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1999 Supreme(Gau) 319
GAUHATI HIGH COURT
D.Biswas, J.
Hajarimall Nandlall -Appellant
Versus
State of Assam -Respondent
Civil Rule Nos 1531,1532,1533 of 1995 and 2009 of 1997
Decided On : 22-09-1999
A.K.Saraf, S.K.Kejriwal, S.Kejriwal, H.N.Sharma
The provisions of the Assam Agricultural Income Tax Act, 1939, and the Assam General Sales Tax Act, 1993, do not require tea estates to produce Tax Clearance Certificates at check posts. Section 46(4) of the 1993 Act empowers officers to examine documents to ascertain tax payment, but TCCs are not specifically required. Sub-section (7) of section 46 provides for alternative documents, including bills of sale, delivery notes, or prescribed documents. Rule 43(7)(j) prescribing TCCs is contrary to the Act and cannot be insisted upon.
Headnote:
TAX CLEARANCE CERTIFICATE - ASSAM AGRICULTURAL INCOME TAX ACT, 1939 - ASSAM GENERAL SALES TAX ACT, 1993 - SECTION 46(4), 46(7), 72 - RULE 33(2), 43(7)(J) - Petitioners, tea estate owners, challenged the demand for Tax Clearance Certificates (TCCs) by respondents at check posts for transporting tea. The Court held that: 1. No provision in the Assam Agricultural Income Tax Act, 1939, or the Assam General Sales Tax Act, 1993, requires tea estates to produce TCCs at check posts. 2. Section 46(4) of the 1993 Act empowers officers to examine documents to ascertain tax payment, but TCCs are not specifically required. 3. Sub-section (7) of section 46 provides for alternative documents, including bills of sale, delivery notes, or prescribed documents. Rule 43(7)(j) prescribing TCCs is contrary to the Act and cannot be insisted upon. 4. The Court directed respondents not to insist on TCCs until the law is suitably amended.
Fact of the Case:
Petitioners, tea estate owners in Assam, challenged the demand for Tax Clearance Certificates (TCCs) by respondents at check posts for transporting tea. They argued that no provision in the Assam Agricultural Income Tax Act, 1939, or the Assam General Sales Tax Act, 1993, requires tea estates to produce TCCs at check posts.
Finding of the Court:
The Court held that: 1. No provision in the Assam Agricultural Income Tax Act, 1939, or the Assam General Sales Tax Act, 1993, requires tea estates to produce TCCs at check posts. 2. Section 46(4) of the 1993 Act empowers officers to examine documents to ascertain tax payment, but TCCs are not specifically required. 3. Sub-section (7) of section 46 provides for alternative documents, including bills of sale, delivery notes, or prescribed documents. Rule 43(7)(j) prescribing TCCs is contrary to the Act and cannot be insisted upon. 4. The Court directed respondents not to insist on TCCs until the law is suitably amended.
Issues: 1. Whether the Assam Agricultural Income Tax Act, 1939, or the Assam General Sales Tax Act, 1993, requires tea estates to produce TCCs at check posts? 2. Whether Section 46(4) of the 1993 Act empowers officers to examine documents to ascertain tax payment, and whether TCCs are specifically required? 3. Whether Sub-section (7) of section 46 provides for alternative documents, including bills of sale, delivery notes, or prescribed documents, and whether Rule 43(7)(j) prescribing TCCs is contrary to the Act and cannot be insisted upon?
Ratio Decidendi: 1. The Court interpreted the provisions of the Assam Agricultural Income Tax Act, 1939, and the Assam General Sales Tax Act, 1993, and found no provision requiring tea estates to produce TCCs at check posts. 2. The Court analyzed Section 46(4) of the 1993 Act and held that it empowers officers to examine documents to ascertain tax payment, but TCCs are not specifically required. 3. The Court examined Sub-section (7) of section 46 and found that it provides for alternative documents, including bills of sale, delivery notes, or prescribed documents. It held that Rule 43(7)(j) prescribing TCCs is contrary to the Act and cannot be insisted upon.
Final Decision: The Court allowed the writ petitions and directed the respondents not to insist upon Agricultural Income Tax Clearance Certificate and Sales Tax Clearance Certificates at the check posts or barriers until and unless the law is suitably amended for the purpose of giving effect to the intention underlying the provisions of section 46 (4). They are further restrained from insisting upon for more than one of the documents mentioned in clause (j) of sub-rule (7) of Rule 43 other than General Sales Tax Clearance Certificate.
2. Petitioners grievance in all the writ petitions and the prayer made are identical. They carry on business of plantation, manufacture and sale of black tea. The petitioners are also liable to file returns of income tax and sale as per provisions of Assam Agricultural Income Tax Act, 1939, Central Sales Tax Act, 1956 and the Assam Sales Tax Act, 1947 as amended upto date and the Rules framed thereunder. According to them, they have paid taxes for the assessment years 1991 to 1995. They are also clearing their income tax as assessed from time to time. The tea manufactured in their tea estates is despatched to various places in the outside Assam. The Tax Clearance Certificate annexed with the writ petitions also show that there was no outstanding payable by them on account of taxes. The tea produced by them in course of transit has to pass through various check posts (tax) set up under section 44B of 1947 Act and the Rules framed thereunder. During the course of last 20 years, the tea produced by them were allowed to be transported through the check posts after filling of declaration as per provisions of 1947 Act. No other document was ever insisted on by the officers at the check posts for allowing passage of tea. But since January, 1994 the officials at Khanapara, Srirampur, Biswanath Chariali and Borlissa Check Posts were not permitting transportation of tea without production of Sales Tax and Agricultural Income Tax Clearance Certificates. The Act of 1947 was substituted by Assam General Sales Tax Act, 1993 with effect from July 1,1993. Section 46 (3) of the Act of 1993 provides that in order to prevent or check evasion of tax, the State Govt may by notification direct the setting up of check posts or erection of a barriers. Section 74 of 1993 Act provides that all Rules, notifications, registrations or other documents, forms and notice made or prescribed or issued under the repealed statute which were in force immediately before such repeal “may be taken or continued as if this Act (the 1993 Act) had not been passed.” Neither under the Act of 1947 nor under the Act of 1993 any provision has been made requiring the tea estates to produce Sales Tax Clearance Certificates at the check posts set up under the said Act. The said Acts or the Rules framed thereunder also do not contain any provision or issue of Sales Tax Clearance Certificate Rules 33 and 34 of the Rules framed under 1993 Act laid down the procedure for application and issuance of Tax Clearance Certificate on a different context.
3. It is further submitted that although there is no provision under the Assam Agricultural Income Tax Act, 1939, the petitioners have been compelled to obtain Agricultural Income Tax Clearance Certificate from respondent No. 3. That apart, the officials at check posts insisted for production of Agricultural Income Tax Clearance Certificate for which the petitioners had to apply for such certificates before the respondent Nos 3 and 4. But the respondent Nos 3 and 4 issued such certificates for a limited period of 1 to 3 months only resulting into harassment to the petitioners and dislocation in their business.
4. It is submitted further that the respondents have no power and authority under the said Act either
