NEWSPRINT TRADING CORPORATION Vs. STATE OF ASSAM

JUDGEMENT

(1.) HEARD Mr. G. K. Joshi, learned Senior Advocate assisted by Mr. R. K. Joshi, learned counsel for the petitioner, and Mr. H. K. Mahanta, learned Government Advocate for the respondent-State.

(2.) THE case of the writ petitioner is that they are the indentors and importers of newsprint reels rendering their services to the leading newspapers of the country by importing newsprint reels from foreign countries on their behalf. Under the relevant rules, the newsprint reels are to be delivered to concerned newspapers and the indentors being importers of newsprint reels, registration is a must for import of newsprint reels. The petitioner being an agent makes the import on behalf of the registered newspapers and the imported newsprint reels are thereafter delivered to the newspapers on payment. Accordingly the petitioner imported the newsprint reels for and on behalf of the Assam Tribune, Guwahati, Assam, and the newsprints were brought from Russia and 228 newsprint reels were stored at Central Warehousing Corporation, Maligaon, Guwahati, for delivery to the Assam Tribune. Out of the 228 newsprint reels, 134 numbers were delivered to Assam Tribune and balance 94 news-print reels were lying in the Central Warehousing Corporation. The said 94 numbers of newsprint reels were seized on May 27, 1995 by the respondent No. 3, Inspector of Taxes, Sales Tax Department, Guwahati, and show cause notice was issued to the petitioner to this effect. Thereafter, the petitioner filed a reply stating, inter alia, that they were a mere agent of the Assam Tribune and the newsprint reels were imported and stored in the Central Warehousing Corporation for delivery to Assam Tribune on payment. As the payment for the balance 94 reels were not made, the reels could not be delivered and these were kept in the Central Warehousing Corporation. The respondent-authorities did not accept the statements of the petitioner and the order dated October 23, 1997 was passed by the respondent No. 4 demanding Rs. 85,217 on account of tax and interest and also imposed penalty of Rs. 1,89,888 under section 44 (5) (b) of the Assam General Sales Tax Act. The petitioner thereafter, approached this Court and the writ petition was disposed of with the direction to approach the appellate authority. Accordingly the petitioner approached the appellate authority, but the revision petition was dismissed confirming the order of the assessment officer. Hence the present writ petition. It may be mentioned here that the respondent-authorities issued a public notice for auction sale of the said newsprint reels in a public auction on the ground of failure of the petitioner to deposit the amount of penalty. Subsequently on submission of required bank guarantee, the seized reels were released to the petitioner. The case of the respondent-State on the other hand is that the petitioner imported 228 reels of newsprint from outside the State of Assam and had effected delivery of 134 numbers of reels during the period from May 9, 1997 to May 27, 1997 by way of sale. The petitioner is not a registered dealer under the Assam General Sales Tax Act, 1993 (for short "the Act") and he did not apply for registration as required and as such the petitioner was liable to pay tax on the sale of 134 reels of newsprint and hence the seizure.

(3.) THE petitioner in this case produced a copy of their offer, dated March 21, 1997 that contains the stipulation that imported goods will be delivered against payment only. In terms of the conditions offered, the Assam Tribune, Guwahati, accepted the same by their letter dated March 25, 1997 which has been produced by the petitioner. Petitioner also produced the copies of invoices, which show the name of Assam Tribune. Even the bill was in the name of Assam Tribune along with the importers code and excise import licence numbers. The petitioner had given the above details in their reply to the show cause notice. The then Superintendent of Taxes rejected the claim of the petitioner solely on the ground that the goods were not stored in the name of Assam Tribune. The goods were not delivered to Assam Tribune but the petitioner stored the same in the Warehousing Corporation. Admittedly, as no payments were released the goods were kept in the warehouse in the name of the petitioner only. Section 221 of the Indian Contract Act, reads as follows :