A.P.Misra, J. - (1.) The petitioner is a partnership firm engaged in the manufacture and export of a variety of items, including, inter alia, scarves. According to the petitioner one of the raw material used in the manufacture of the said scarve is metallic polyester yarn. These yarns were imported by the petitioner from Japan for which advance licence was obtained and after manufacture of the scarves they are exported outside India. The petitioner by means of the present writ petition has challenged the seizure order dated 4th December, 1985 (annexure 10, and the order dated 21st December, 1985 (annexure 12), passed by the Assistant Commissioner (Check Post), Sales Tax, Ghaziabad. The seizure was made according to the respondents for violation of the provisions of Sections 13-A and 28-A of the U.P. Sales Tax Act, 1948. The said impugned order directed the petitioner for furnishing of security to the tune of 40 per cent of the value of the goods seized for its release.
(2.) The petitioner's contention was that the said order is bad as there was no sale made by the petitioner within the State of U.P. and as it was meant for export outside India, the seizure itself is illegal and demand of security to the tune of 40 per cent is also bad on that account. The learned Counsel for the petitioner vehemently urged that unless there was sale made by the petitioner the power of seizure cannot be exercised by the respondents. It was further contended that the aforesaid goods were brought in the State of U.P. only for storage purposes and it was not for any business. Section 28-A has been reframed by U.P. Act No. 33 of 1979, which would be relevant for the purposes of the present case.
(3.) Section 28-A (1) of the Act uses the words "Any person (hereinafter in this section referred to as the importer) who intends to bring, import or otherwise receive, into the State from any place without the State, any goods liable to tax under this Act...in connection with the business, shall obtain the prescribed form of declaration on payment of the prescribed fee from the assessing authority having jurisdiction over the area, where his principal place of business is situated or, in case there is no such place where he ordinarily resides." This section makes it clear that any person who either imports, brings or receives any goods liable to tax under this provision exceeding the quantity and value of the goods mentioned therein must obtain the prescribed forms and declaration on payment of prescribed fees. It is not in dispute in the present case that the prescribed form of declaration has not been obtained by the petitioner, when the goods were brought in the State of U.P. from outside U.P. Under Sub-section (1) of Section 28-A there are three essential ingredients, namely, that any person referred to in Section 28-A must bring, import or receive within the State any goods which were brought from outside the State, secondly, such goods must under the law of the State of U.P. be liable to tax, and, thirdly, it must be in connection with the business. If all these ingredients are in existence then he must obtain the declaration in the prescribed form. In the present case, it is not in dispute that the goods were brought from outside the State of U.P. and such goods were liable to tax under this Act and were kept in the State of U.P. which was in connection with the business. It is significant here to point out Sub-section (6) of Section 28-A. Under Section 28-A(6) of the Act the officer making the search or making inspection shall also record his reasons after giving opportunity that such goods were transported in an attempt to evade the assessment or payment of tax due or likely to be due under this Act then he shall order detention of such goods. Thus, the section has taken care that the goods shall not be detained, only in the absence of the requisite document referred to in the section unless he is further satisfied that the action was to evade the payment of tax due or likely to be due under this Act. The argument of the learned Counsel for the petitioner that the power of seizure cannot be exercised unless there is proof of sale is misconceived in law. For this reliance was placed in the case of Sales Tax Officer, Navgaon v. Timber & Fuel Corporation, Orchha District, Tikamgarh [1973] 31 STC 585 (SC); AIR 1973 SC 2350. Reference was made to paragraphs 4 and 5 of this judgment. In that case, there was a forest contractor, a registered dealer of M.P., and they purchased large number of timber in an auction held by the Forest Department of Madhya Pradesh and some parts of the said timber were transferred to U.P. and the remaining were sold in Madhya Pradesh. The assessing authority held not only what was sold in the Madhya Pradesh but what was transferred by the assessee to the State of U.P. amounted to sale. It was on these facts the Supreme Court held that merely transfer of goods by the owner from one place to another cannot amount to sale under the provisions of the Madhya Pradesh Sales Tax Act. In that case, it was the assessment proceedings under which it was held not to be sale. The facts in this case are entirely different. Here the question whether there was sale or not is not relevant at the stage of seizure. If a person merely transfers or transports goods with a view to evade tax where such goods are likely to be taxed under the Act the power of seizure has been provided. This provision empowers the Revenue to check all possible evasions. When section uses the words "likely to be taxed", this itself conceived of stage prior to the sale. When sale actually takes place then question of likely to be due could not be there. In view of this, the foundation of the argument of the counsel for the petitioner basing on the aforesaid decision of the Supreme Court do not find any legs to be sustained. In that Supreme Court case, the question if it is a sale or not was directly involved and it was in assessment proceedings while present is the case of seizure, which generally is a stage before the assessment.;