Judgment:
1. The petitioner is a registered dealer in raw rubber sheets in the district of Kanyakumari. On June 10, 2000 he had sold raw rubber sheets to the extent of 10 tonnes to one Lalith Rubber Traders, Main Road, Chrompet, for a sum of Rs. 2 lakhs. The sale is said to be covered by bill number 4 dated June 10, 2000. The consignment sent through lorry to the purchaser. The lorry driver was in possession of copies of sale bill, form XX delivery note, receipt issued by the regulated market, Nagercoil. According to the petitioner these are the only records to be carried by the vehicle as prescribed in Section 44 of the Tamil Nadu General Sales Tax Act, 1959. On the way the vehicle was checked at Kavalkinaru check-post. It is also pointed out that rubber is taxable at the point of last purchase in the State. According to the petitioner his sale to the purchaser at Chrompet is not taxable under the Tamil Nadu General Sales Tax Act. On June 14, 2000 the lorry was found in Manali and the respondent questioned the driver about the legality of the transport. Under an order of detention G.D. 11/2000-2001 dated June 14, 2000, the goods were detained. The petitioner gave a reply giving reasons for his presence at Manali whereas the destination was Chrompet. The petitioner thereupon filed O.P. No. 777 of 2000 seeking release of the goods on the ground that the detention was illegal. By an order dated June 20, 2000, the Special Tribunal directed the respondent to pass orders on the basis of records and the explanation of the petitioner on or before June 27, 2000. The petitioner was given liberty to move the higher authorities by way of revision, if aggrieved by the order of the respondent. Thereafter a notice was issued on June 26, 2000 calling upon the petitioner to state whether they are willing to have the offence compounded failing which the respondent had no other option except to prosecute the petitioner before the concerned Magistrate. In this notice the respondent had examined the records and the explanation of the petitioner and holds that the explanation for the presence of the vehicle at Manali whereas the destination was Chrompet had not been properly explained. The respondent had observed that the petitioner had contravened the provision of Sections 40(3) and 44 of the Tamil Nadu General Sales Tax Act, punishable under Section 45(2)(b), 45(4)(a) and 45(6) of the Tamil Nadu General Sales Tax Act.
Therefore, he was giving notice under Section 46(2)(a) for payment of compounding fee of Rs. 48,000 being tax and penalty, at the rate of 8 per cent on Rs. 2 lakhs, To the above proceeding the petitioner had again sent a reply on June 26, 2000 stating that he had not committed any offence and the goods had been moved with proper records and therefore he was not willing to compound the offence. He was prepared to face the prosecution, but wanted release of the goods. The original petition is to quash the proceedings in G.D. 117 2000 dated June 26, 2000 and to direct the release of the goods on collection of tax alone, as provided under Section 42(3) of the Tamil Nadu General Sales Tax Act. The respondent has produced the records in answer to the notice issued by us. The learned Government Advocate opposes the prayer in the original petition and says that if the petitioner was willing to be prosecuted, there was no question of release of the goods and the goods will be sent to Magistrate as property involved in the offence and the petitioner has to seek orders only before the Magistrate.
2. Mr. A. Suresh, the learned counsel for the petitioner, has taken us through the relevant provisions of law and argues that under Section 42(3) the respondent is bound to release the goods provided the tax is paid. We have examined the provisions of law and we are unable to agree with the learned counsel for the petitioner. The request of the petitioner, if conceded, would amount to contravention of the entire scheme of the Act. We will illustrate the point by referring to the provisions of law. Section 41-A gives the power to enter into and search a vehicle and examine the goods and inspect the records relating to such goods. Section 42 relates to the establishment of check-post and the power of the officer to stop vehicles and carry out a search.
Section 42(3) says that if the sale or purchase of goods had been properly accounted for with reference to documents mentioned in Sub-section (5) the officer shall release the goods and the vehicle. If tax is payable under the Act the goods can be detained till the tax is paid or sufficient security is furnished for payment of tax. Section 44 prescribes the records, which should accompany a vehicle. Section 44A relates to the issue of a transit pass and we are not concerned with it now. Section 45 talks of offences and penalties. In the proceedings of the respondents Sections 45(2), 45(4)(a) and 45(6) are mentioned. We will extract those provisions of law : "Section 45(2)(b) : fraudulently evades the payment of any tax assessed on him or any fee or other amount due from him under this Act, or Section 45(4)(a) : Any owner or other person in-charge of a boat or a goods vehicle who fails to carry with him any of the records or documents specified in Section 43 or Section 44, as the case may be, shall, on conviction, be liable to simple imprisonment which may extend to six months or a fine which may extend to two thousand rupees or both.
Section 45(6) : Any person who makes any statement or declaration in any of the records or documents specified in Section 43 or Section 44, as the case may be, which statement or declaration he knows or has reason to believe to be false, shall, on conviction, be liable to simple imprisonment which may extend to six months, or a fine which may extend to two thousand rupees or both." 3. The question whether the petitioner has committed an offence with reference to those provisions or not is a matter to be decided by the Magistrate when prosecution is launched. No doubt the petitioner asserts that he has not committed any offence and the revenue insists that the petitioner has committed an offence. As we have already stated this is a matter which has to be examined by the Magistrate as and when prosecution is launched. Before launching a prosecution Section 46 calls upon the prescribed authority to give an option to the person suspected of having committed an offence to pay a composition fee as prescribed in Section 46(1)(a) or (1)(b). In this case the respondent has worked out the composition fee as double the amount of tax recoverable in addition to the tax so recoverable. This is permitted by Section 46(1)(a) of the Tamil Nadu General Sales Tax Act. Now the argument of the petitioner is that he is not willing to have the offence compounded, because he has not committed any offence. He therefore, argues that one must switch back to Section 42(3) and permit the petitioner to pay the tax and have the goods released. We are clearly of the opinion that is not the law or the scheme of the Act.
Once a person refuses to compound the offence, the logical end is to prosecute the person, in which case there is no provision for releasing of the goods on payment of any amount. It is well-known that when a prosecution is launched, the property involved in the offence has to be placed under the control of the Magistrate. The question of disposal of the property will depend upon the orders of the Magistrate and it is always open to the party, seek return of the goods if the property is likely to be damaged. We will only make a reference to Section 451 of the Criminal Procedure Code, 1973, for easy understanding of the view taken by us.
"451. Order for custody and disposal of property pending trial in certain cases.--When any property is produced before any Criminal Court during any inquiry or trial, the court may make such order as it thinks fit for the proper custody of such property pending the conclusion of the inquiry or trial, and, if the property is subject to speedy or normal decay, or if it is otherwise expedient so to do, the court may, after recording such evidence as it thinks necessary, order it to be sold or otherwise disposed of.
Explanation.--For the purposes of this section, 'property' includes-- (a) property of any kind of document which is produced before the court or which is in its custody ; (b) any property regarding which an offence appears to have been committed or which appears to have been used for the commission of any offence." 4. There being no provision of law for directing release of the goods under the Tamil Nadu General Sales Tax Act when a prosecution is launched, we have come to the conclusion that any direction relating to release of the goods can be obtained only from the concerned Magistrate before whom the prosecution is launched. If for any reason the petitioner seeks release of the goods and at the same time face prosecution, his only option is to pay the tax and double the amount, as demanded by the respondent, namely, the compounding fee of Us.
48,000 under protest, and claim refund if he succeeds in the prosecution, If the petitioner is aggrieved by the determination of the compounding fee, his only remedy is to file a revision petition before the appropriate authority. In these circumstances, we are unable to grant any relief to the petitioner and the original petition is dismissed.
And this tribunal doth further order that this order on being produced punctually observed and carried into execution by all concerned.
Issued under my hand and the seal of this Tribunal on the 28th day of July, 2000.