
We state the facts first. The petitioner, Kinkar Deb, is a small businessman who occasionally deals with lottery tickets. On 18-9-1986,he came from Calcutta to Agartala by Indian Airlines Flight. He brought with him lottery tickets numbering 50,000 the face value of which was Rs. 50,000/-. The moment he landed at Agartala and entered the airport lounge, the official of the Sales Tax Department of the Government of Tripura, intercepted him and cheeked his baggage and found the aforesaid lottery tickets in his brief case and bag. The petitioner told the tax officials that he was bound for silchar in the State of Assam but having failed to manage air ticket, he landed at agartala and decided to go to Silchar by roadways. He also stated that he had no intention to sell the lottery tickets in Tripura . The Superrintendent of Taxes, however did not accept his statement and sized the lottery tickets vide seizure list dated 18-9-186 . The seizure was made for the alleged contravention of the provisions of section 37(1) of the Tripura Sales Tax Act, 1976, hereinafter 'the Act'. The very next day on 19-9-86 the Superintendent of Taxes passed an order whereby the alleged offence of import of lottery tickets through Indian Airlines on 18-9-86 under section 37(1) of the Act committed by the petitioner was compounded by him. It was done in lieu of taking action under section 9 of the Act. The sale value of the lottery tickets was computed at Rs. 50,000/-; tax payble @ 20% was determined at Rs.10,000/-; composition money amounting to Rs. 20,000/- was added thereto and the petitioner was directed to deposit the said sum of Rs. 30,000/- immediately. As this order is the subject matter of challenge and most of the contentions of the petitioner are based on the statements in this order, it is reproduced below;
“19-9-86 ORDER
During inquiry in the Agartala Airport on 18-9-86 it is found that Sri Kinker Deb, S/o Sri Sukumar Deb of Town Shibnagar College Road(Ext.) Agartala has imported lottery tickets though Indian Airlines on 18-9-86 in contravention of the provision of the TST Act 1976 and hence he has committed offence U/s 37(1) of the TST Act 1976 and accordingly the below noted taxable goods are seized U/s 37.
1. Lottery tickets 2(two) Brief cases .
2. Lottery tickets 1 (one) Bag.
So Sri Deb is asked to show cause why action shall not be taken U/s 29 of the TST Act, 1976.
Sri Deb states that he was bound for Silchar but failing to manage Air Ticket he landed at Agartala and decided to go Silchar by roadways. He adds that he has no intention to sell the lottery tickets in Tripura.
But in my opinion that the above contention of the dealer is nothing a plea to avoid the tax and panelty after detection of unauthorised import of taxable goods. So, dealer’s contention cannot be accepted. Therefore, instead of taking action U/S 29 of the TST ACT, 1976 proceed to compound the offence U/S 37(1) as under:
Sale value of the Lottery tickets - Rs. 50,000/-
Tax Payable @20% - Rs. 10,000/-
Add Composition money - Rs. 20,000/-
Rs.30000/-
Shri Deb is directed to deposit the amount immediately failing which action shall be taken as per Law.
By another order passed on the very next day i.e. on 20.9.86, the date of payment eas extended to 22.9.86. The petitioner did not deposit the tax and composition money demanded by the superintendent of Taxes. On the other hand, he prefer a revision petition before the Commissioner on Taxes on the ground that the seizure of the lottery tickets by order 19.9.86 and the composition made by order dated 19.9.86 by the Superintendent on taxes, were illegal and without jurisdiction. It was contended, inter alia, that the composition was made by the Superintendent without the consent of the petitioner which was not in accordance with Law. It was further contended that even if it was f
