Green Carriers & Contractors ... vs Commissioner Of Sales Tax And Anr.
1995 Latest Caselaw 619 Del

JUDGMENT

M.K. Sharma, J.

(1) In this writ petition under Article 226 of the Constitution of India the petition has challenged the order dated 24-3-1994 detaining 2 trucks hired by the petitioner namely :-truck No. DL-IG-5605 and truck No. RNY-715 and also the order dated 5-4-1994 passed by the Sales Tax Officer (Enforcement), respondent No. 2 imposing sales tax amounting to Rs. 55,839.00 and also for a direction to the respondents to refund the aforesaid sales tax amount recovered from petitioner along with interest and to pay damages/compensation for illegally detaining the said two trucks for 12 days.

(2) The petitioner carries on the business of. transporting goods in trucks on hire basis to various places in: India. On 22-3-1994 the pettioner booked goods of various consignors for transportation from Surat to Delhi and for the said purpose hired two trucks from other transporters being truck No. DL-IG-5605 and truck No. RNY-715 in which goods were brought from Surat to Delhi comprising about 200 packets in all for delivery of the said goods to the respective consignees.

(3) On the night intervening 24-3-1994 and 25-3-1994 the. Sales Tax Officer (Enforcement) Along with Enforcement staff of the Sales Tax Department came to the registered office of the petitioner and took away the aforesaid two trucks which were standing outside the registered office of the petitioner at Mori Gate, to the Sales Tax Office at Vikas Bhawan, New Delhi. In the said office the respondent No. 2 served a detainment order which is impugned in the present writ petition in respect of both the trucks. On learning that the trucks had been detained by the respondents the petitioner through its employee, Shri Anil Gupta applied to the Deputy Com missioner sales tax vide application dated .25-3-1994 requesting him to release the trues as they were containing mainly cloth, was exempt .from Sales Tax: On 31-3-1994.the petitioner's representative was however, told orally by respondent No. 2 that the trucks Along with the goods' would be released only after the petitioner deposit an amount of Rs. 24,381.00 in respect of parcel containing zari in truck No...DL-1G-5605 and in amount of Rs. 31,458 in respect of parcles containing 'zari' in truck No. RNY- 715. Being precariously placed thus, the petitioner was forced to deposit an amount of Rs. 55,839.00 as' orally told by respondent No. 2. The challans evidencing such payment of the aforesaid amount are annexed with the writ petition by the petitioner. After such payment having been made by the petitioners the said trucks were released on 5-4-1994 after having been detained since 25-3-1994 i.e. for more than 12 -days.

(4) The learned counsel appearing for the petitioner submitted before us that the respondents have no power under the provisions of Delhi Sales Tax'Act to detain the truck hired by the petitioner who' is a transporter and is merely carrying goods consigned by the consignors from other States in Delhi. It is further submitted that the respondents do not have any power under the provisions of Delhi Sales Tax Act to detain even the goods. which are exempt from Sales Tax and which are brought into Delhi. The further submission of the learned counsel appearing for the petitioner is that, the respondents have no power under the provisions of Delhi Sales Tax Act to impose any sales tax on the petitioner who is merely a transporter and is not engaged in sale or purchase of goods and is not a 'dealer' and at the most the respondent could have resorted 'to the provisions of Section 64(5) of Delhi Sales Tax Act, 1975 and asked the petitioner to furnish to the satisfaction of the concerned officer security for the amount of tax payable, if such goods were sold in Delhi and .could not have recovered tax from the petitioner, who is not a dealer within the ambit of the provisions of Delhi Sales Tax Act.

(5) The law regulating levy and recovery of tax on sale of goods' in the Union Territory of Delhi is governed and regulated by the provisions of Delhi Sales Tax Act, 1975 (hereinafter called the Act . Section 2(e) defines a 'dealer' as follows :- "Dealer" means any person who carries on business of selling, goods in .Delhi and includes ;- (i) the Central Government or a State Government carrying on such easiness ; 451 Commissioner of Sales Tax and another (ii) an. incorporated, society(includeing a co-operative society), club or association which sells or supplies goods,, whether or not in the course of business, to its members for cash or for deferred payment or for commission, remuneration or other valuable consideration; (iii) a manager, factor, broker, commission agent, del credere agent, or any mercantile agent, by whatever name called, and whether of the same description as hereinbefore mentioned or not, who sells goods belonging to any principal whether disclosed or nut; and (iv) an auctioneer who sells or auctions goods belonging to any principal, whether .disclosed or not and whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of the principal;" Again section 2(1) defines 'sales' as follows :- "Sale", with its grammatical variations and cognates expressions, means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration, and includes- (i) a transfer of goods on hire-purchase or other system of payment by Installments, but does not include a mortgage or hypothecation of or a charge or pledge on goods; - (ii) supply of goods by a society (including a co-operative society), club, firm or any association to its members for cash or for deferred payment, or for commission, remuneration or other valuable consideration whether or not in the course of business; and (iii) transfer of goods by an auctioneer, referred to in subclause (iv) of clause (e); In order to appreciate the contention of the learned counsel appearing for the parties it is also necessary to set out the provisions of Section 64 of the Act which is as hereunder:- Section 64.--Setting up of check posts and barriers.-(1) The Administrator may, by notification in the Official Gazette, set up check-posts or barriers or both, at any place in Delhi with a view to preventing evasion of tax and other dues payable under this Act. (2) The owner or person in charge of a goods vehicle shall carry with him a goods vehicle record, a trip sheet or a log book, as the case may be and a bill of sale or a delivery note containing such particulars as may be prescribed in respect of the goods carried in the goods vehicle and produce the same before any officer in charge of a checkpost or barrier or any other officer as may be empowered by the Administrator in this behalf. (3) The owner or person in charge of a goods vehicle entering or leaving Delhi shall also file a declaration containing such particulars in the prescribed form obtainable from the prescribed authority and in such manner as may be prescribed, before the officer in charge of a checkpost or barrier or before the other officer empowered as aforesaid: Provided that where the owner or person in charge of a goods vehicle after filing a declaration at the time of entering Delhi that the goods are meant to be carried to a place outside Delhi, fails, without reasonable cause, to carry such goods outside, Delhi within the prescribed period, he shall, in addition to the payment of tax, if any, be liable to a penalty not exceeding two and a half times that tax that would have been payable had the goods been sold inside Delhi or one thousand rupees, whichever is more. (4) At every check-post or barrier, or at any other place when, so required by an officer empowered by the Administrator in this behalf, the driver or any other person in charge of a goods vehicle shall stop the vehicle and keep it stationary so long as may be required by the officer in charge of the check-post or barrier or the officer empowered as aforesaid to search the goods vehicle or part thereof, examine the contents therein and inspect all records relating to the goods, carried, which are in the possession of such driver or other person in charge,. who shall, if so required, give his name and address and the name and address of the owner of the vehicle as well as those of the consignor and consignee of the goods. (5) If on an examination of the contents in a goods vehicle or the inspection of records relating to the goods carried, any officer empowered by the Administrator in this behalf has reason to believe that the owner or person in charge of such goods vehicle is attempting to evade payment of any tax due under this Act, he may, for reasons to be Commissioner of Sales Tax and other recorded in writing and after hearing the owner or person in charge of the goods vehicle, detain the goods and the goods so denied shall not be allowed to be transported unless the owner, or his agent or the person in-charge of the goods vehicle furnishes to the satisfaction of such officer security in such form and in such manner as may be prescribed for an amount not exceeding one thousand rupees or the amount of tax payable if such goods were sold in Delhi, whichever, is more.

(6) With regard to the first submission -of the learned counsel for section (5) is not furnished within the prescribed period such goods shall be disposed of in such manner and subject to such conditions as may be prescribed. Explanation.-For the purposes of this section, "goods vehicle" shall include a motor vehicle, vessel, boat, animal & any other form of conveyance." 6. With regard to the first submission of the learned counsel for the petitioner to the effect that the respondents have no power and jurisdiction under .the provisions of Delhi Sales Tax Act to detain the trucks of the petitioner who is a transporter and is merely carrying goods consigned by the consignors from Other Status to Delhi, we may refer the provisions of Section 64 which are quoted herein above, which empower the concerned authorities to detain the goods only carried through trucks either by the transporter or by a dealer. However, no such power is vested under the aforesaid provisions of the Act to detain a truck after the inspection had been carried out. The only power that is vested in the concerned authority is that as and when an opinion is formed by the concerned officer that the owner or person in charge of such goods/vehicle is attempting to evade payment of the tax due under the Act he might for reasons to be recorded in writing and after hearing the owner or person in charge of the goods/Vehicle detain the goods and the goods so detained shall not be allowed to be transported unless the owner or his agent or the person in-charge of the goods/vehicle furnishes to the satisfaction of such Officers security in such form and in such manner as may be prescribed for an amount not exceeding one thousand rupees or the amount of tax payable if such goods were sold in Delhi, whichever is more.

(7) In view of the aforesaid provisions we are of the opinion that "the respondents are not entitled to detain the track but were entitled to detain such goods, which according to the concerned officer, were being transported in order to evade tax under the provisions of the Act." However, as submitted by the learned counsel for the petitioner, we cannot hold in the instant case that the respondents were not entitled to detain the goods carried by the two trucks inasmuch as a part. of the said goods as is disclosed from the records of the case contained 'zari' which is a taxable item @ 7%. We may state here that zari is not included in the list of tax-free goods nor mentioned in any other schedule mentioning the rate of tax and accordingly the said item in our opinion would fall under the general category and is taxable @ 7% under the Act. In view of the aforesaid factual position the officer empowered under the provisions of the Act had the power and jurisdiction to detain the goods as in the opinion of the said officer the owner or person in-charge of such goods vehicles was attempting to evade payment of the tax under the provisions of the Act. The said satisfaction is disclosed from the note sheet of the original records which were produced for our perusal by the learned counsel for the respondents.

(8) On perusal of the records we find that without any conclusive finding and evidence on record the Deputy Commissioner, Sales Tax (Enforcement) treated the petitioner company as a 'dealer' although the petitioner claimed itself to be transporter of the goods only. The note sheet of the records of the case placed before us clearly shows non-application of mind by the respondents as they proceeded to jump to the conclusion that the petitioner company is a 'dealer' and that the trucks could be released only on payment of tax and composition fee. Even to our astonishment we find that the Commissioner of Sales Tax by his order dated 30-3-1994 has recorded in the note-sheet as follows:- ''If the vehicle has to be released our tax and composition fee must come first by 31-3-1994 preferably- No tax, no release. Let me know results."

from the aforesaid order of the Commissioner of Sales Tax, it appears that instead of applying his judicious mind to the facts and circumstances of the ease, he was more concerned to realise tax from the petitioner itself by 31-3-1994 preferably as that was the end of the financial year. The aforesaid action as revealed from the aforesaid order appears to have been done primarily to show collection of tax by the end of the financial year and not in order to do justice and to take action in accordance with law. It is indeed unfortunate that such hasty action came to be taken in the instant case without due application of mind by the respondents.

(9) From the perusal of the aforesaid records however, we do not find that the respondents have' arrived at a categorical finding on discussion of materials on record that the petitioner is a dealer' within the meaning and ambit of the word ^dealer' as defined under the provisions of the' Act. There is no application of 'mind of the respondent on the Issue -holding the-petitioner as 'dealer 'under the provisions of the Act. In the absence of any categorical finding, on Commissioner of Sales Tax appreciation of evidence on record in that regard the respondents could not have held the petitioner as a 'dealer' in the instant case and therefore, no such tax could have been levied on the petitioner.

(10) Section 64(5) of the Act however, empowers the respondents to detain the goods after a satisfaction has been arrived at that the owner or person in charge of the goods vehicle is attempting to evade payment of tax due under the Act- In the present case, as is disclosed from the records of the case, we find that reasons have been recorded by the officer empowered in that regard about his satisfaction and the same having not been challenged 'Defore us by the learned counsel appearing for the petitioner, we are satisfied that the respondents arc entitled to detain such goods, which is Zari in the present case, which is taxable under the Delhi Sales Tax Act.

(11) On careful consideration of the aforesaid provisions of Section 64(5) we however, feel that the respondents in the present case were only entitled to detain the goods 'Zari' carried by the aforesaid two goods vehicle as in the opinion of the respondent No. 2 there was reason to believe that the owner or person in charge of the said two goods vehicles were attempting to evade payment of the tax due under the provisions of the Act. Acting under the aforesaid provision of law, the respondents were further entitled not to allow the aforesaid goods namely 'Zari' in the instant case, which was detained from being transported out unless the owner or his agent or the person in charge of the aforesaid 2 goods vehicles furnishes , the satisfaction of the respondent No. 2 or any such officer empowered under the provisions of the Act, security in such form and in such manner for an amount up to the amount of tax payable.

(12) In the aforesaid view of the matter, we find that the actions taken by the respondents in the instant case for realisation of tax from the petitioner are without jurisdiction and beyond the provisions of the Act. We are however, of the opinion that the respondents were entitled to de ain the zari in question as according to the concerned officer it is a taxable item and no tax was paid for it. We also hold that the said goods namely 'Zari' should have been allowed to be transported by the respondents by taking security equal to the amount of tax payable, from the owner or the agent or the person in charge of the said goods vehicles.

(13) We may mention here that the learned counsel appearing for the respondents raised a preliminary objection before us that since an alternative efficacious remedy is available to the petitioner by way of an appeal to the Appellate Authority the present writ petition is not maintainable.

(14) We have given our anxious consideration to the submissions made by the learned counsel However, on the facts and circumstances of the case we cannot accept the aforesaid submission of the learned counsel for the respondents. It is of course true that the writs of mandamus, certiorari and prohibition and for that matter all the five prerogative writs are ordinarily not issued where there exists an alternative remedy equally efficacious and adequate. However, there is no inflexible rule that such writs cannot be issued where the court thinks it just and convenient to do so. It is well established that an alternative remedy is not an absolute bar to the maintainability of a writ petition. In this connection we may appropriately refer to the decision in Dr. Smt. Kuntesh Gupta Vs. Management of Hindu Kanya Mahavidyalaya, Sitapur; , wherein it has been held that when an authority has acted wholly without jurisdiction the High Court should not refuse to exercise its jurisdiction under Article 226 of the Constitution on the ground of existence of an alternative remedy. Following the ratio of the aforesaid decision of the Supreme Court and as we have found in the instant case that the respondents in the instant case have acted absolutely without jurisdiction as has been elucidated herein before, we are not inclined to relegate the petitioner to take resort to the alternative remedy and to file an appeal before the statutory authority, as no dispute with regard to the facts is also involved in the present case. Accordingly, the preliminary objection raised by the respondents is rejected.

(15) In the result, we set aside and quash the orders dated 5-4-1994 passed by respondent No. 2 Realizing tax from the petitioner company and direct that the amount so realised as tax from the petitioner be refunded with 12% interest from the date of its realisation to the date of payment. We however, make it clear that before making the aforesaid payment, the respondents shall be entitled to direct the petitioner company to furnish security within three weeks to the satisfaction of the respondent No. 2 for an amount equal to the amount of tax payable in the instant case in accordance with the provisions of Section 64(5) of the Act and on furnishing such security the amount shall be paid to the petitioner is directed hereinabove. If however, the petitioner fails to furnish such security within three weeks, the amount by the respondents as sales tax in the instant case could be retained as security as provided for under Section 64(5) of the Act and in that case the amount awarded as interest shall be paid to the petitioner. With the aforesaid observations and directions this writ petition is allowed to the extent indicated above with costs which we assess at Rs. 5,000 to be paid by the respondents to the petitioner.