Shivalik Fibres Pvt. Ltd. vs The State of Punjab and Others

N.K. Kapoor, J.—Petitioner has sought issuance of writ of certiorari quashing the proceedings of illegal detention of goods and the truck by respondent No. 2 with the further direction to respondents to release the goods and the truck along with seized documents by him.

The petitioner is carrying on business of manufacturing and supply of cotton yarn at Nalagarh (Himachal Pradesh). Petitioner is a registered dealer under the Himachal Pradesh General Sales Tax Act (for short ''the Act'') and the Central Sales Act (for short ''Central Act'') M/s. Nahar Spinning Mills Ltd. Ludhiana is also a registered dealer under the Punjab General Sales Tax Act, (for short ''Punjab Act'') and Central Sales Tax Act. The case set up by the petitioner is that in order to supply the cotton yarn to M/s. Nahar Spinning Mills Ltd. the petitioner drew Invoice (Bill No. 13 dated 25.10.1993) showing the petitioner as a consignor and M/s. Nahar Spinning Mills Ltd. as consignee. A copy of the invoice is Annexure P-2. According to the petitioner said quantity of cotton yarn could leave the premises after the Central Excise is paid and the gate pass is issued by the Central Excise authority. In the instant case, the gate pass under Rule 52-A and 173-G of the Central Excise Act was issued-Annexure P-3 and so the goods were loaded in the truck and the document accompanying made mention of the name of the consignor and the consignee sales tax No. and Central tax No., its destination and weight of the cotton yarn. Since the goods carrier could leave the territory of Himachal Pradesh with a declaration in Form St-XXVI-A to be filled in by the selling dealer and to be furnished at the last Sales Tax Check Post in Himachal Pradesh for its entry in Punjab the aforesaid goods were accompanied by such a declaration bearing No. 263164 - Annexure P-5. This declaration was tendered at the Sales Tax Barrier, Dheruwal Multipurpose Barrier in Himachal Pradesh and a certificate was issued by the authority duly certifying that truck No. HPA-7761 carrying cotton yarn of M/s. Shivalik Fibres Pvt. Ltd. was being sent to M/s. Nahar Spinning Mills Ludhiana. The truck carrying the goods was intercepted by the sales tax staff and was asked to hand over the sale bill/invoice, excise duty pass/GR etc. Since the truck carrying the goods was detained by the respondents, the same has been challenged being wholly arbitrary and without jurisdiction.

Notice of motion was issued to the respondents with a further direction to release the truck and the goods subject to the petitioner furnishing a bank guarantee for a sum of Rs. 90,000/-. The respondents put in appearance and filed written statement. By way of preliminary objection, it is stated that the petitioner has an alternate remedy of appeal/revision under the Punjab Act which admittedly has not been resorted to by the petitioner. Since the petitioner knowingly has not preferred to file appeal, the present petition is liable to be dismissed on this ground alone. Secondly it has been stated that a penalty of Rs. 90,000/- has already been imposed by respondent No. 3 u/s 14-B(7) of the Punjab Act vide its order dated 30.10.1993. The order imposing the penalty has not been assailed by the petitioner and on this ground alone, the petition merits dismissal. On facts it has been stated that the bill accompanying the goods did not bear any serial number. The column where bill number is to be printed is left blank. The petitioner knowingly has misled this court & so this petition deserves to be dismissed on this ground alone. Further elaborating it is stated that in fact, the petitioner had been carrying fictitious documents. The modus-operandi of the petitioner appears to be that unserial numbered bills are issued; goods sent to the customer and in the event of their reaching destination without any check, the same are not taken to their regular account books. This precise fact of non-numbering on the bill has in fact been admitted by the Manager of the consignor firm before the detaining authority as well as before the penalising officer. The detaining officer found the documents accompanying the vehicle detained to be improper and ingenuine and thus action initiated in terms of the Punjab Act is legal.

The learned counsel for the petitioner in support of its case highlighted the factual aspect that the petitioner firm is a registered dealer at Nalagarh in Himachal Pradesh and was consigner of goods meant for M/s Nahar Spinning Mills, Ludhiana. Central tax on these goods had already been paid by the petitioner as duly mentioned in the documents accompanying the goods carrier. Since factum of Central Excise Duty find duly mentioned in the bill and the fact that the Officer Incharge of Multipurpose Barrier, Dheruwal, certified in this regard i.e. movement of the goods and its place of destination, omission of serial number could not be so construed as doubting the whole transaction. Challenging the authority of the respondents to intercept the truck carrying the goods and the attempt to impose penalty upon the petitioner the counsel urged that no such proceedings could be initiated against him even on reading of Section 14-B(7) of the Punjab Act which could be resorted only if an officer comes to a finding that an attempt has been made to evade tax due under this Act. According to counsel the petitioner is not a dealer under this Act. Whole proceedings initiated by the respondents stands vitiated on this ground alone.

Learned Additional Advocate General, Punjab, has firstly pressed the preliminary objection taken in the written statement i.e. non availing of alternative remedy by the petitioner as provided under the Punjab Act. Referring to the decision of the Supreme Court in case reported as Titaghur Paper Mills Co. Ltd. v. State of Orissa, 53 STC 315, he urged that since statutory remedy is available to the petitioner discretionary remedy under Articles, 226/227 of the Constitution cannot be availed of. Assistant Director (Enforcement) Chandigarh Wing, Punjab, Chandigarh has already imposed a penalty of Rs. 90,000/- u/s 14-B(7) of the Punjab Act vide its order dated 30.10.1993 which order had not been challenged by the petitioner though passed earlier and this way he is clearly guilty of suppressing the true facts and the writ petition is liable to dismissed on this ground alone. Replying on merits the counsel urged that the truck carrying the goods did not carry the correct and complete documents and hence was rightly intercepted by the checking staff. Not only this, subsequent inquiry conducted by the authority pursuance to the detention of the goods brought out the other infirmities duly noticed by the Assistant Director (Enforcement) in its order dated 30.10.1993.

We have heard the respective counsel for the parties and perused the relevant material referred to during the course of arguments. Taxation Inspector Sales Tax Barrier, Ghanauli, on perusing the documents came to a prima facie conclusion that the consignment did not carry along with it proper and genuine documents especially the fact that the bill produced did not bear any serial number as required under Rule 55-A of the Punjab General Sales Tax Rules, 1949, Moreover, the transaction was on credit. It was also noticed that almost half of the year was out, yet it was the first transaction during the year 1993-94. Keeping in view these facts a show cause notice was issued and the petitioner was directed to put in appearance and file reply. The matter was examined in detail by the Assistant Director (Enforcement) afresh who too has highlighted the various infirmities in the documents accompanying the goods carrier. This officer has come to a specific conclusion that the petitioner has failed to produce form ST-XXIV and event the sale bill has not been genuinely issued. According to the Assistant Director (Enforcement) the modus-operandi is to prepare bill books which is not duly numbered, get clearance of Central Excise Department and obtain Form GP-I from them. Not only this, it has been found as a fact that subsequently the bills so drawn are cancelled and this way form GP-T is surrendered back to the Central Excise Department. Keeping this and other numerous infirmities noticed by the Assistant Director (Enforcement) vide order dated 30.10.1993, Annexure P-9 in view, we are of the view that remedy to get rid of the contentious issue by filing a writ petition is wholly misconceived. Lest any observation made by this Court may not prejudice the case of the petitioner in any manner, we leave it to the petitioner to challenge the correctness of the order Annexure P-9 dated October 30, 1993 by way of appeal/revision as may be permissible under the Act. Since it is not clear from the order dated October 30, 1993 whether the same was passed in the presence of the petitioner or his counsel, time spent in this Court be excluded to determine the period of limitation for taking appropriate remedy under the Act. No order as to costs.