COMMISSIONER OF SALES TAX AND ANR. versus M/S. P.T. ENTERPRISES AND ANR.

Citation: [1999] SUPP. 5 S.C.R. 186 · Decided: 08-12-1999 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
COMMISSIONER OF SALES TAX AND ANR. 
v. 
MIS. P.T. ENTERPRISES AND ANR. 
DECEMBER 8, I 999 
B 
[S.P. BHARUCHA, D.P. WADHWA AND N. SANTOSH HEGDE, JJ.] 
Sales Tax 
Madhya Pradesh General Sales Tax Act, 1958-Sec.29-A-Whether 
C empowers the authorities to question the value of goods as declared in the 
documents with reference to market Value? Held, Yes. 
A truck belonging to the respondent carrying 'supari' was checked by 
the Sales Tax authorities and it was found that the value of g()ods as shown in 
D the declaration form was less than the real value. Thus, a notice under Section 
29-A (II) of the Madhya Pradesh General Sales Tax Act, 1958 was issued. 
The writ petition filed by the respondent to quash the said notice was allowed 
by High Court holding that the provisions of Section 29-A of the Act did not 
authorise the authorities to question the value of the goods as contained in 
the documents with reference to market value. Hence the present appeals. 
E 
Allowing the appeals, this <;ourt 
HELD : 1.1. The High Court erred in holding that the provision of 
Section 29-A of Madhya Pradesh General Sales Tax Act, 1958 does not 
authorise the authorities to question the value of the goods as contained in 
F the documents with reference to market value. (189-D) 
1.2. The provisions of sub-section (8) and (II) of Section 28-A of the Act 
clearly state that every person who transports goods of the kind notified by 
the State Government, and it is not disputed that 'supari' is notified, must 
carry with him an invoice, bill or challan or any other document issued by 
G the consignor of the goods that gives particulars relative to the goods. The 
transporter is obliged to stop the vehicle carrying the goods when required 
to do so to allow the Sales Tax authority to verify and check the declaration 
and documents aforesaid and to search the vehicle and inspect the goods. If 
such search and verification shows that the declaration that has been filed in 
H respect of the goods is false or incorrect in respect of, inter a/ia, the value 
186 
,.. 
COMMISSIONER OF SALES TAX v. P.T. ENTERPRISES [BHARUCHA, J.] 187 
thereof the authority may presume until the contrary is proved that an attempt A 
is being made to evade sales tax. He must then record his reasons in this 
behalf and supply a copy thereof to the transporter. If, after considering the 
transporter's explanation, the authority remains unsatisfied, he is required 
so to record and to serve on the transporter a notice to show cause why a 
penalty should not be imposed upon him. [188-H; 189-A-C) 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8921of1994. 
From the Judgment and Order dated 13.5.94 of the High Court of M.P., 
Bench at Indore in M.P. No. 71/94. 
WITH 
C.A. Nos. 9458/94, 9195 and 168/98. 
S.K. Agnihotri and Niraj Sharma for the appearing parties. 
The Judgment of the Court was delivered by 
BHARUCHA, J. These appeals raise a common question pertaining to 
the power conferred by Section 29-A of the Madhya Pradesh General Sales 
Tax Act, 1958. 
The facts that we narrate relate to the first appeal (Civil Appeal No. 8921 
B 
c 
D 
of 1994). 
E 
A truck carrying 120 bags of 'supari' belonging to the respondent was 
checked by the Sales Tax Authorities on 10th January, 1994 near Bijalpur 
when it crossed the barrier into Madhya Pradesh. It was found by these 
authorities that the value of the 'supari' as shown in the declaration form, was 
less than what it should really have been. Accordingly, the authorities issued F 
to the respondent a notice under Section 29-A ( 11) of the said Act. The notice 
required the respondent to show cause why it should not be held that the 
truck was carrying the goods without paying sales tax with the intention of 
evading sales tax and why penalty in the sum of Rs. 31, 472 should not be 
imposed. The respondent filed a writ petition in the High Court of Madhya 
Pradesh to quash the notice. By the order under challenge, thP writ petition G 
was allowed. The High Court held that the provisions of Section 29-A did not 
"authorise the authorities to question the value of the goods as contained 
in the documents with reference to market value ...... ". 
Section 29-A empowers the State government or the Commissioner of 
Sales Tax to set up checkposts or barriers "with a view to prevent or check H 
188 
SUPREME COURT REPORTS [1999) SUPP. 5 S.C.R. 
A evasion of tax ..... " Under sub-section (4) thereof, every person transporting 
goods 

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