Calcutta Iron Merchants Association & Anr
Vs. Commissioner of Commercial Taxes & Anr  INSC 310 (23 February 1996)
Reddy, B.P. (J) Jeevan Reddy, B.P. (J) Paripoornan, K.S.(J)
JT 1996 (5) 563 1996 SCALE (2)726
O R D E
counsel for the parties.
4B of the Bengal Finance (Sales lax) Act, 1941 says:
person shall transport from any railway stations steamer station, airport, post
office, or any other place whether of similar nature or otherwise, notified in
this behalf by the State Government, any consignment of any notified goods
exceeding such quantities and except in accordance with such conditions as may
conditions shall be made with a view to ensuring that there is no evasion of
tax by this Act." Sub-section (2) empowers the State Government to
prescribe the conditions for regulating transport of notified goods from any
places other than those referred to in sub-section (1) with a view to ensuring
that there is no evasion of tax imposed by this Act.
to the above provisions, rules have been made by the State Government. Rule 89A
and in particular sub-rule (2) thereof is relevant for our purpose It reads:
Where such contingent is despatched from any place within West Bengal and the
value whereof exceeds rupees twenty five thousand-- (a) any person transporting
such consignment shall carry with him a consignment note or delivery notes sale
bill or cash memo or similar document and a written declaration in duplicate
duly signed by the consignor or his authorized agent in the form mentioned in
the Schedule appended to this sub-rule in respect of such consignments and
shall, on demand by the officer referred to in the proviso to sub- rule (1) of
Rule 70A, produce the said documents and declaration and the said officers on
being satisfied about the correctness of the documents and the declaration,
shall only allow the movement of such quantity of notified goods mentioned in
that declaration and conforming to the description give therein and to other
documents produced He shall retain one copy of the declaration and return the
second copy on which he shall endorse the date on which the consignment is
transported and shall sign, seal and date such endorsement;
the declaration referred to in clause (a) in respect of any consignment has
already been submitted to an officer referred to in the proviso sub-rule (1) of
rule 70A any person transporting such consignment shall, on demand by such
officer at any subsequent place, produce the countersigned and sealed copy of
the aforesaid declaration.
S C H
E D U L E - - - - - - - - Declaration ----------- Declaration Na.......
declare that the following consignment of notified goods is despatched from a
place within West
Name and address of the consignor
Name and address of the consignee.
Registration Certificate No. of the consignee (if registered or certified under
any of the Sales Tax Acts).
Place of despatch.
Description of consignment
Consignor's Bill/Cash Memo/other document (specify) No. and date
Consignment or Delivery Note No. and date.
declare that I/We hold/do not hold Registration Certificate/Certificate
the Bengal Finance (Sales Tax) Act, 1941/West Bengal Sales TAX. Act, 1954.
have/have not manufactured the goods in West Bengal/not transported the goods
from outside West
above statements are true to the best of my/our Knowledge and belief. status of
the declarant Signature N.B. (1) This declaration should bear a consecutive
issue number of the office of the consignor giving the declaration and a true
copy of the same should be retained by him.
Strike out words or phrase not applicable. [Inserted by Notification No.1863
F.T dated 25.4.1985 w.e.f. 1.5.1985]" According to clause (a) of sub-rule
(2), a person transporting goods shall carry with him three sets of documents,
viz.,(i) consignment note or delivery note (ii) sale bill or cash memo or
similar document and (iii) a written declaration in duplicate duly signed by
the consignor or his authorized agent in the form mentioned in the Schedule to
the sub-rule in respect of such consignment.
documents are required to be produced by such transporter on demand by any
appropriate officer. The declaration form contained in the sub-rule says that
the declaration has to be signed by the consignor or his authorized agent and
shall contain the specified particulars. It is this declaration which along
with other prescribed documents, a person transporting such goods has to
produce as and when demanded by the appropriate officer.
concerned herein with persons who are dealers in iron and steel. Their case is
this: Iron and steel is taxable at the first point of sale. Iron and steel is
manufactured by major manufacturing units. When they sell the same, they pay
tax thereon. The appellants are only purchasers and they transport goods
purchased by them in the course of their business. They complain that under the
rules, an obligation is placed only upon the purchasers/transporters to be in
possession of the aforementioned three sets of documents and to produce them
whenever demanded by the appropriate officer but no such obligation is placed
upon the sellers/consignors.
the sellers are not issuing the declarations as contemplated by Rule 89A(2).
The appellants ares therefore, not in a position to produce the declaration
when demanded by the authorities, on which account they are being to harassment
and financial loss.
Rao, learned counsel for the appellants, reiterates the grievance that the rule
which does not place an obligation upon the soller/consignor of the goods to
issue the aforesaid written declaration in the prescribed form but places an
obligation upon the consignee/purchaser to carry it, is unreasonable and
oppressive. We do not think this grievance is well-founded. The Rule squarely
places an obligation upon the consignor to issue a written declaration in
duplicate in the prescribed forms signed by him or by his authorized agent. The
rule places a statutory obligation upon the consignor/vendor to issue and the
consignee/purchasers to carry the declaration Form. All this is meant to check
and prevent evasion of Sale Tax and no dealer can make any legitimate grievance
therefore, dispose of this appeal with the above directions/clarifications.
also clarify that the direction made by the Tribunal in Paragraph 16 of its
judgment to the effect "We, however, like to direct that where a
transporter or consignee fails to produce a written declaration as required by
rule 89A(2), he should be allowed to establish that he had demanded such a
declaration from the selling dealer or the consignor, but the latter did not
issue or refused to issue the same. If the appropriate authority is satisfied
that the transporter or consignee had, in fact, not negligent in the matter,
and the consignor or selling dealer had not issued or refused to issue the
declaration, inspite of request for the same, there should be neither any
seizure of Iron and Steel declared goods nor imposition of penalty on the sole
ground that the declaration has not been produced in terms of rule 89A(2)"
- is not only impractical but is also likely to lead to several complications.
In any event, in the light of the clarification made by us with respect to the
meaning and purport of rule 89A(2), the above direction becomes unnecessary and
is accordingly deleted.
appeal is disposed of accordingly. No costs.