- (1.) THE petitioner, a transporter of goods was transporting a consignment of steel casting machines valued at about Rs.79 Lakhs booked at Ballabhgarh, Faridabad, Haryana to BHEL, a government of India Enterprizes, Haridwar, State of Uttarakhand. The aforesaid consignment was intercepted on 5th of July, 2011 by the Assistant Commissioner, Mobile Squad, Commercial Tax, NOIDA within the state of Uttar Pradesh on the ground that the aforesaid consignment was not accompanied with down loaded transit declaration form as prescribed by the Commissioner, Commercial Tax, U.P. vide its circular No.552 dated 30th of July, 2009. A show cause notice was issued to the petitioner which was replied. The reply was not found satisfactory. The Joint Commissioner, Commercial Tax, SIB, NOIDA upheld the seizure order and directed the release of the goods on furnishing the security to the extent of 15% of the value of the goods in cash and 25% in the form of bank guarantee by the order dated 15th of July, 2011. The matter was carried unsuccessfully before the Commercial Tax Tribunal, NOIDA. The case of the petitioner is that section 52 of the U.P. Value Added Tax Act (herein after referred to as the Act) as it now exists, does not require the carrying of any such declaration form issued by the Commissioner, Commercial Tax, U.P. In other words, any such form prescribed by the the Commissioner, Commercial Tax, U.P. is illegal as the the Commissioner, Commercial Tax, U.P. is not authorized under the said Act or Rules to prescribe any such form. Such form could be prescribed by State Government through Rules and it could not delegate the power to the Commissioner. The prescription of form by the Commissioner suffers with the vice of excess delegation of power by the State Government who being the delegatee cannot further delegate its power to the the Commissioner, Commercial Tax, U.P. By means of the above writ petition, the following reliefs have been sought for: - (i) to issue a writ, order or direction in the nature of certiorari, quashing the Rule -58 of the U.P. Value Added Tax Rules in so far as it authorized the Commissioner, Commercial Tax, U.P., Lucknow to prescribe documents and procedure in respect of transit of goods by road through the State. (ii). to issue a writ, order or direction in the nature of certiorari, quashing the circular letter dated 30.7.09 issued by the Commissioner, Commercial Tax, U.P., Lucknow (respondent no.2) (Annexure -2 to the writ petition). (iii). to issue a writ, order or direction, in the nature of certiorari, quashing the order dated 28.7.11 passed by the respondent no.3 in so far as it upheld the order of seizure of goods and directed furnishing of security for obtaining release of the goods. (iv). to issue a writ, order or direction, in the nature of certiorari, quashing the order of seizure of goods dated 12.7.11 passed by the respondent no.4 (Annexure -5 to the writ petition). (v). to issue a writ, order or direction, in the nature of mandamus directing the respondent no.4 to release the goods of the petitioner forthwith without furnishing any security in respect thereof. (vi). to issue any other writ or order which this Hon'ble Court may deem fit and proper in the circumstances of the case. A n d (vii). to award the cost of the petition to the petitioner. In the counter affidavit, the prescription of form by the the Commissioner, Commercial Tax, U.P. has been sought to be justified. Heard Sri Kunwar Saxena along with Sri N.C. Gupta, learned counsel for the petitioner and Sri Vishnu Pratap, learned standing counsel for the respondents. The learned counsel for the petitioner submitted that section 79 of the Act authorizes the State Government to make Rules to carry out the purposes of the Act. By laying emphasis on sub section (2) (f) of section 79, the submission is that it is the State Government who is required to prescribe the form. The power having been delegated to the State Government to prescribe the form, the State Government could not further delegate its power to the Commissioner, Commercial Taxes and if there is any such delegation it suffers with the vice of the doctrine known as "Delegatus Non Potest Delegare". In the alternative remedy, he submitted that when a thing is required to be done in a particular manner it should be done in that manner only. Apart from the above, the arguments on the merit of the case were also advanced.
(2.) ON the basis of the respective arguments of the learned counsel for the parties, the following three points fall for our determination: - 1. Whether the Commissioner, Commercial Tax, U.P. has exceeded in its power to prescribe a transit declaration form which must accompany with the goods passing through the State of U.P. coming from and going outside the State of U.P., in view of the scheme of the Act? In other words, the prescription of such form by the Commissioner amounts to further delegation of power by the State Government, the delegatee, to the Commissioner. 2. Whether the theory that when a thing is required to be done in a particular manner, should be done in that manner or not at all is attracted to the controversy on hand? 3. Whether the impugned orders passed by the authorities below including the Commercial Tax Tribunal on merits is sustainable? POINT No.1 The Court was taken through the various sections including the definition clauses and the rules framed thereunder of the Act. Reference was made to the following provisions: - Section 2(j) "document" means any matter expressed or described upon any substance by means of letters, figures or marks, or by more than one of those means, intended to be used, or which may be used for the purpose of recording that matter and includes - - (i) an electronic document including data, record or data generated, image or sound stored, received or sent in an electronic form or micro film or computer generated micro fiche; and (ii) such other document as may be notified by the State Government. Section 52. Provision for goods passing through the State - -When a vehicle coming from any place outside the State and bound for any other place outside the State and carrying goods referred to in sub -section (1) of section 52, passes through the State, the driver or other person in charge of such vehicle shall carry such documents as may be prescribed failing which it shall be presumed that the goods carried thereby are meant for sale within the State by the owner or person in charge of the vehicle. Section 79. Power to make rules - -(1) The State Government may make rules to carry out the purpose of this Act. (2) In particular and without prejudice to the generality of the foregoing powers, such rules may provide for, - - (a) all matters expressly required or allowed by this Act to be prescribed; (b) the registration of persons engaged in the sales or purchase of goods and the imposing of condition in respect of the sale for the purpose of enforcing the provisions of this Act; (c) the determination of the turnover for the purpose of assessment of tax under this Act; (d) compelling the submission of tax returns and the production of documents and enforcing the attendance of a person and examining them on oath or affirmation; (e) the appointment, duties and powers of the officers appointed for the purpose of enforcing the provisions of this Act; (f) generally regulating the procedure to be followed and the forms to be adopted in proceedings under this Act; (g) refunds of amounts deposited under sub -section (1) of section 40 or 41, the procedure for such refunds and the period within which they may be made ; (h) the custody of the goods seized under this Act; and (i) the matters which are to be or may be prescribed. (i) the matters which are to be or may be prescribed. (3) The power to make rules conferred by this section shall be subject to condition of the rules being made after previous publication for a period of not less than four weeks : Provided that if the State Government is satisfied that circumstances exist which render it necessary for it to take immediate action, it may make any rule without such previous publication. (4) All rules made under this section shall be published in the Gazette and upon such publication shall have effect immediately as if enacted in this Act. Rules: - 2(m) "Form" means a form appended to these rules, Rule -4 Authorities under the Act - -(1) Authorities mentioned in column (2) shall be under the superintendence and administrative control of the authorities mentioned in column (3) of the table below: - Sl. No. Authorities Superintendence and control 1 2 3 (1) Chairman of Settlement Commission, President Tribunal and Commissioner The State Government (2) Members of Tribunal President of Tribunal (3) Member of Settlement Commission Chairman of Settlement Commission (4) Registrar of Tribunal President Tribunal (5) Registrar of Settlement Commission Chairman of Settlement Commission, (6) Special Commissioner, Additional Commissioner and Joint Commissioner and all other Officers Commissioner (2) The Settlement Commission, President of Tribunal at Commissioner shall have jurisdiction over whole of the State. (3) The Chairman and members of the Settlement Commission shall exercise powers and perform the functions assigned to them under section 65 of the Act and rules framed there under. (4) President and members of the Tribunal shall exercise the powers and perform the duties assigned to them under section 57 and rules framed there under. (5) The Commissioner shall exercise the powers and perform the duties assigned to him under the Act and the rules framed there under and shall have all powers exercisable by subordinate authorities other than the appellate authority under section 55. (6) The Commissioner may issue instructions consistent with the provisions of the Act and the rules made there under to his subordinate officers, generally regulating the procedure to be followed in carrying out the provisions of the Act or the rules made thereunder. Rule -77. Forms prescribed under the rules - -Notwithstanding anything to the contrary contained in these rules Form prescribed under the Uttar Pradesh Trade Tax Rules, 1948 and mentioned in column (2) of the table, with suitable amendments on them, may be used in place of form prescribed under these rules and mentioned against each of them in column (3) of the table below till new form is substituted: Form under the Uttar Pradesh Trade Tax Rules, 1948 Form under the Uttar Pradesh Value Added Tax Act, 2008 Description of forms (1) (2) (3) Form I Form I Treasury Challan Form VI Form XXVIII Notice of Demand Form XIII Form III Treasury Verification Statement Form XLIX Form XXI Transport Memo Form XVI Form XXXVII Summon to appear in person and for documents Form of declaration for import Form XXXVIII Form of declaration for import for registered dealers Form XXXII Form XXXIX Declaration for import for other than registered dealers Form XXXIII Form XLIV Application for declaration for import for other than registered dealers Form XXXIV Form XLIII Application for transit authorization Rule -78. Use of print out of forms available on the website - -(1) Dealers may, for use by them, take print outs of forms specified from time to time by the Commissioner from the Website of the Commercial Tax Department of the Government of Uttar Pradesh: (2) For taking print outs, A4 size paper will be used. (3) Expression "Web Site of the Commercial Tax Department of Government of Uttar Pradesh" refers the World Wide Web having domain "up.nic.in" and with address "http://comtax.up.nic.in" The main thrust of the argument of petitioner is that section 52 is a provision with regard to the goods passing through the State of U.P. It provides that when a vehicle coming from any place outside the State and bound for any other place outside the State carrying on the goods referable to section 52(1) passes through the State of U.P., the driver or the person in charge of such vehicle shall carry such documents as may be prescribed, failing which a rebuttal presumption that the goods carried thereby have been sold or meant for sale in the State of U.P. shall be available to the department. The submission is that in the light of the section 52 the State Government had issued a form No. XLIII. The said form is referable to Rule 58 (1) of the U.P. VAT Rules, 2008. It is useful to point out that the present section 52 has been substituted by the U.P. Value Added Tax (Third Amendment) Act No.22 of 2009 w.e.f. 27.8.2009. The unamended section 52 is reproduced below: - 52. Issue of authorisation for transit of goods through the State - -When a vehicle coming from any place outside the State and bound for any other place outside the State, and carrying goods referred to in sub -section (1) of section 50, passes through the State, the driver or other person in -charge of such vehicle shall obtain in the prescribed manner an authorisation for transit of goods from the officer in -charge of the first check -post or barrier after his entry into the State and deliver it to the officer in -charge of the last check post or barrier before his exit from the State, failing which it shall be presumed that the goods carried thereby have been sold within the State by the owner or person in -charge of the vehicle : Provided that the goods carried by such vehicle are, after their entry into the State, transported outside the State by any other vehicle or conveyance, the onus of proving that the goods have actually moved out of the State shall be on the owner or person in -charge of the vehicle. Explanation - -For the purpose of this section, the hirer of the vehicle shall also be deemed to be the owner of the vehicle. Word and figures 'Section 50' had been substituted in above by Act No.11 of 2009, w.e.f. 1.1.2008 for 'Section 51'.
(3.) ON a comparative study of section 52 as it existed prior to 27th of August, 2009 after its substitution would show that the amendment in section 52 was necessitated due to the fact that the state legislature took a decision to abolish the check posts and barriers at the entry and exit points of the State of U.P. The origin of the check posts can be traced to the U.P. Sales Tax Act, 1948. Subsequently, it came to be known as the U.P. Trade Tax Act. The Act is successor of the U.P. Trade Tax Act and came to be enforced on 1st of January, 2008. Under the previous legislation i.e. that U.P. Sales Tax Act, the power of the State Legislature to establish entry check post was subject matter of challenge which came up for consideration before the Apex Court in the case of Sodhi Transport Company Vs. State of U.P., 1986 UPTC 721. In this case, the validity of the substituted section 28 of the U.P. Sales Tax Act providing for establishment of check posts and barriers at the boundaries of State and also for inspection of the goods while in transit was challenged. Upholding the validity, the Apex Court held that section 28 authorises the State Government to establish check posts and barriers if so desired with a view to prevent the evasion of tax or the other dues payable by a person under the provisions of the U.P. Sales Tax Act is valid as the provisions are just machinery provisions. They do not levy and charge by themselves. The relevant paragraph is '8' which is reproduced below : - "8. Now the impugned provisions are just machinery provisions. They do not levy any charge by themselves. They are enacted to ensure that there is no evasion of tax. As already observed, the Act is traceable to Entry 54 in List II of the Seventh Schedule to the Constitution which reads thus : 54, Taxes on the sale or purchase of goods other than news papers subject to the provisions of Entry 92 -A of List I*'. it is well -settled that when the Legislature has the power to make a law with respect to any subject it has all the ancillary and incidental powers to make the law effective. Taxation laws usually consist of three parts - -charging provisions, machinery provisions, and provisions providing for recovery of the tax. We may refer here to the observations of Lord Dunedin in Whitney v. Commissioners of Inland Revenue, (1925) 10 T.C. 88 (110). The learned Lord said : "May Lords, I shall now permit my self a general observation. Once that it is fixed that there is liability, it is antecedently highly improbable that the statute should not go on to make that liability effective. A statue is designed to be workable and the interpretation thereof by a Court should be to secure that object, unless crucial omission or clear direction makes that end unattainable. Now there are three stages in the imposition of a tax : there is the declaration of liability, that what persons in respect of what property are liable. Next, there is the assessment. Liability does not depend on assessment. That ex hypothesi, has already been fixed. But assessment particularises the exact sum which a person liable has to pay. Lastly, come the methods of recovery, if the person taxed does not voluntarily pay." ;