LexSTATE OF WEST BENGAL AND ORS versus MD. KHALIL ETC.
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STATE OF WEST BENGAL AND ORS.
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v.
MD. KHALil.. ETC.
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MAYS, 2000
[SYED SHAH MOHAMMED QUADRI AND SIITVARAJ V. PATil.., JJ.]
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Calcutta Metropolitan Area Act, 1972-Sections 2(c), 14(3), (6) and
(6)(b)-Certain goods brought into Calcutta without payment of entry tax-
Respondents contended that goods were purchased form local market but were
unable to prove the same-Demand notices challenged before High Court in c
writ petition-Interim order for payment of tax and penalty-Matter trans-
/erred to Tribunal, which put onus upon Authority to prove that goods wem
imported without payment of tax-Demand for entry tax and penalty set
aside-On appeal Held, respondents do not fall within the term "dealer", who
is mquired to deliver a statutory declaration for tax purposes and is alone
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responsible for the tax and penalty-No tax can be levied without there being
any material to show that goods wem brought into Calcutta without payment
of tax-Tax is to be levied upon entry of specified goods into Calcutta and not
on possession of specified goods therein-No presumption can be raised that
the possessor of specified goods, who fails to prove local purchase, has
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imported goods without payment of tax.
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Respondents allegedly brought certain goods into Calcutta without
paying the required entry tax under the Calcutta Metropolitan Area Act,
1972. They challenged the demand notices in a writ petition before the
ffigh Court but were directed by an interim order, to pay the assessed tax
in addition to penalty, if any. The matter was transferred to the Taxation
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Tribunal, where the respondents challenged the imposition of tax and
penalty under the Act. Their case was that they had purchased the goods
from the local market but were unable to furnish relevant details. Tribunal
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put the onus of proving that the goods were brought from outside the
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Metropolitan Area and that it was the respondent who so brought those
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goods on the Entry Tax Authority and held that there was no material on
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record to establish the same. It therefore set aside the demand for entry tax
and penalty. Hence these appeals.
Appellants contended that the onus of proving that goods were
brought from outside the Metropolitan Area was wrongfully put upon
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1189
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1190
SUPREME COURT REPORTS
[2000] 3 S.C.R.
them; and that they could draw a rebuttable presumption that entry tax
has not been paid when the goods were not produced in the Metropolitan
Area but were found stored therein.
Respondent contended that any person possessing specific goods
cannot be termed a dealer within Section 2(c) of the Act on whom the
liability to pay the tax lies, that appellants were to prove that the goods
were brought from outside the Metropolitan Area, without the payment of
entry tax; that {mport of specified goods by a dealer and purchasing them
from a local market are two different things and no tax should be levied if
they are unable to prove local sale; and that there is no provision in the Act
placing burden of proof on the possessor of the goods to establish that
goods were imported on payment of tax and Section 14(3) of the Act does
not intend to tax them.
Dismissing the appeals, the Court
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HELD: 1. A perusal of Section 14(3) of the Calcutta Metropolitan
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Area Act, 1972 discloses thatitis meant to check tax evasion. The liability to
pay the tax under Section 14(1) and the tax penalty under Section 14(2) and
(3) is on the dealer. It is only in a case falling under Section 14(6)(b), that a
person other than a dealer is dealt with and a duty is cast on him to produce
documents, accounts register etc. when he is required to do so by the pre-
scribed Authority. The dealer is the person required to deliver the statutory
declaration and is also answerable for the tax as well as for the penalty
imposed under the Act. There are four categories of persons who fall within
the meaning of the term "dealer''. A person who is in possession of the speci-
fied goods does not fall within the meaning of that term. The respondent is
not a 'dealer' within the meaning of the Act. [1197-F; 1198-D-F]
2. For assessing entry tax under sub-section (3) of Section 14 of the
Entry Tax Act, it has to be shown that the specified goods have been
brought into Calcutta Metropolitan Area; that such goods have been
brought without payment of tax leviable thereon under the Act; and that
such goods are fouExcerpt shown. Read the full judgment & AI analysis in Lexace.