C.W.P.No.4621 o”
1. IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P.No.4621 of 2013 Date of Decision:18.03.2013 M/s Rions India .....Petitioner versus State of Punjab and others .....Respondents CORAM:- HON'BLE Mr.JUSTICE HEMANT GUPTA HON'BLE Ms.JUSTICE RITU BAHRI Present:- Mr.Avneesh Jhingan, Advocate for the petitioner.
Ms.Radhika Suri, Addl.
Advocate General, Punjab for respondents No.1 to 3.
Mr.S.S.Bangar, Assistant Excise and Taxation Commissioner – respondent No.4 in person.
HEMANT GUPTA, J.(Oral) This order shall dispose of three petitions, bearing C.W.P.No.4621 of 2013, C.W.P.No.4634 of 2013 and C.W.P.No.5748 of 2013 raising identical questions of law and facts.
For facility of reference, the facts are being taken from C.W.P.No.4621 of 2013.
The petitioner is a dealer registered under Delhi Value Added Tax Act and as also under the Central Sales Tax Act, 1956.
The petitioner received an order from Guru Nanak Dev University, Amritsar for supply of water purifieRs.Such purchase orders dated 12.02.2013 and 21.02.2013 have been appended with the writ petition as Annexure P.1.
The petitioner sent goods on Free on Rail (FOR) basis and has charged full rate of central Kumar Vimal 2013.03.21 10:23 I attest to the accuracy and integrity of this document Chandigarh C.W.P.No.4621 o”
2. sales tax @ 12.5%.
The goods were sent through truck not HR55L-0596 and GR No.50579 of Capital Transport Company, New Delhi.
The truck reached Information Collection Centre (ICC) Shambu on 27.2.2013 for giving information as per the statutory requirement under Section 51 of the Punjab Value Added Tax Act, 2005 but the goods were detained and notice was issued for 2.3.2013.
The grievance of the petitioner is that the goods were detained though the goods under transport were during the inter-state sale on charging of central sales tax but the payment was to be received after delivery of goods.
Therefore, the authorities under the VAT Act had no jurisdiction to detain the goods and the vehicle except for the purpose of verification of the genuineness of the documents.
The detention of the goods from 27.2.2013 till today has caused extensive loss to the petitioner not only on account of demurrage and detention of the truck but also for non-delivery of the goods to the University which was in time bound manner.
In reply filed on behalf of the official respondents through Shri S.S.Bangar, Assistant Excise and Taxation Commissioner, it has been pointed out that the goods were routed through Vicky Scientific Company, Amritsar to Guru Nanak Dev University and that the order for the said goods have been received by the petitioner from the said Vicky Scientific Company.
The statement of In-charge of the goods was recorded which has been produced as Annexure R.1.
From the said statement, it has been sought to be inferred that there exist serious suspicion regarding the genuineness of the documents under transaction and that the petitioner is Kumar Vimal 2013.03.21 10:23 I attest to the accuracy and integrity of this document Chandigarh C.W.P.No.4621 o”
3. trying to camouflage an interstate sale of goods meant for trade between a registered dealer of Delhi and Punjab by disguising the same in the shape of an interstate sales of goods between a registered dealer at Delhi and an unregistered person in Punjab of goods not meant for trade.
Thus, the goods along with vehicle were detained under Section 51(6)(a)(b) of the Punjab Value Added Tax Act, 2005 (for short, `the Punjab VAT Act') by the detaining officer.
Reliance is also made to the statement of the proprietor recorded on 28.2.2013 that the goods are on FOR basis and he is the owner of goods as no payment has been received by him regarding the said goods from the consignee.
Thus, the goods were still the property of the petitioner.
It is thus inferred that the prima-facie case of attempt to evade the tax by concealing the transaction between the petitioner and the Vicky Scientific Company and by carrying business in the State of Punjab in violation of Section 51 of the Punjab VAT Act, is made out.
Mr.Jhingan has pointed out that Mr.S.S.Bangar, who was impleaded as respondent No.4 has been taking similar actions earlier which were commented adversely even in the year 2000 in C.W.P.No.4288 of 2000 – M/s Rachna Steel Corporation, Mandi Gobindgarh v.
State of Punjab and another, decided on 27.4.2000; C.W.P.No.2432 of 2000 and C.W.P.No.2437 of 2000 – Varinder Kumar & Co., Khanna and another v.
State of Punjab and otheRs.decided on 21.9.2000; C.W.P.No.6859 of 2007 – Osaw Agro Industries PVT.Ltd.v.State of Punjab and otheRs.decided on 6.8.2007 as well as C.W.P.No.14386 of 2011 – M/s Azad Pipes PVT.Ltd.v.The State of Punjab and otheRs.decided on 12.8.2011.
In all these cases, it was Mr.Bangar – respondent No.4, who was instrumental in detention of Kumar Vimal 2013.03.21 10:23 I attest to the accuracy and integrity of this document Chandigarh C.W.P.No.4621 o”
4. goods in similar circumstances and in each case, costs were imposed upon this officer personally and not he has again detained the goods in the present three cases.
On the basis of the said argument, we called upon Mr.Bangar – respondent No.4 to file his affidavit.
Mr.Bangar has filed a short affidavit pointing out that the goods were detained by Mr.J.S.Waraich and that he has not passed any order and he had no role to play on the stage of detaining of goods.
We have heard learned counsel for the parties and Mr.Bangar, who appeared in person and find that action of Mr.Bangar is wholly unwarranted, perveRs.and smacks of malafides.
The documents produced by the petitioner shows that the goods have moved from Delhi on the basis of invoice Annexure P.2, the net price is FOR destination.
Ms.Radhika Suri, learned State Counsel fairly admitted that receipt of price is not a pre-condition for movement of goods from the consignot to consignee in the couRs.of inter state sales.
In fact, the definition of sale relied upon by Mr.Bangar contained in Section 2(g) of the Central Sales Tax Act, 1956 itself contemplate that the sale with its grammatical variations and expressions means, transfer of property in goods by one person to another for cash or deferred payment or for any other valuable consideration.
The statement recorded by the detaining officer is to the effect that the order was provided to the petitioner by Vicky Scientific Company.
If the order has been facilitated by Vicky Scientific Company, the said facilitator will not become purchaser of the goods.
The movement of goods from the documents produced is from seller to purchaser as if the goods Kumar Vimal 2013.03.21 10:23 I attest to the accuracy and integrity of this document Chandigarh C.W.P.No.4621 o”
5. were sent from consignot to consignee, i.e., the University.
The pre-payment of price is not a condition of sale.
Therefore, since no price was received, is not a ground to infer that it is not an inter-state sale.
The Division Bench judgment in Osaw Agro Industries PVT.Ltd.'s case (supra).referred by learned counsel for the petitioner deals with the tests for inter-state sale.
The Counsel also relies upon the Supreme Court's judgment reported as (1979) 2 SCC 24.– Union of India v.
K.G.Khosla and Co.; State of Andhra Pradesh v.
National Thermal Power Corporation Ltd., (2002) 5 SCC 20.and also the latest judgment of Division Bench of this Court in STR No.2 of 1991 Punjab State v.
M/s Dada Motor Garage, Jalandhar decided on 13.2.2009.
The courts have held that there are three tests to determine whether it is an interstate sale or not in terms of Section 3 of the Central Sales Tax Act.
The tests are; firstly the movement of goods from one State to another; secondly, the sale is effected by transfer of documents of title to the goods and thirdly, such movement of goods must be from one State to another, where the sale concludes.
The said tests were taken into consideration by a Division Bench of this Court in Oswa Agro Industries PVT.Ltd.'s case (supra) and M/s Dada Motor Garage's case (supra) and held that the sale is in the couRs.of inter-state sale.
In view of the tests laid down in the aforesaid judgment, we find that three tests are satisfied in the present case as well.
Annexure P.1 is the order placed by Guru Nanak Dev University, a statutory incorporated university placing order on the petitioner for purchase of certain goods.
Annexure P.2 is the invoice of sale of such goods.
The suspicion is not on Kumar Vimal 2013.03.21 10:23 I attest to the accuracy and integrity of this document Chandigarh C.W.P.No.4621 o”
6. the genuineness of the documents, but on the ground that the order was facilitated by Vicky Scientific Company and that the price has not been received.
Both the reasons to say the least are not available to return a finding that it is not a case of inter-state sale.
The order for purchase can be directly placed by the University as allegged by the Petitioner or through the medium of another person as stated by the State.
In either case, the nature of transaction does not ceases to be in the couRs.of interstate sale.
We find that the fiRs.adveRs.comment was given agaisnt Mr.Bangar by the Division Bench in M/s Rachna Steel Corporation's case (supra) on 27.4.2000 when it was observed as under:- “We are amazed at the stand taken by the Excise & Taxation Officer.
The power to impose penalty, if any, or take any other action against the petitioner is, of course, with the Assistant Excise & Taxation Commissioner but in terms of sub-section (6)(1) of Section 14B of the Act under which the goods have been detained, it is the duty of the detaining officer to release the goods if the consignot or consignee furnishes security or executes a bond with sureties in the prescribed manner.
When the petitioner furnished a bond with sureties there was no reason why Shri Banger did not release the goods as under the statute he alone was duty bound to release them no matter where the file was.
The petitioner states that this officer keeps harassing the transporters at the barrier and detains goods some times on fliMs.grounds and refuses to release them even when security is furnished.
Similar allegations have been made against this officer in some other cases as well which are still pending before us.
Without expressing any opinion on the merits of those cases, we cannot resist in observing that the excuse given by this officer in this case cannot be accepted and his conduct justified.
The plea that the file was not with him appears to be more of a mode to harass the petitioner.
We, therefore, allow this writ petition and direct the respondents to release the goods forthwith.
Since the goods and the Kumar Vimal vehicle were detained even after the petitioner executed a bond with 2013.03.21 10:23 I attest to the accuracy and integrity of this document Chandigarh C.W.P.No.4621 o”
7. sureties, we direct respondent no.2 to pay by way of compensation a sum of Rs.10,000/- to the petitioner.
This amount shall be paid by Shri Banger personally and shall not be debited to the State account.
The petitioner will also be entitled to have his costs which are assessed at Rs.2,000/-.”
Thereafter, in Varinder Kumar's case (supra).it has been observed as under:- “The learned Deputy Advocate General conceded that the action of Shri S.S.Bangar not to release the vehicles despite the directions given by the Court was not jusitfied but, at the same time, he pleaded that the officer concerned cannot be said to have acted with any ulterior motive.
He also stated that in view of the critical observations made by the Court, the officer concerned has been transferred.”
In Osaw Agro Industries PVT.Ltd.'s case (supra).it has been held as under:- “For the reasons stated above, this petition succeeds.
The notice dated 2.5.2007 (Annexure P.4) is quashed and respondents are saddled with costs of Rs.10,000/- which initially shall be paid by the respondent – State to the petitioner.
In view of the fact that Excise and Taxation Officer, respondent No.2 is not impleaded in person we direct the respondent- State to hold an enquiry and the costs of Rs.10,000/- be recovered personally from the officer who may be found guilty for having committed the lapse of detaining the goods.
The enquiry shall be undertaken without any loss of time and can be completed within a period of two months from the date of receipt of certified copy of this order.
It is needless to observe that the bank guarantee furnished by the petitioner shall be released immediately.”
In M/s Azad Pipes PVT.Ltd.'s case (supra).the following observations have been made:- “After considering the contentions raised by learned counsel for the parties, in our opinion, considering the conduct of the officer, who Kumar Vimal 2013.03.21 10:23 I attest to the accuracy and integrity of this document Chandigarh C.W.P.No.4621 o”
8. dealt with the case of the petitioner in the manner which was indefeasible and the State had to ultimately concede the relief prayed for, the officer deserves to be burdened with costs of Rs.25,000/-.
The amount shall initially be paid by the State, however, the same shall be recovered from the officer.”
The common thread in all these judgments is Mr.S.S.Bangar.
The officer has not learnt any lesson in the last thirteen years as the costs were imposed for the fiRs.time in the year 2000.
Though, the affidavit filed by him is that he has not detained the goods but the fact remains that in reply filed by Mr.Bangar for and on behalf of the State, he has given wholly untenable reasons to detain goods.
Therefore, we have no option but to allow the present petition with costs of Rs.50,000/- in each case, to be paid by Mr.Bangar personally within two months.
It is further directed that the respondents shall release the goods and the vehicle forthwith.
Apart from the costs, the respondent No.4 – Mr.S.S.Bangar shall pay the demurrage charges which according to Mr.Jhingan is @ Rs.1,500/- per day from the date of detention till the date of its realisation within two months.
We direct the Excise and Taxation Commissioner not to post this officer against any post dealing with road-side checking directly or indirectly for the purpose of verification of goods and shall also initiate disciplinary proceedings against the officer for consistently acting in violation of the finding recorded and the law.
( HEMANT GUPTA ) JUDGE March 18, 2013 ( RITU BAHRI ) Kumar Vimalrenu/Vimal 2013.03.21 10:23 JUDGE I attest to the accuracy and integrity of this document Chandigarh