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1994 Supreme(Raj) 545
V K Singhal J.
PLY MICA AND ANOTHER
Versus
STATE OF RAJASTHAN AND OTHERS.
S.B. Civil Writ Petition No. 5512 of 1994
Decided On: Decided On : 12-12-1994
The requirement of opportunity of being heard under the principles of natural justice is satisfied by providing an opportunity to the dealer to explain why the permission or authorization for purchase of the goods under section 23-D of the Rajasthan Sales Tax Act, 1954 should not be given.
Headnote:
RAJASTHAN SALES TAX ACT, 1954 - SECTION 23-D - PURCHASE OF GOODS BY COMMERCIAL TAXES DEPARTMENT - OPPORTUNITY OF HEARING - PRINCIPLES OF NATURAL JUSTICE - INTERPRETATION.
Fact of the Case:
The petitioner, a dealer in plywood and block board, received goods from a consignor who had shown a lower value in the bill. The Assistant Commercial Taxes Officer seized the goods and initiated proceedings under section 23-D of the Rajasthan Sales Tax Act, 1954, for purchase of the goods by the Commercial Taxes Department. The petitioner challenged the order, alleging violation of principles of natural justice as he was not given an opportunity to be heard or provided with a copy of the enquiry report.
Finding of the Court:
The court held that the provisions of section 23-D of the Act, read with rule 63-B(3)(ii), contemplate an opportunity of being heard. However, the court interpreted that the requirement of opportunity of being heard is satisfied by providing an opportunity to the dealer to explain why the permission or authorization for purchase of the goods should not be given. The court further held that the purchase of the goods at the value mentioned in the bill added by 10% is neither a penal action nor does it otherwise affect the right of the dealer.
Issues: 1. Whether the petitioner was denied an opportunity of being heard in violation of the principles of natural justice? 2. Whether the purchase of goods by the Commercial Taxes Department under section 23-D of the Act affects the rights of the dealer?
Ratio Decidendi: 1. The court held that the principles of natural justice require an opportunity of being heard before a decision is taken that may affect the rights of a person. However, the court interpreted that the requirement of opportunity of being heard is satisfied by providing an opportunity to the dealer to explain why the permission or authorization for purchase of the goods should not be given. 2. The court held that the purchase of the goods at the value mentioned in the bill added by 10% is neither a penal action nor does it otherwise affect the right of the dealer. The court reasoned that the object of section 23-D is to prevent evasion of tax by underbilling and that the dealer has the option to sell the goods at the increased value or pay a penalty.
Final Decision: The court dismissed the writ petition, holding that the petitioner was not denied an opportunity of being heard and that the purchase of goods by the Commercial Taxes Department under section 23-D of the Act did not affect the rights of the dealer.
V. K. SINGHAL, J. - This writ petition has been filed against the order of the Deputy Commissioner (Administration) Commercial Taxes Department, dated September 26, 1994, by which the goods consigned to the petitioner were directed to be purchased under section 23-D, of the Rajasthan Sales Tax Act, 1954 (hereinafter called as "the Act") read with rule 63-B of the Rajasthan Sales Tax Rules, 1955 (hereinafter called as "the Rules").
2. The brief facts of the case are that the petitioner is dealing in plywood and block board, etc. The petitioner gave an order to M/s. A.T.I. Plywood Industries Pvt. Ltd., E-131, Industrial Area, Bhiwadi, District Alwar to send some quantity of plywood and block board of different quality and of different sizes. The goods were supplied vide bill No. 60 dated August 30, 1994 and were despatched through vehicle No. HR-36-4445 vide GR No. 8638. The consignor has shown the quantity, rate of the commodity and has charged the excise duty. The Rajasthan sales tax on the value of 40 per cent has been charged as 60 per cent of the tax is exempt as per eligibility certificate granted to the consignor being a new unit. When the goods were in transit, they were checked by the Assistant Commercial Taxes Officer (Flying Squad) on August 31, 1994 and he brought the truck to Kar Bhawan for enquiry under section 23-D of the Act. The goods were seized and the delivery thereof was given to the petitioner on security on August 31, 1994 itself. The Deputy Commissioner (Anti-Evasion), Commercial Taxes Department issued a notice to the petitioner under section 23-D of the Act read with rules 55 and 63B of the Rules to appear before him on September 24, 1994. In the meantime the enquiry was made by the Assistant Commercial Taxes Officer (Anti-Evasion) and according to his report it was found that it is a matter of underbilling and the value of the goods has not been correctly stated in the bill. The notice was issued by the Deputy Commissioner (Anti-Evasion) on the proposal sent by the Assistant Commercial Taxes Officer for granting sanction under section 23-D of the Act to purchase the goods after addition of 10 per cent. A reply to the said notice was submitted and it was stated that no enquiry was conducted. The petitioner has prayed that the documents and the facts on the basis of which underbilling is alleged may be provided to him. Further prayer was made on September 24, 1994 to the Deputy Commissioner that the liability of tax is at first point and therefore so far as the petitioner is concerned the goods are tax-paid and question of any evasion of tax in his hand does not arise. A copy of the preliminary enquiry report or the proposal which was sent by the Assistant Commercial Taxes Officer to the Deputy Commissioner was not provided to the petitioner.
3. The grievance of the petitioner is that the petitioner should have been given an opportunity and he was not beard either in the preliminary enquiry nor was he given an opportunity and even the copy of proposal sent by the Assistant Commercial Taxes Officer or the copy of the report was not provided to him while passing the order dated September 26, 1994. It is submitted that the order passed by the Deputy Commissioner is without application of mind and is contrary to the principles of natural justice.
4. The arguments of the learned counsel for the parties have been heard. The provisions of section 23-D and rule 63-B read as under -
"Section 23-D. Special provision relating to underbilling. - Where the Commissioner, Commercial Taxes, deems it necessary, he may permit or authorise any officer, not below the rank of an Assistant Commercial Taxes Officer or In-charge, Check-post, to purchase any goods from a dealer at the price payable within the period and the manner as may be prescribe in this behalf shown in his purchase bill increase by 10 per cent or sale bill, as the case may be. The dealer shall be bound to sell such goods to the officer so permitted
