SINGHAL, J. - (1.) - This writ petition has been Tiled against the order of the Dy. Commissioner, (Admn) Commercial Taxes Department, dated September 26,1994 by which the goods consigned to the petitioner were directed to be purchased under See. 23-D of the Rajasthan Sales Tax Act, 1954 (hereinafter called as the Act) read with rule 63-B of the Rajasthan Sales Tax Rules, 1955 (hereinafter called as the Rules ).
(2.) THE brief facts of the case are that the petitioner is dealing in Ply Wood and Block Board etc. THE petitioner gave an order to M/s A. T. T. Plywood Industries Pvt. Ltd.-E- 131, Industrial Area, Bhiwadi, Distt. Alwar to send some quantity of Plywood and Block Board of different quality and of different sizes. THE goods were supplied vide bill No. 60 dated August 30, 1994 and were despatched through vehicle No. HR-36-4445 vide GR No. 8638. The consignor has shown the quantity, rate of the commodity and has charged the excise duty. The Rajasthan Sales Tax on the value of 40% has been charged as 60";. of the lax is exempt as per eligibility certificate granted to the consignor being a new unit. When the goods were in transit, they were checked by the Asstt. Commercial Taxes Officer (Flying Squad) on August 31,1994 and he brought the truck to Kar Bhawan for enquiry under Sec. 23-D of the Act. The goods were seized and the delivery thereof was given to the petitioner on supardgi on August 31, 1994 itself. The Dy. Commissioner (Anti-Evasion) Commercial Taxes Department issued a notice to the petitioner under Sec. 23 D of the Act read with rules 55 and 63b of the Rules to appear before him on September 24, l994. In the meantime the enquiry was made by the ACTO (A. E.) and according to his report it was found that it is a matter of under-billing and the value of the goods has not been correctly been stated in the bill. The notice was issued by the Dy. Commissioner (Anti Evasion) on the proposal sent by the ACTO for granting sanction under Scc. 23-I) of (he Act to purchase the goods after addition of 10%. A reply to the said notice was submitted and it was stated that no enquiry was conducted. The petitioner has prayed that the documents and the facts on the basis of which under-billing is alleged may be provided to him. Further prayer was made on September 24,1994 to the Dy. Commissioner that the liability of tax is at first point and therefore so far as the petitioner is concerned the goods are tax- paid and question of any evasion of lax in his hand does not arise. A copy of the preliminary enquiry report or the proposal which was sent by the ACT () to the Dy. Commissioner was not provided to the petitioner. The grievance of the petitioner is that the petitioner should have been given an opportunity and he was not heard either in the preliminary enquiry nor was he given an opportunity and even the copy of proposal sent by the ACTO or the copy of the report was not provided to him while passing the order dated September 26,1994. It is submitted that the order passed by the Dy. Commissioner is without application of mind and is contrary to the principles of natural justice. The arguments of the learned counsel for the parties have been heard. The provisions of Scc. 23-D and rule 63-B read as under - Sec. 23-D "special provisions relating to underbilliiig - Where the Commissioner,. Commercial Taxes,deems it necessary, he may permit or authorise any officer, not below the rank of an Assistant Commercial Taxes Officer or In-Charge, Check-post, to purchase any goods from a dealer at the price payable within the period and the manner as may be prescribed in this behalf, shown in his purchase bill increased by 10% or sale bill, as the case may be. The dealer shall be bound to sell such goods to the officer so permitted or authorised and if he fails or refuses to sell the goods he shall be liable to a penally not exceeding 30% of the offer price of the goods, and such penalty shall be imposed and recovered by such officer in the manner prescribed in this behalf. Rule-63-B- Procedure for purchase of goods relating to under-billing- 1. The Commissioner, Commercial Taxes shall permit or authorise an officer herein after in these rules referred to as the authorised officer, to exercise the powers under Section 231) where it appears to such officer that goods are undervalued in the bill or memo or any other document relating to such goods. 2. The authorised officer exercising the powers under Section 23 D shall serve on the owner or the person who is in immediate possession or Control of such goods a direction to the effect that he shall not remove, part-with or otherwise deal with such goods for a period of one months from the receipt of the direction in writing. The owner or a person in immediate possession or control of such goods may give possession to the authorised officer for the safe custody of such goods and obtain a receipt thereof from the authorised officer. 3 (i) The Authorised Officer shall forward the propose to purchase the goode under Section 23-D of the Act to the Dy. Commissioner (Admn) or Dy. Commissioned All) having administrative control of his Circle of ward or checkpost within 24 hours of the service of the order or directions under sub-rule (2) (ii ). The Dy. Commissioner concerned shall on receipt of the proposal and after giving (he owner of the person in immediate possession or control of the goods an opportunity of being heard and also after holding such enquiry as he may consider fit, either accept or reject the proposal and serve the order of acceptance or rejection on the owner or the person aforesaid. (4) The owner or the person in immediate possession or control of the goods shall sell the goods to the authorised officer on receipt of the order of acceptance under sub-rule (3) (5) The Authorised officer shall within a period of sub-rule (4) make payment of the price of the goods in accordance with the provisions of the Act. "where such payment is not made within the said period the seller shall be entitled to interest @ 12% per annum. (6)If the owner, or the person immediate possession or control of the goods or the dealer to whom the goods belong, neglect, fails to sell the goods, the authorised officer shall after giving an opportunity of being heard, impose penalty under Section 23d. The penalty so imposed shall be payable forthwith and the goods under direction of sub-rule (2) shall be freed or allowed to be removed. " From a perusal of the provisions of Sec-D of the Act it is evident that the Commissioner may permit or authorise any officer not below the rank of ACTO to purchase any goods from a dealer at the price payable within the period and the manner as may be prescribed in this behalf shown in his purchase bill increased by 10%, or-sale bill as the case may be. The power of the Commissioner has been delegated on the Dy. Commissioner and therefore it was the authorisation or permission which is contemplated under Sec. 23-D of the Act the validity of this provision is not in dispute. It has been provided under Sec. 23 D that the dealer shall be bound to sell such goods to the officer so permitted or authorised and if he fails or refuses to sell the goods, he shall be liable to a penalty not exceeding 30 % of the offer price of the goods and such penalty shall be imposed and recovered by such officer in the manner prescribed in this behalf. The validity of similar provision under the Income Tax Act has been upheld by the Apex Court in the case of C. B. Gautam V. Union of India (l ). It was held in that case that the principles of natural justice require that opportunity that opportunity should he given. In view of the aforesaid decision even before giving the permission or authorising an officer to purchase the goods it was the requirement of the principles of natural justice that the assessee should have been given the opportunity. It has further been provided under Sec. 23-D that if the dealer fails or refuse to sell the goods then he shall be liable for penally. Therefore, if the petitioner does not want to sell the goods he has the option to make the payment of the penalty of 30% of the offer price. It has further been provided that the penally shall be imposed and recovered in (he manner prescribed in this behalf. The right to purchase the goods under See. 23-D of the Act therefore is not absolute right. The object of Sec. 23-D is to prevent evasion of tax which the respondents have found being adopted by under- billing while the goods are imported or received from manufacturer. In a case of under-hilling the particulars so far as quantity etc are concerned, they are generally shown correctly and the dispute is only with regard to rale. The question as to whether a particular case is of under-billing or not is always a question of fact and has to he decided by taking into consideration the relevant evidence from the seller/purchaser of the commodity. A question arises that when the respondents are ready to make (he payment by increasing the value by 10% shown in the purchase bill, then why the dealer is not ready to sell deliver it. In a genuine transaction a dealer should have no objection except where he can show that 10% of the value increased in the purchase hill will not compensate the expendilure incurred. It may be on account of freight or oilier charges that the amount incurred may he more than 10% and he could satisfy the authorities that the provisions of Sec 23 D cannot be invoked since the section has provided to increase the value of purchase bill by 10% only. The expendilure incurred alter the preparation of purchase bill is not to be considered separately in accordance with the provisions of Sec. 23-D and adhoc increase of 10% has been provided so as to compensate the dealer of the expenses which might have been inclined on freight/octroi/loading/unloading etc. The provisions of Sec. 23-D make it incumbent upon the dealer to make the sale to the officer on such a price. If the dealer fails or refuses to sell the goods, he is liable for penally. The only Thing which to be done by the petitioner was to submit all his objections before the Dy. Commissioner (Admn) who has given the approval and even for the sake of arguments it is considered that the principles of natural justice have been violated in not providing the copy of the documents" on the basis of which the permission was given, the officer before imposing the penally shall give the notice and provide him full opportunity and at that stage he can claim the copy of such document. It may be noted that the provisions for purchase and levy of penalty stand on a different fooling. So far as the approval given by the Dy. Commissioner (Admn) for purchase is concerned on the basis of report he may form an opinion that it is a case of under-hilling. Even if the copy of the report is not provided to the petitioner the right of the petitioner is not affected as he is being paid the full value of the bill increased by II)";. It is not the case of the petitioner that the expenditures after preparation of the bill are more than 10%. The action of the respondents in purchasing the goods, therefore, does not allect any right of the petitioner. The principles of natural justice in accordance with the provisions of Sec. 23-D could, therefore, be only for providing opportunity to the dealer as to why the said permission or authorisation should not be given. At this stage the dealer has to satisfy the Commissioner or Dy. Commissioner in respect of expenses or other factors by which the permission or authorisation can be refused. In State of Kerala v. K. T. Shaduli Usuf it was observed by the Apex Court that the principles of natural justice is genis of which rule of having fixed connotation but has variable scope depending on the nature of audi alteram partem is a specie. The rule requiring opportunity of hearing is not an inflexible rule of the inquiry the frame work of the law under which it is held, the constitution of the authority holding the enquiry, the nature and character of the rights affected and the consequence flowing from the decision. The provisions of rule 23-D of the Act lead with rule 63-B (ii) contemplates an opportunity of being heard. The Principles of natural Justice which are required to be followed have been duly prescribed in the said rule and as such the sole requirement is to provide an opportunity of hearing and also to hold inquiry. Normally the principles of natural justice which contemplate for opportunity of being heard pollulale that the documents on the basis of which the decision is to be taken must be confronted to the parly affected as in the absence of such documents in the enquiry which may be in the form of statements etc. The person may not be effectively in a position to make his submissions, but as has been held by the Apex Court in the case of Shaduli Usuf (supra) the various contents of the opportunity have to depend on different factors. If a person whose goods are to be sold is being informed that the market rate is higher and the purchase bills show it a lower figure and he has the option to sell the goods at the rate given in the purchase bill added by 10% and the element of 10% include the expenses of bringing the goods within the limit of the town but does not include the sales-tax and the person in order to prove his bonafides may offer the goods to be purchased by the Commercial Taxes Department and no right in such a case would be affected. The Dy. Commisssioner (Admn) has held that the copy of the report is not to be given lor the purpose of giving his approval for purchase of the goods. The provisions of the Act provide for opportunity of being heard which can effectively be made if the documents on the basis of which the decision is taken are confronted to the other side but that stage would only when such penal action is being taken and which is being discussed in subsequent para. The purchase of the goods at the value mentioned in the bill added by 10%. is neither a penal action nor it otherwise affects the right of the dealer because the power may be exercised only to have the effect in the market in ease any person purchases the goods by showing the value less than the actual value then the Commercial Taxes Department may take an action under Sec. 23-D. It is therefore the decision of the authorities in taking such an action which may be depending on the facts of the case and the purchase of the goods of any person does not cast any repercussion to the purchaser. The requirement of opportunity being heard for showing the cause by which he could satisfy the authority that the goods are not purchased at the lesser rate than the market value could in number always. Suppose the goods are defective one and are of seconds quality or the purchase has been made in a whole-sale acccording to some scheme or in a situation where one person is closing his business or in a similar circumstances he is in a position to get the goods at the lesser figure it is the object of giving opportunity to explain the circumstances including the production of evidence by the dealer before the Dy. Commissioner (Admn ). Normally the order could have been set aside on this very ground that the copy of the enquiry report or the document relied upon has not been furnished to the person whose rights are effected, but as discussed above the rights are not affected as the Dy. Com-missioncr is paying more than what is mentioned in the bill. The enquiry contemplated under Sec. 23-D for giving the approval for purchase of the goods, Therefore, has been followed completely. The second stage is for levy of penally if the dealer fails or refuses to sell the goods. In a penal provision the principles of natural justice have to be fully complied with and any document which the respondents want to rely have to be provided to the petitioner. That stage has not yet come. If the petitioner is not willing to make the sale of the goods, then he may submit in writing that he is not willing to sell the goods and the penalty proceedings will be taken and the ACTO shall provide him the documents on the basis of which he has come to conclusion that the value of the goods is under slated. The petitioner shall have liberty to adduce evidence cross-examine the evidence colleceted by the respondents. The full opportunity is required to be given in the penalty proceedings against which a right of appeal has also been provided under the Act. The petitioner may therefore, if not willing to sell the goods in accordance with the provisions of see. 23-D of the Act, may refuse and then the ACTO shall Proceed to levy the penalty and shall observe the principles of natural Justice. If any action of levy of Penalty has been taken during the pendency of the wril, contrary to the observations made above, the respondents shall proceed again in accordance with the direction as given above. At this stage no interference under Article 226 of the Constitution is required in view of the inlerprelaion of the provisions of sec. 23-D of the Act.
(3.) CONSEQUENTLY, the wril petition having no force is dismissed with the above observations. .;