The State of Andhra Pradesh Vs. Vijayaraju Appalaraju and anr. - Court Judgment

Excerpt:
sales tax - detention of sale goods - sections 29, 29 (2), 29 (3) and 36 of andhra pradesh general sales tax act and rule 33-a of andhra pradesh general sales tax rules - whether action of check post officer in detaining bags of rice of respondent under section 29 read with rule 33-a justified - check post officer can detain good only for purpose of ascertaining whether sale of purchase liable to tax - driver of vehicle was carrying all necessary documents of sale - merely because check post officer has authority to stop vehicle and check it he cannot detain goods - held, detention of rice bags illegal. - maximssections 2(xv) & 3(1) & (3): [v.v.s. rao, n.v. ramana & p.s. narayana, jj] ghee as a live stock product held, [per v.v.s. rao & n.v. ramana, jj - majority] since ages, milk is preserved by souring with aid of lactic cultures. the first of such resultant products developed is curd or yogurt (dahi) obtained by fermenting milk. dahi when subjected to churning yields butter (makkhan) and buttermilk as by product. the shelf life of dahi is two days whereas that of butter is a week. by simmering unsalted butter in a pot until all water is boiled, ghee is obtained which has shelf life of more than a year in controlled conditions. ghee at least as of now is most synthesized, ghee is a natural product derived ultimately from milk. so to say, milk is converted to dahi, then butter. scientifically or common sense point of view, even though ghee is not directly obtained from milk (which is certainly a product of cow/buffalo), it is certainly a product of a product of livestock i.e., cow or buffalo. it would be rather illogical or irrational to say that ghee is not a milk/dairy product or to say that it is not a product of livestock. section 2(x) and 2(iv) of the act used the plural products of livestock. the legislative intention is very clear that not only a product of livestock like milk (when notified by government), butter etc., are products of livestock but even derivative items (derived from a product of livestock) are intended to be product of livestock for the purpose of the act. thus the term ghee is to be interpreted on the basis of expression products of livestock as defined in section 2(xv) of the act. whatever products are declared as such by the government by notification, they become products of livestock for purpose of the act. consequently it was held that ghee is the product of livestock and by reason of power conferred under section 3(1) read with section 3(3) of the act on them it is competent for the government to declare ghee as product of livestock for the purpose of regulating its purchase and sale, in any notified market area. [per p.s. narayana, j,(dissenting)]if livestock or agricultural produce and the categories thereof had been specified in the statute itself by appending in the schedule or otherwise, that would stand on a different footing from the present provisions of the act which contemplate the issuance of notifications in accordance with the procedure ordained by the provisions specified supra. in view of the clear definition of the livestock and products of livestock, the ghee being derivative of butter or cream, if the language employed in definition to be taken as they stand, the only conclusion would be is that the ghee would not fall within ambit of the definitions aforesaid. sections 4 & 3: [v.v.s. rao, n.v. ramana & p.s. narayana, jj] declaration of notified area held, it is only under section 3 that government are required to publish draft notification inviting objections and section 3(3) mandates to consider objections and suggestions before issuing declaration order. it is very conspicuous that section 4 does not contemplate any draft notification inviting objections and suggestions before either constituting market committee, establishing notified market area or declaring notified market area for the purpose of levy of market fees. thus, except ordaining government to issue preliminary/draft notification inviting objections at the time of issuing declaration order under section 3(3) of the act nowhere much less under section 4 contemplates issuing a notification inviting objections. when the legislature has chosen to exclude principles of natural justice, the court cannot introduce rule of audi alteram partem and render statutory provisions unworkable. in such a case, maxim, expressum facit cessare tacitum (when there is express mention of certain things, then anything not mentioned is excluded) would apply. section 7: [v.v.s. rao, n.v. ramana & p.s. narayana, jj] levy of market fee element of quid pro quo - held, levying fees and tax are two forms of exercise of sttaes taxing power. there is no quid pro quo between tax payer and public authority as tax is a part of common burden. it is also well settled that fee is charge for special service or a benefit given to a class of individual fee payers and fee collected need not have correlation with actual service in exactitude but if it is shown that substantial portion of the fee is expended or the purpose for which it is levied, it would be justified. expressum facit cessare tacitum sections 4 & 3: [v.v.s. rao, n.v. ramana & p.s. narayana, jj] meaning when there is express mention of certain things, then anything not mentioned is excluded. - 9. now, the question is not whether the third defendant-check post officer has not got the authority to stop the vehicle and check it but the question is after stopping the goods vehicle for checking it whether he detained it for good reason or whether such detention is mala fide ? 10. simply because the check post officer has got the authority to stop the vehicle and check it he cannot detain the goods unless there is good reason. when there is no good reason to detain the goods, his action of detaining the goods longer than the time necessary for checking the same, must be construed as mala fide. thus, the facts in this case clearly reveal that the check post officer has acted mala fide in detaining the goods in spite of producing the proceedings, exhibit a-6, by the dealer before him. section 29(3)(b) of the act clearly prescribes :(i) that the tax, if any, payable under this act in respect of the sale or purchase of the goods carried has not been paid; or (ii) that the sale or purchase of the goods carried has, for the purpose of payment of tax under this act, not been properly accounted for in the documents referred to in clause (b) of sub-section (2); and if the said officer is satisfied, after making such enquiry as he deems fit, that with a view to prevent the evasion of tax payable in respect of the sale or purchase of the goods carried, it is necessary to detain the goods, he shall detain the goods and direct the driver or other person in charge of the goods vehicle or boat -(i) to pay such tax, or (ii) to furnish security for an amount equal to twice the amount of tax payable in such form and in such manner and to such authority as may be prescribed, on behalf of the person liable to pay such tax.lakshminarayana reddy, j.1. this second appeal is preferred against the decree and judgment passed in a.s. no. 76 of 1983 on the file of the additional subordinate judge, srikakulam. defendants 1 and 2 in the suit are the appellants. the facts that led to this second appeal are as follows : the first respondent, herein, filed the suit o.s. no. 346 of 1978 on the file of the district munsif, srikakulam, claiming a sum of rs. 2.900 being the value of 11 bags of rice seized from him by the defendants together with interest, other expenses and also damages. 2. the plaintiff is a dealer in rice and is having a valid foodgrains licence. his place of business is at palasa in srikakulam district. he sold 11 bags of rice on 7th february, 1978 to a dealer at vizianagaram and the same was being transported from palasa to vizianagaram through m/s. bharat motor parcel service with necessary documents, viz., credit bill and way-bill. on the way, it appears, that the third defendant commercial tax officer (check post) detained the stock and got unloaded it on the grounds that the same is not having a permit from the collector (civil supplies), srikakulam and levy-free certificate issued by the district supply officer, srikakulam. even though it was pleaded on behalf of the dealer that there is no restriction on movement of rice from srikakulam to vizianagaram district and a permit from the collector (civil supplies), srikakulam and levy-free certificate issued by the district supply officer, srikakulam are not necessary, but, the third defendant did not heed the plea and preferred to detain the stock. 3. thereupon, the plaintiff-dealer approached the district supply officer, srikakulam and the district supply officer issued exhibit a-6, proceedings in r.c. no. 2549/78/s2/dated 20th february, 1978 in which, he made it clear, that the stock of rice is a second sale and there was no restriction on movement and the certificates asked for are not necessary. even then the third defendant did not release the stock and kept it with him. the stock being rice subsequently got spoiled. in those circumstances, the plaintiff filed suit for realisation of the price of rice of the stock seized with interest and other expenses. 4. on the other hand, the plea of the defendants appears to be that the third defendant got the stocks unloaded suspecting the genuineness of the credit bill and way-bill at srikakulam check post, because they were not accompanied by a permit issued by the collector (civil supplies), srikakulam and levy-free certificate and that the third defendant is justified in detaining the stock. on these pleadings, the trial court framed the following issues : (1) whether the plaintiff is entitled to the suit amount or any portion thereof ? (2) whether the plaintiff is entitled to the interest claimed and if so, at what rate and for what period (3) whether the suit is not maintainable in law (4) whether there is a notice under section 80, c.p.c., prior to the suit and if so, it is valid 5. after trial, the trial court found that the plaintiff is entitled to the suit amount with interest as claimed; that the suit is maintainable and that the notice under section 80, c.p.c., is valid and ultimately decreed the suit as prayed for as against d-1 and d-2. 6. thereupon, the defendants 1 and 2 filed an appeal in a.s. no. 76 of 1983 on the file of the additional subordinate judge, srikakulam. the learned subordinate judge framed the necessary points and ultimately dismissed the appeal. 7. appellants-defendants 1 and 2 now preferred this second appeal. the substantial question that has sought to be raised in this second appeal is whether the court below has erred in holding that the action of the commercial tax officer, srikakulam does not come under section 29 of the act read with rule 33-a of the a.p. general sales tax rules. in other words, the argument in this second appeal is that the third defendant-check post officer is justified in detaining the 11 bags of rice in view of his powers under section 29 of the act read with rule 33-a of the a.p. general sales tax rules. section 29(2) of the a.p. general sales tax act reads as follows : 'at every check post or barrier mentioned in sub-section (1), or at any other place when so required by any officer empowered by the state government in this behalf, the driver or any other person in charge of a goods vehicle or boat shall stop the vehicle or boat, as the case may be, and keep it stationary as long as may reasonably be necessary, and allow the officer in charge of the check post or barrier, or the officer empowered as aforesaid, to examine the contents in the vehicle or boat and inspect all records relating to the goods carried, which are in the possession of such driver or other person in charge for the purpose of ascertaining whether there has been any sale or purchase of the goods carried and in case there was sale or purchase of the goods carried, whether such sale or purchase is liable to tax under this act, and if so - (a) whether such tax has been paid; or (b) whether the sale or purchase of the goods carried has, for the purpose of payment of tax under this act, been properly accounted for in the bills of sale, or delivery notes or such other documents as may be prescribed.' 8. therefore, we see from the above section of the act the check post officer can detain the goods vehicle only for the purpose of ascertaining whether there has been sale or purchase of the goods carried and in case there was sale or purchase of the goods carried, whether such sale or purchase is liable to tax under this act and if so such tax has been paid. as we have seen from the evidence that the driver of the vehicle is carrying the credit bill and way-bill and other necessary documents. it is also now beyond doubt that there is no restriction on movement from srikakulam to vizianagaram with regard to rice and there is no need to get any permit from the collector (civil supplies), srikakulam and levy-free certificate issued by the district supply other, srikakulam. that being the case, when the third defendant-check post officer refused to release the stock in favour of the plaintiff-dealer in spite of producing the proceedings as in exhibit a-6 from the district supply officer, the same would go to show mala fides on the part of the third defendant. it is very clear from the facts of this case that the third defendant wantonly detained the goods vehicle knowing that the goods are likely to be spoiled if detained beyond reasonable time. 9. now, the question is not whether the third defendant-check post officer has not got the authority to stop the vehicle and check it but the question is after stopping the goods vehicle for checking it whether he detained it for good reason or whether such detention is mala fide 10. simply because the check post officer has got the authority to stop the vehicle and check it he cannot detain the goods unless there is good reason. when there is no good reason to detain the goods, his action of detaining the goods longer than the time necessary for checking the same, must be construed as mala fide. thus, the facts in this case clearly reveal that the check post officer has acted mala fide in detaining the goods in spite of producing the proceedings, exhibit a-6, by the dealer before him. 11. the learned government pleader argued that the superior officer d-2 passed the order under exhibit b-22 to the effect directing the check post authorities to release the goods either on accepting the security or detention of so much quantity of rice equivalent to the tax payable and in view of this order by d-2, the court has no jurisdiction to entertain the suit. 12. there is no substance in this argument. it must be seen that this order has been passed by d-2 after a lapse of 8 months. what is more is that this order has been passed after the suit notice is served on him and this order purports to have been passed under section 29 of the a.p. general sales tax act. section 29(3)(b) of the act clearly prescribes : (i) that the tax, if any, payable under this act in respect of the sale or purchase of the goods carried has not been paid; or (ii) that the sale or purchase of the goods carried has, for the purpose of payment of tax under this act, not been properly accounted for in the documents referred to in clause (b) of sub-section (2); and if the said officer is satisfied, after making such enquiry as he deems fit, that with a view to prevent the evasion of tax payable in respect of the sale or purchase of the goods carried, it is necessary to detain the goods, he shall detain the goods and direct the driver or other person in charge of the goods vehicle or boat - (i) to pay such tax, or (ii) to furnish security for an amount equal to twice the amount of tax payable in such form and in such manner and to such authority as may be prescribed, on behalf of the person liable to pay such tax. 13. thus, this provision has to be exercised by the check post officer but not by a superior officer on a report of the check post officer after eight months of the occurrence. it must be remembered that during this period the goods, i.e., rice, would have been completely spoiled. 14. the provision under section 36 of the a.p. general sales tax act does not come to the rescue of the defendants. under this section, the bar is only in entertaining any suit, or other proceedings to set aside or modify, or question the validity of any assessment, order or decision made or passed by any officer or authority under the act or any rules made thereunder. 15. in the case before us, we are not concerned with the modification or question the orders passed by any authority. but we are only concerned with mala fide action on the part of the defendant-check post officer in the case. that being the case, i am not in agreement with the argument of the learned counsel for the appellants that the civil court has no jurisdiction to entertain the suit. 16. therefore, i do not see any substantial question of law involved in this case which would warrant upsetting the judgment of the two lower courts. thus, there are no merits in this second appeal and the same is liable to be dismissed. the second appeal is dismissed with costs to r-1. 17. appeal dismissed.