M/S. A.B.C. (INDIA) LTD. versus STATE OF ASSAM AND ANR.

Citation: [2005] SUPP. 2 S.C.R. 36 · Decided: 04-08-2005 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Dismissed

Judgment (excerpt)

A 
B 
c 
D 
E 
MIS. A.B.C. (INDIA) LTD. 
v. 
ST A TE OF ASSAM AND ANR. 
AUGUST 4, 2005 
[S.N. VARIAVA AND DR. AR. LAKSHMANAN, JJ.] 
Assam General Sales Tax Act, 1993-Sections 3(1), 14, 42, 44, 46-A 
and 72(1)-Clearing, booking or forwarding agents or any transporter 
obliged to furnish complete particulars and accounts-Liable for penlaty in 
case of non-compliance -Provisions challenged in writ petition-Single 
Judge allowed writ petition-Division Bench allowed writ appeal of the 
respondent-Thereafter, .Act amended making it a statutory obligation of 
every transporter or agent engaged in transport of taxable goods to obtain 
a Certificate of Registration along with addition of certain new Rules-Writ 
petition filed in this court tagged along with pending apeal-Held, as per 
accepted norms of taxation whatever is an ancillary or subsidiary provision 
necessary for achieving the object of a tax statute is covered by Entry 54 
of List II of the Seventh Schedule to the Constitution-Obligation imposed 
upon transporters is also a part of preventive measures against evasion of 
taxes-No liability imposed upon the transporters, carriers etc. to pay any 
sales tax-No irregularity in calling for books of accounts, documents, 
evidence etc. so as to make proper verification and scrutiny for purposes of 
tax-Insertion of Section 46-A is to achieve the object of sealing loopholes 
of avoidance and evasion of sales tax by fictitious dealers with the help of 
transport companies-No infringement of any fundamental right-Constitution 
of India-Article 14, 19(I)(g), 21, 32, and 300A-Seventh Schedule, List II, 
F 
Entry 53 and 54-Tripura Sales Tax Act, 1976-Haryana General Sales Tax 
Act, 1973. 
G 
The appellant being engaged in the business of transportation of 
goods, filed a writ petition in the High Court challenging the provisions 
of Sections 42 and 44 of the Assam General Sales Tax Act, 1993. Under 
Section 42 of the Act, every clearing, booking or forwarding agent or any 
other person transporting goods, who during the course of his business 
handled documents of title to goods for or on behalf of any dalal or a 
person holding certificate under Section 14 was obliged to furnish to the 
prescribed authority true and complete particulars and information and 
H 
to maintain true and complete accounts, registers, documents etc. The 
36 
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M/S. A.B.C. (INDIA) LTD. v. STA TE 
37 
section also provided for le\"y of penalty at the rate of three time of tax 
A 
calculated on the value of the goods in respect of which no particulars 
or information were furnished or no cash memo or bill or challan was 
produced before the prescribed authority or rupees one thousand 
whichever is greater. Section 44 of the Act empowered any authority 
appointed under Section 3(1) of the Act that if he had reason to suspect 
that any dealer was attempting to evade tax or that any person transporting 
goods or any other person had kept his accounts in such a manner as is 
likely to cause evasion of tax payable under the Act, such authority could 
for reasons to be recorded in writing, seize such accounts and registers 
B 
or documents. Power had also given to the authority to enter into and 
~earch any place of business of any dealer. The section empowered the 
C 
authority to impose a penalty equal to three times the amount of tax 
calculated on the value of such goods and to release the goods as soon 
as the penalty was paid in case the dealer or the person in-charge of the 
goods failed to produce any evidence or satisfy the said authority regarding 
the proper accounting of the goods. 
Notices were issued to the appellant company, after the Sales Tax 
Department searched its premises and godowns, to produce the documents 
to satisfy the authority about the proper accounting of the seized goods. 
The appellant challenged the legality of one such notice by way of a writ 
petition, which was allowed by the Single Judge, following a judgment 
of this Court. The said provisions were held to be prospective in nature; 
therefore, demand of books of account prior to the enactment was not 
justified. The respondent preferred a writ appeal relying upon a later 
judgment of this Court, and it was allowed. Hence this appeal. 
The respondent - State taking advantage of the impugned judgment 
inserted Section 46-A in the Assam Act and thereby made it a statutory 
obligation of every transporter, carrier or transporting agent engaged in 
transport business relati

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