Holding

The impugned provisions of the West Bengal Sales Tax Act, 1994—including Section 2(6), the explanation to Section 11, Section 14(4), and the related Rules and Forms—are constitutionally valid and intra‑vires, and the Tribunal’s orders striking them down are set aside.

Summary

The State of West Bengal challenged the constitutional validity of several provisions of the West Bengal Sales Tax Act, 1994 and its 1995 Rules, including Section 2(6), the explanation to Section 11, and Section 14(4), as well as Rules 172, 173, 174, 188 and 189. The respondents argued that these provisions created a statutory fiction of sale contrary to Article 366(29A) and violated Article 14, and that the State lacked legislative competence to impose them on transporters and warehouse lessees. The Supreme Court held that the provisions are aimed at preventing tax evasion, fall within the State’s power under Entry 54 of List II, and the statutory presumption is a permissible rebuttable presumption under the Evidence Act. Consequently, the Court declared the Tribunal’s suspension of Section 2(6) and its striking down of the other provisions unconstitutional, set aside those orders, and upheld the challenged provisions. The civil appeals were allowed and the orders of the Tax Tribunal were vacated.

Issues considered

Whether Section 2(6) of the West Bengal Sales Tax Act, 1994 is constitutionally valid and can be suspended pending the prescription of machinery.
Whether the explanation to Section 11(1) and its subsections (5), (7), (8), (10), (11) and (12) constitute an impermissible statutory fiction violating Article 366(29A) and Article 14.
Whether the State Legislature has competence under Entry 54 of List II to impose liability on transporters and warehouse owners as casual traders for tax evasion purposes.
Whether Rules 172, 173, 174, 188 and 189 and Forms 28, 31, 32 are intra‑vulnerable.
Whether the statutory presumption in the explanation to Section 11(1) is a valid rebuttable presumption under the Indian Evidence Act, 1872.

Legislation cited

Bengal Finance (Sales Tax) Act, 1941
Constitution of Indias. Article 14, s. Article 366(29A), s. Seventh Schedule List II Entry 54
Indian Evidence Act, 1872s. 4
Motor Vehicles Act, 1988
West Bengal Sales Tax Act, 1994s. 11, s. 14(4), s. 2(6)
West Bengal Sales Tax Rules, 1995s. 172, s. 173, s. 174, s. 188, s. 189

Subjects

Sales TaxCasual TraderStatutory PresumptionLegislative CompetenceArticle 366(29A)Article 14Tax EvasionWest Bengal

Judgment

A STATE OF WEST BENGAL AND ANR.
V.

E.l.T.A. INDIA LTD. AND ORS.

MARCH 5, 2003

B [SYED SHAH MOHAMMED QUADRI AND ASHOK BHAN, JJ.]

West Bengal Sales Tax Act, 1994/West Bengal Sales Tax Rules, 1995-
Sections 2(6), 11 (I) Explanation thereto, (5), (7), (8), (10), (11) and (I 2),
C 14(4)/ Rules 173, 174, 188 and 189-Casual traders-Liability to pay tax on
sale and purchase-Transporter and owner/lessee of warehouse deemed as
casual trader--Disposal of goods by them deemed to be sale as per the Act,
unless contra is proved-Constitutionality of the provisions challenged-Tax
Tribunal held Section 2(6) as valid, but in view of lack of machinary provision
suspended the same-All other provisions held unconstitutional-provisions
D held to be beyond legislative colnpetence of the State-Plea that no State
Legislature can create a fiction to treat any other transaction as sale except
to the extent as provided under Article 366(29A) of the Constitution-On
appeal held-Suspension of Section 6(2) not justified-Provisions of Section
11 are enacted to prevent evasion of tax payable under the Act-State
E Legislature has power to provide for measures for prevention of evasion of
tax-Hence the provisions intended to prevent the evasion of tax are within
the legislative competence of the State and are intra vires Entry 54 of List ll
of the Seventh Schedule-It will be misconceived to treat the statutory
presumption incorporated in the Explanation to sub-section (1) of Section I 1
as extending the definition of 'sale' in clause (29-A) of Article 366 of the
F Constitution-Constitution ofIndia, 1950-Article 366(29A)-Seventh Schedule,
List ll, Entry 54-Evidence Act, I872-Section 4-Bengal Finance (Sales
Tax) Act, I94I.

Constitution of India, I950-Article 14-Challenge to taxation statute
on the ground of classification-Held: Legislature enjoys a greater latitude
G for classification in the field of taxation-No legislation can be declared to be
illegal on the ground of being unreasonable or on the anvil of Article 14,
except when it fails to clear the test of arbitrariness and discrimination.

Respondents challenged the constitutional validity of Section 2(6);
H explanation to sub-section (1), sub-sections (5), (7), (8), (10), (11) and (12) of
668
-(
STATE v. E.l.T.A. INDIA LTD. 669
Section 11; Section 14(4) of West Bengal Sales Tax Act, 1994 and Rules 172, A
173, 174, 188 and 189 of West Bengal Sales Tax Rules, 1995. Taxation
Tribunal held Section 2(6) of the Act as valid and constitutional with a rider
that until the manner of disclosure of name and address of the consigner or
consignee was prescribed in terms of the judgment, the provision as to
disclosure of those particulars shall remain suspended; that explanation to B
sub-section (I) of Section 11 was declared to be ultra vires the Constitution;
that parts of sub-section (5) of Section 11 and sub-section (4) of Section 14
were declared as invalid and unconstitutional to the extent they applied to
transporters; that sub-sections (7) and (8) of Section 11 and the words 'for
the purpose of sub-section (7) and Sub-Section (8) in Clause (ii) of Section
11(5) were struck down as invalid and unconstitutional and beyond the C
legislative competence of the State; that sub-Sections (10), (11) and (12) of
Section 11 were declared unconstitutional in so far as they were applicable
to transporters; that Rules 172, 173 and 174 of the Rules were also struck
down; Forms 28 and 31 prescribed under Rules were struck down in so far
as they related to defence tax or security in lieu thereof with reference to a
transporter; Form 32 prescribed under the Rules was declared valid; that D
rules 188 and 189 were declared valid subject to observations in the judgment
in respect of transporters.

In appeal to this Court appellant-State contended that having upheld
the constitutional validity of Section 2(6) which clearly provided the E
particulars to be declared by the transporters, there was no valid reason for
the Tribunal to suspend the operation of the Section; that the Tribunal erred
in striking down the impugned provisions of the Act on the ground of lack of
legislative competence ignoring the fact that the legislature had ancillary
power to enact provisions to prevent evasion of tax.
F
Respondents contended that except to the extent the provision of Article
366 (29A) of the Constitution of India provide for a deemed sale, no State
Legislature can create a fiction to treat any other transaction as sale and,
therefore, the disposal of the goods by a casual trader cannot per se be treated
as sale of the goods and he cannot be put to onerous task of proving a negative
fact that the disposal of the goods was not by way of sale. G
Allowing the appeals, the Court

HELD: I.I A combined reading of the definitions of 'casual trader' and
'transporter' discloses that they are aimed at preventing any possible evasion
of tax payable under West Bengal Sales tax Act, 1994 by spreading a very H
,_
670 SUPREME COURT REPORTS [2003) 2 S.C.R.

A wide net. A comparison of the definition of 'casual trader' in the Act with
the definition of the said expression in the Bengal Finance (Sales Tax) Act,
1941 shows that there is no material difference between the two. Two
categories of persons are included within the meaning of 'casual trader'. Every
prudent bonajide transporter is expected to know the particulars of the
B consignor of the goods for transportation and of the consignee to whom the
goods have to be delivered in West Bengal. Similarly, every reasonable
transporter is expected to have a copy of the challan, transport receipt or
consignment note or document of like nature in respect of goods which are
being transported. The requirement to furnish these particulars cannot,
therefore, be treated as requiring the transporter to furnish information which
C is beyond his capacity or control. So also a prudent and reasonable owner or
lessee of a warehouse where such goods are stored is expected to know the
name and address of the owner of such goods and requiring him to furnish
those particulars cannot be said to be either oppressive, irrelevant or arbitrary.
In any event, after the Act came into force, such a person is expected to know
and collect necessary particulars and information so there can be no legitimate
D excuse for non-compliance of the statutory requirements. It is only in the event
of failure to furnish such information that the definition creates a fiction
deeming such a transporter of goods or owner or lessee of a warehouse as a
consignor or a consignee who, has brought the goods from any place outside
West Bengal for sale in West Bengal, or has procured the goods, otherwise
E than by way of purchase, from any person, other than the registered dealer,
for sale in West Bengal, or has purchased such goods in West Bengal from
any person, other than the registered dealer, for purposes other than his
personal use or consumption of such goods in West Bengal, as the case may
be. For the purpose of furnishing the particulars, neither any special proforma
is necessary nor any machinery is required to effectuate the section. Therefore,
F the reasoning of the Tribunal to justify suspension of Section 6(2) for want of
machinery provisions cannot be upheld. [677-B-F; H; 678-A-C)

1.2. It cannot be said that except to the extent the provision of clause
29-A of Article 366 of the Constitution of India provides for a deemed sale,
G no State Legislature can create a fiction to treat any other transaction as sale
and, therefore, the disposal of the goods by a casual trader cannot per se be
treated as sale of the goods and he cannot be put to onerous task of proving
a negative fact that the disposal of the goods was not by way of sale. In Section
4 of Evidence Act, 1872, the expression 'may presume' postulates whenever
it is provided by the Evidence Act that the court may presume a fact, it will
H regard such fact as proved, unless and until it is disproved, or may call for
STATE v. E.l.T.A. INDIA LTD. 671
proof of it, but the expression 'shall presume' implies, whenever the Evidence A
Act says that the court 'shall presume' a fact, it shall regard such fact as
proved, unless and until it is disproyed. The statutory presumption
incorporated in Explanation to sub-section (1) of Section 11 is in the nature
of the second category of presumption. The deeming provisions embodied in
the Explanation does not extend the meaning of sale to every disposal of goods. B
It is attracted when a transporter or an owner or a lessee of a warehouse is
unable to account for the disposal of goods; the fact of disposal of the goods
in question having been established, the statutory presumption which is a
rebuttable presumption, would apply and the disposal of goods shall be
deemed to be by way of sale; it will be open to such a person to rebut the
presumption. Raising of such rebuttable presumption is normal legislative C
practice and no invalidity can be attributed to the same. It will be wholly
misconceived to treat the statutory presumption incorporated in the
Explanation as extending the definition of 'sale' in clause (29-A) of Article
366 of the Constitution. Indeed there can be no analogy between the definition
of deemed sale incorporated in clause (29-A) of Article 366 of the Constitution
and the statutory presumption incorporated in Explanation to sub-section (1) D
of Section 11. Explanation to Section 11(1) is valid in law and the challenge
to its invalidity is misconceived and unsound. !682-8-H; 683-AJ

Sodhi Transport Co. and Ors. v. State of Uttar Pradesh and Ors., [1986) 2
sec 486, relied on. E
1.3. Sub-sections (3), (4), (5), (6), (7) and (8) of Section 11 are part of
the same scheme aimed at prevention of evasion of tax payable under the Act
Sub-sections (10) and (12) are consequential provisions. Imposition of penalty
is authorized under sub-section (11 ). These sub-sections stand or fall along
with sub-sections (5), (7) and (8). The impugned sub-sections of Section 11 F
are enacted to prevent evasion of tax payable under the Act. State Legislature,
while providing for levy of impost, has power to provide for incidental matters,
including measures for prevention of evasion of tax. Hence the impugned

-· provisions which are intended to prevent the evasion of tax payable under
the Act are within the legislative competence of the State.and are intra vires
Entry 54 of List II of the Seventh Schedule to the Constitution. G
[684-G, H; 685-A; 687-FJ

Mis. Nand Lal Raj Kishan v. Commissioner of Sales Tax, Delhi and Anr.,
[1962) 1 SCR 283; Balaji v. Income-Tax Officer, Special Investigation Circle,
(196212 SCR 983; Khyerbari Tea Co. Ltd and Anr. v. The State ofAssam, [1964) H
672 SUPREME COURT REPORTS [2003) 2 S.C.R.

A 5 SCR 975; Tripura Goods Transport Association and Anr. v. Commissioner of
Taxes and Ors., (1999] 2 SCC 253 and State o(Rajasthan and Anr. v. DP Metals,
(2002] 1 sec 279, relied on.

1.4. Sub-section (4) of Section 14 is concerned with the detention of the
vehicle for purposes of assessment and recovery of tax. This provision is also
B an anti-evasion of tax provision and over-rides Section 46. There is no illegality
in sub-section (4) of Section 14 of the Act (689-B, CJ

1.5. The impugned provisions of sub-sections (5), (7), (8) of Section 11
and sub-section (4) of Section 14 are broadly akin to the provisions in the
C Bengal Finance (Sales Tax) Act, 1941, the validity of which was upheld by
this Court. (689-D]

State of West Bengal and Anr. v. Road Transport Association, Sitaguri and
Anr., (2003] 3 SCC 593 = JT (2003] 2 522 , relied on.

D 1.6. In the view taken in upholding the provisions of the Act, the
impugned Rules, namely Rules 172, 173, 174 'ind 188 of West Bengal Sales
Tax Rules, 1995 and Forms 28 and 31 are also upheld. (689-E]

2. If a legislation is found to lack in legislative competence or is found
to be in contravention of any provision of the Constitution, the impugned
E legislation cannot escape the vice of unconstitutionality. A challenge to any
statutory provision on the ground of the classification being discriminatory
and violative of Article 14 of the Constitution, can be successfully met on the
principle of reasonable classification having nexus to the object of the Act
sought to be achieved. However, the legislature enjoys a greater latitude for
classification in the field of taxation. No legislation can be declared to be illegal,
F much less unconstitutional on the ground of being unreasonable or harsh on
the anvil of Article 14 of the Constitution, except when it fails to clear the ,_
test ·or arbitrariness and discrimination which would render it violative of
Article 14 of the Constitution. (674-F, G, H; 675-B]

Keshavananda Bharti v. State of Kera/a, AIR (1973( SC 1643; State of
G Andhra Pradesh and Ors. v. Macdowell and Co., (1996) 3 SCC 709; State of
Bombay v. F.N. Balsara, (1951) SCR 682; Budhan Choudhary and Ors. v. State
ofBihar, (1955] 1SCR1045; !Ws. Steelworth ltd v. State ofAssam, (1962( Suppl.
2 SCR 589; Gopal Narain v. State of Uttar Pradesh and Anr., AIR (1964] SC
370 and Ganga Sugar Corporation Ltd v. State of Uttar Pradesh and Ors., AIR
H (19801SC286, referred to.
ST \TE v. E.I.T.A. INDIA LTD. [SYED SHAH MOHAMMED QUADRI, J.]673

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8182 of A
1995.

From the Judgment and Order dated 7.4.1995 of the West Bengal
Taxation Tribunal in R. No. 152 of 1993.
WITH
B
C.A. Nos. I 1649-50/95, 5863-64, 5865-66 and 5534 of 1997.

B. Sen and Rakesh Dwivedi, Dayan Krishnan, S. Mishra for Mis. Sinha
and Das for the Appellants.

Yashank Adhyaru and Ms. V.D. Khanna, for the Respondents.
c
The Judgment of the Court was delivered by

SYED SHAH MOHAMMED QUADRI, J.

Civil Appeal Nos. 5863-64/1997, 5865-66/I997 and 5534/1997 :

These appeals from various orders of the West Bengal Taxation Tribunal
D
(for short, 'the Tribunal') raise a common question as to the constitutional
validity of provisions, mentioned hereunder, of the W.est Bengal Sales Tax
Act, 1994 [West Bengal Act XVIX of 1994] (for short, '<he Act') and the
Rules made thereunder. The Act came into force on March 23, 1995. It
repealed the Bengal Finance (Sales Tax) Act, 194 I which was then in force. E
The respondents challenged the constitutional validity of the following
provisions of the Act: (i) Section 2(6); (ii) Explanation to sub-section (I),
sub-section (5), (7), (8), (10), (I I) and (12) of Section 11; (iii) sub-section
(4) of Section 14; and (iv) Rules 172, 173, I74, 188 and 189 of the West
Bengal Sales Tax Rules, 1995 (for short, 'the Rules'). The Tribunal held: F
"that section 2( 6) of the 1994 Act is valid and constitutional with a
rider that until the manner of disclosure of name and address of the
consignor or consignee is prescribed in terms of this judgment, the
provision as to disclosure of those particulars shall remain suspended.
Observations have also been made in the body of the judgment G
regarding the extent of responsibility of a transporter in furnishing
the required documents and disclosing the required particulars. The
Explanation below sub-section (I) of Section 11 is declared to be
unreasonable and .ultra vires the Constitution. The said Explanation
is, therefore, struck down. As per paragraphs 20 and 21 of this H
674 SUPREME COURT REPORTS [2003] 2 S.C.R.

A judgment, parts of sub-section (5) of Section 11 and sub-section (4)
of Section 14 are declared as invalid and unconstitutional to the extent
they apply to a transporter. Sub-sections (7) and (8) of section 11 and
the words 'for the purpase of sub-section (7) and sub-section (8)' in
clause (ii) of section 11 (5) are struck down as invalid and
unconstitutional and beyond the competence of the State Legislature.
B Sub-sections (JO), (11) and (12) of Section 11 are also declared
unconstitutional insofar as they are applicable to transporters. Rules
172. 173 and 174 of the 1995 Rules are struck down-for the reasons
already stated. Forms 28 and 31 prescribed under the 1995 Rules are
struck down in so far as they relate to advance tax or security in lieu
C thereof with reference to a transporter. Form 32 prescribed under
those rules is valid. Rules 188 and 189 of the said Rules are valid
subject to observations in this judgment in respect of transporters."
Mr. B. Sen, learned senior counsel appearing for the appellants-State,
has contended that having upheld the constitutional validity of Section 2(6)
D which clearly provides the particulars to be declared by the transporter, there
was no valid reason why the Tribunal should suspend the operation of the
section so that portion of the order needs to be set aside. It is submitted that
the Tribunal erred in striking down the impugned provisions of the Act on
the ground of lack of legislative competence ignoring the fact that the
legislature has ancillary power to enact provisions to prevent evasion of tax.
E The learned counsel has argued that the Tribunal is clearly wrong in declaring
Explanation below Section 11(1) of the Act as arbitrary, unreasonable so
unconstitutional.
In examining the constitutional validity of the impugned provisions of
a statute, it will be useful to bear in mind the following well-settled
F propositions. If a legislation is found to lack in legislative competence or is
found to be in contravention of any provision of Part III or any other provision
of the Constitution, the impugned legislation cannot escape the vice of
unconstitutionality [See: Keshavananda Bharti v. State of Kera/a, AIR ( 1973)
SC 1643 and also State of Andhra Pradesh and Ors. v. Macdowell & Co.,
G [1996] 3 sec 709]. A challenge to any statutory provision on the ground of
the classification being discriminatory and violative of Article 14 of the
Constitution, can be successfully met on the principle of reasonable
classification having nexus to the object of the Act sought to be achieved;
[See: State of Bombay v. F.N. Balsara, [1951] SCR 682 and Budhan
Choudhary and Ors. v. State of Bihar, [ 1955] I SCR I 045]. However, the
H legislature enjoys a greater latitude for classification in the field of
STATE v. E l.T,A. INDIA LTD. [SYED SHAH MOHAMMED QUADRI, J.]675

taxation (See: Mis. Steelworth Ltd. v. State of Assam, (1962] Suppl. 2 SCR A
589; Gopa/ Narain v. State of Uttar Pradesh and Anr., AIR (1964) SC 370;
and Ganga Sugar Corporation Ltd~ v. State of Uttar Pradesh and Ors., AIR
(1980) SC 286]. No legislation can be declared to be illegal, much less
unconstitutional on the ground of being unreasonable or harsh on the anvil
of Article 14 of the Constitution, except, of course, when it fails to clear the
test of arbitrariness and discrimination which would render it violative of B
Article 14 of the Constitution. [See : Mis. Steelworth Ltd. and Macdowell &
Co. (supra)].

Inasmuch as the expression 'casual trader', defined in sub-section (6) of
Section 2 of the Act is of great significance it will be apt to read it here : C
"2. Definitions-- In this Act, unless the context otherwise requires,-

6. 'casual trader' means a person, other than a registered dealer, who
has no fixed place of business fn West Bengal and who,--

(a) as a consignor or consignee, brings into West Bengal any goods,
D
other than those specified in Schedule I or Schedule IV or those
notified under sub-section (2) of section I 0, from any place outside
West Bengal for sale in West Bengal, or
(b) procures goods, other than those specified in Schedule I or
Schedule IV, otherwise than by way of purchase from a person
E
other than a registered dealer, for sale in West Bengal, or

(c) purchases any goods, other than those specified in Schedule I or
Schedule IV, in West Bengal from any person, other than a
registered dealer, for purposes other than his personal use or
consumption of such goods in West Bengal, any includes, whether
he has a fixed place of business in West Bengal or not,--
F

(i) a transporter as defined in clause (a) of the Explanation of Section
72, and who while carrying such goods in his goods vehicle fails
to disclose the name and address on the consignor or consignee
in West Bengal or fails to furnish copy of invoice, challan,
transport receipt or consignment note or document of like nature G
in respect of such goods, or

(ii) an owner or lessee of a warehouse where such goods are stored
and who fails to disclose the name and address of the owner of
such goods or fails to satisfy the Commissioner that such goods
are for his personal use nr consumption, H
676 SUPREME COURT REPORTS [2003] 2 S.C.R.

A and who, for such failure, shall be deemed to have brought such
goods as specified in sub-clause (a) or procured such goods as specified
in sub-clause (b) or purchased such goods in sub-clause (c), as the
case may be on his own account."

A perusal of the definitfon of the expression "casual trader" shows that
B it has three parts. The first part defines the expression to mean a person, other
than a registered dealer, not having a fixed place of business in West Bengal
and who: (a) either as a consignor or as a consignee, brings into West Bengal
any goods other than those specified in Schedule I or Schedule IV or •those
notified under sub-section (2) of Section 10 (hereinafter referred to as "the
C excluded goods") from any place outside West Bengal for sale in West Bengal,
or (b) procures goods, other than the excluded goods, otherwise than by way
of purchase from a person other than a registered dealer for sale in West
Bengal, or (c) purchases any goods, other than the excluded goods, in West.
Bengal from any person, other than a registered dealer, for purposes other
than his personal use or consumption of such goods in West Bengal. The
D second part takes in its fold a person, whether he has a fixed place of business
in West Bengal or not, who is (i) a transporter, as defined in clause (a) of the
Explanation to Section 72, and while carrying such goods in his goods vehicle,
fails: (a) to disclose the name and address of the consignor or consignee in
West Bengal, or (b) to furnish a copy of invoice, challan, transport receipt or
consignment note or document of like nature in respect of such goods; or (ii)
E an owner or lessee of a warehouse where such goods are stored and fails (a)
to disclose the name and address of the owner of such goods, or (b) to satisfy
the Commissioner that such goods are for his personal use or consumption.
And the third part contains a statutory presumption to the effect that such a
transporter or an owner or lessee of a warehouse, who fails to fulfil the
F obligations mentioned above, is deemed to have brought such goods as
specified in clauses (a) or (b) or (c), as the case may be, in the first part of
the definition, on his own account.

A 'transporter' is defined in Explanation (a) to Section 72, which reads
as follows:
G " 'transporter' means the owner, or any person having possession or
control, of a goods vehicle who transports on account of any other
person for hire or on his own account any goods from one place to
another, and includes any person whose name is entered in the permit
granted under the Motor Vehicles Act, 1988 (59 of 1988), as the
H holder thereof, the driver or any other person in charge of such
STATE v. E.l.T.A. INDIA LTD. [SYED SHAH MOHAMMED QUADRI, .J.]677

vehicle." A
It is seen that the explanation defined the terms 'transporter' to mean
the owner or any person having possession or control of a goods vehicle who
transports on account of any other person for hire or on his own account any
goods from one place to another; it includes any person whose name is
entered in the permit granted under the Motor Vehicles Act, 1988 and the B
holder thereof, the driver or any other person in charge of such vehicle.

A combined reading of the definitions of 'casual trader' and 'transporter'
discloses that they are aimed at preventing any possible evasion of tax payable
under the Act by spreading a very wide net. A comparison of the definition
of 'casual trader' in the Act with the definition of the said expression in the C
Bengal Finance (Sales Tax) Act, 1941 (for short, 'the 1941 Act') shows that
there is no material difference between the two. Two categories of persons
are included within the meaning of 'casual trader'; the first is the transporter
who while carrying the goods fails to disclose the name and address of the
consignor or the cor:signee in West Bengal or having so declared the names, D
fails to furnish a copy of the invoice, challan, transport receipt or consignment
note or document of like nature in respect of such goods. Every prudent bona
fide transporter is expected to know the particulars of the consignor of the
goods for transportation and of the consignee to whom the goods have to be
delivered in West Bengal. Similarly, every reasonable transporter is expected
to have copy of the challan, transport receipt or consignment note or document E
of like nature in respect of goods which are being transported. The requirement
to furnish these particulars cannot, therefore, be treated as requiring the
transporter to furnish information which is beyond his capacity or control. So
also a prudent and reasonable owner or lessee of a warehouse where such
goods are stored is expected to know the name and address of the owner of
such goods and requiring him to furnish those particulars cannot be said to F
be either oppressive, irrelevant or arbitrary. As an alternative to non-disclosure
of the name and address of the owner of the goods stored in the warehouse,
such an owner or lessee is required to satisfy the Commissioner that such
goods are for his personal use or consumption. A person in possession af the
goods must have stored them for and on behalf of the owner thereof or as his G
own goods for his personal use or consumption. The information required to
be furnished by the owner or the lessee of a warehouse will normally be
within his knowledge and, at any rate, ought to be within the knowledge of
a reasonable owner or the lessee of a warehouse. In any event, after the Act
came into force, such a person is expected to know and collect necessary
particulars ~nd information so there can be no legitimate excu~e for non- H
\
)-

678 SUPREME COURT REPORTS [2003] 2 S.C.R.

A compliance of the statutory requirements. It is only in the event of failure to
furnish such information that the definition creates a fiction deeming such a
transporter of goods or owner or lessee of a warehouse as a consignor or a
consignee who, has brought the goods from any place outside West Bengal
for sale in West Bengal, or has procured the goods, otherwise than by way
B of purchase, from any person, other than the registered dealer, for sale in the
West Bengal, or has purchased such goods in West Bengal from any person,
other than the ·registered dealer, for purposes other than his personal use of
consumption of such goods in West Bengal, as the case may be. For the
purpose of furnishing the particulars under the afore-mentioned provision,
neither any special proforma is necessary nor any machinery is required to
C effectuate the section. It is, therefore, difficult to uphold the reasoning of the
Tribunal to justify suspension of the said provision for want of machinery ·
provisions. In this regard, the Tribunal referred to the Explanation to Section
2(l)(a)(i) of the 1941 Act, which had also been suspended by it in an earlier
proceeding. In the appeal against the said order, in Civil Appeal No. 8180 of
1995, we have held that keeping that provision under suspension for want of
D a machinery was uncalled for and was illegal. We reiterate the same view in
regard to Section 2(6) of the Act. We record the candid concession of Mr.
Yashank Adhyaru, learned senior counsel for the respondents, that it will not
be possible to support the reasoning and the conclusion of the Tribunal on
th is aspect.
E We shall now advert to various provisions of Section 11 which are
brought under challenge. Inasmuch as almost entire Section 11 is under
challenge, it is quoted fiere :

"11. Liability to pay tax on sales by casual trader - (I) Notwithstanding
anything contained elsewhere in this Act, a casual trader shall be
F liable to pay tax on all his sales in West B~ngal of goods, other than
those specified in Schedule I or Schedule IV or those notified under
·sub-section (2) of Section 10, brought by him into West Bengal from
any place outside West Bengal, or on all his sales in West Bengal of
goods, other than those specified in Schedule I or Schedule IV,
G procured by him othervv ise than by way of purchase from a person
other than a registered dealer.
Provided that no tax shall be levied on sales of goods which are
effected on or after the date on which he becomes liable to pay tax
under Section 9 or sub-section (3) of Section 27 and is registered
H under Section 26 or Section 27.
ST ATE v. E.l.T.A. INDIA LTD. [SYED SHAH MOHAMMED QUAD RI, .I ]679

Explanation - Where a transporter, or an owner or a lessee of a A
warehouse, deemed to be a casual trader in respect of any goods
referred to in sub-section (I), is found to have disposed of such
goods the disposal of such goods shall be deemed to have been made
by way of sale by him in West Bengal, unless he proves it otherwise
with satisfactory evidence.
B
(2) The tax payable under this section by a casual trader shall be
levied at the rate referred to in clause (a), clause (b), clause (d),
clause (e), clause (f), clause (g) or clause (h), as the case may be, of
sub-section (!) of Section 17.
(3) The tax payable under this section shall, ,votwithstanding anything
contained in section 46, be determined, collected and recovered in
c
such manner and by such authority as may be prescribed and shall be
•· paid by such time as may be prescribed.
(4) No person shall, ex;~pt in accordance with the restrictions and
conditions provided in sub-section (5), bring into West Bengal any
goods, other than those specified in Schedule I or Schedule IV or
D
those notified under sub-section (2) of Section I 0.
(5) Every person transporting in a road vehicle,--
(a) goods, other than those specified in Schedule I or Schedule IV or
those notified under sub-section (2) of Section I 0, brought by him
I E
mto West Bengal, or
(b) goods, other than those specified in Schedule I or Schedule IV,
procured by him otherwise than by way of purchase from a person,
either than a registered dealer,
shall, on interception by any person appointed under sub-section (!) F
of Section 3 and authorised by the Commissioner in this behalf
(hereinafter referred to in this section as the authorised officer) stop

- the vehicle and produce, on demand, before such authorised officer
invoice, challan, transport receipt, consignment note or document of
like nature in respect of such goods and shall also furnish the name,
address and number of the certificate of registration of the consignor G
or consignee, if registered, and thereafter,--
(i) if it appears to the authorised officer that such goods are being
transported by a person who is not a casual trader liable to pay tax
under this secticn, he shall immediately allow movement of such
vehicle, or H
/-

680 SUPREME COURT REPORTS [2003) 2 S.C.R.

A (ii) if it appears to the authorised officer that the goods are being
transported by a casual trader or by some person on his behalf, he
may detain such vehicle ordinarily for a period not exceeding twenty-
four hours for the purposes of sub-section (7) and sub-section (8).
(6) For the purposes of this section or section 14, the owner or
B lessee of a warehouse where goods are stored, shall furnish, on
demand, before the Commissioner or the authorised officer.-
(a) if he is the owner of such goods, the invoice, challan or other
documents in support of the manner of securing such goods, or
(b) if he declares that the goods are being stored by another person,
c name and addres~ of the person who has stored the goods and evidence
in support of occupancy of the warehouse by that person.
and in the event of failure to furnish such particulars or evidence
•
within a reasonable time, the authorised officer may seal such
warehouse for a period ordinarily not exceeding twenty-four hours
D from the time of enquiry or search for the purposes of sub-section (7)
and sub-section (8).
(7) if the Commissioner or any person appointed under sub-section
(I) of Section 3 to assist him is satisfied that a casual trader may
become liable to pay tax under sub-section (I) in respect of any
E goods, he may, in order to secure payment of tax that may become
due upon determination of tax under sub-section (3) and for reasons
to be recorded in writing, demand from such casual trader an amount
in advance equivalent to the amount of tax that may become due
from him after detennination, or security for an equivalent amount,
after taking into consideration the saleable value of such goods.
F
(8) The amount in advance equivalent to the amount of tax that may
become due from a causal trader after determination after taking into
consideration the saleable value of the goods as aforesaid shall, on
demand under sub-section (4), be paid by him in advance and shall
be adjusted with the aM0unt of tax due from him; and the security,
G if any, for the equivalent amount shall, on demand, be furnished by
him, and shall be refunded to him, in such manner and on such terms
and conditions as may be prescribed.
(9) For the purposes of this section, if-
H (a) production and inspection of accounts, registers and documents,
STATE v. E.I.T.A. INDIA LTD. [SYED SHAH MOHAMMED QUADRI, J.]681

and seizure thereof, A
(b) entry, search and sealing of warehouse.

(c) interception, detention and search of any road vehicle, and

(d) seizure of any goods,
B
are required by the authorised officer, the provision of section 65,
section 66, section 67, section 69 and section 70 shall apply mutatis
mutandis.

(10) Where the Commissioner or the authorise~ officer has reason to
believe that a person transporting goods has contravened the C
restrictions and conditions provided in sub-section (4) or section (5)
or an owner or a lessee of a warehouse fails to comply with the
conditions provided in sub-section (6), and if such person, owner or
lessee, as the case may be, fails to comply with the provisions of sub-
section (8), the Commissioner or the authorised officer, as the case
may be, shall seize the goods with containers or other packing D
materials, if any.

( 11) Where the goods are seized by the Commissioner or the authorised
officer under sub-section (I 0), he may, by an order in writing impose
upon the owner of such goods, where particulars of the owner of such
goods are available and the owner is a casual trader, or upon the E
person from whom goods are seized after giving such owner or person,
as the case may be, a reasonable opportunity of being heard, a penalty
of a sum not exceeding twenty-five per cent of the value of goods so
seized, and for the purposes of sub-section (I), sub-section (2) and
sub-section (3) of section 71 shall apply mutatis mutandis. p
(12) If the penalty is not paid, the seized goods may be sold in open
auction and sale proceeds thereof shall be applied in the manner, and
subject to the conditions, provided in sub-section (4), sub-section (5),
sub-section (6), sub-section (7), and sub-section (8) of Section 71 as
may be applicable for the purpose of this section." G
Section 11 is a charging section in respect of all sales of a 'casual
trader'. Sub-section (1) thereof opens with a non-obstante clause, gives it
over-riding effect over other provisions of the Act and mandates that a casual
trader shall be liable to pay tax on all his sales in West Bengal of goods,
other than the excluded goods, brought by him into West Bengal from any H
682 SUPREME COURT REPORTS (2003] 2 S.C.R.

A place outside West Bengal or on all his sales in West Bengal of goods
procured by him otherwise than by way of purchase from a person other than
a registered dealer. The proviso is not relevant for our purpose.

The Explanation to sub-section (I) says that where a transporter or an
owner or a lessee of a warehouse, deemed to be a casual trader in respect of
B any goods referred to in sub-section (I), is found to have disposed of such
goods, the disposal of such goods shall be deemed to have been made by
way of sale by him in West Bengal, unless he proves to the contra with
satisfactory evidence. It is this Explanation which has been the subject-matter
of a lengthy debate. It is contended by Mr. Yashank Adhyaru that except to
C the extent the provision of clause 29-A of Article 366 of the Constitution of
India provides for a deemed sale, no State Legislature can create a fiction to
treat an:9 other transaction as sale and, therefore', the disposal of the goods
by a. casual trader cannot per se be treated as sale of the goods and he cannot
be put to onerous task of proving a negative fact that the disposal of the
goods was not by way of sale. This contention, though attractive, lacks
D substance. It will be apposite to notice here Section 4 of the Indian Evidence
Act, 1872, which defines, inter alia, the expres:;ions "may presume" and
"shall presume". The expression 'may presume' postulates whenever it is
provided by the Evidence Act that the court may presume a fact, it will
regard such fact as proved, unless and until it is disproved, or may call for
E proof of it; but the expression 'shall presume' implies, whenever the Evidence
Act says that the court 'shall presume' a fact, it shall regard such fact as
proved, unless and until it is disproved. The statutory presumption incorporated
in Explanation to sub-section (1) of Section 11 is in the nature of the second
category of presumption. The deeming provision embodied in the Explanation
does not extend the meaning of sale to every disposal of goods. It is attracted
p· when a transporter or an owner or a lessee of a warehouse is unable to
account for the disposal of goods; the fact of disposal Of the goods in question
having been established, the statutory presumption which is rebuttable
presumption, would apply and the disposal of goods shall be deemed to be

G
by way of sale;- it will be open to such a person to rebut the presumption.
Raising of such rebuttable presumption is a normal legislative practice and
no invalidity can be attributed to the same. It will be wholly misconceived,
-
)

in our view, to treat the statutory presumption incorporated in the Explanation
as extending the definition of 'sale' in clause 29-A of Article 366 of the
Constitution. Indeed there can be no analogy between the definition of deemed
sale incorporated in clause 29-A of Article 366 of the Constitution and the
H statutory presumption incorporated in Explanation to sub-section (I) of Section
I

-(
\
STA TE v. E.I.T.A. INDIA LTD. [SYED SHAH MOHAMMED QUADRI, J.]683

11. For these reasons, we cannot sustain the finding of the Tribunal. We hold A
that the said Explanation is valid in law and the challenge to its invalidity is
misconceived and unsound.

In Sodhi Transport Co. and Ors v. State of Uttar Pradesh and Ors.,
(1986] 2 SCC 486, Section 28-B of the Uttar Pradesh Sales Tax Act, 1948
was assailed as unconstitutional. It enacts a rebuttable presumption on the B
failure of a driver or other person in charge of vehicle carrying the goods to
deliver the pass to the officer in charge of the check post or barrier before
his exit from the State. It says, "it shall be presumed" that the goods were
sold within the State. Upholding the constitutional validity of the said
provision, it was observed that as a rebuttable presumption, it had the effect C
of shifting the burden of proof. The Court has pointed out that the authority
concerned before levying sales tax arrives at the conclusion by a judicial
process that the goods have been sold inside the state and in so doing, relies
upon the statutory rule of presumption contained in Section 28-B of the Act
which may be rebutted by the persons against whom action is taken under
Section 28-B. The person concerned has opportunity to displace the D
presumption by leading evidence, therefore, there is no unconstitutionality in
it.

It is provided in sub-s_ection (2) that the levy of tax payable by a casual
trader shall be at the rate referred to in clauses (a), (b), (d), (e), (f), (g) or (h),
as the case may be, of sub-section (I) of Section 17. Sub-section (3) says that E
the tax payable under Section 11 shall be determined, collected and recovered
in such manner and by such authority and as may be prescribed,
notwithstanding anything contained in Section 46. The mandate contained in
sub-section (4) is that no person shall bring into West Bengal any goods
(other than the excluded goods), except in accordance with the restrictions F
and conditions provided in sub-section (5).

A plain reading of the impugned provisions of sub-section (5) of Section
11, quoted above, shows that it incorporates the restrictions and' conditions,
- subject to which such goods can be brought into West Bengal. A detailed
procedure outlining the obligations of the transporter or procurer of goods is G
laid down. The fiat contained therein is that every person transporting in a
road vehicle goods, other than the excluded goods, brought by him into West
Bengal or goods procured by him, other tham the excluded goods, otherwise
than by way of purchase, from a person other than a registered dealer, shall
stop the vehicle, on interception by any person appointed under sub-section
(I) of Section 3 and authorised by the Commissioner in that behalf (referred H
684 SUPREME COURT REPORTS [2003] 2 S.C.R.

A to as the authorised person in this section) and produce, on demand before
that officer, invoice, challan, transport receipt, consignment note or docttm1:nt
of like nature in respect of such goods and also furnish the name, address and
number of certificate of registration of the consignor or the consignee, if
registered. If, however, the consignor or the consignee is not registered, the
requirement to furnish any number of certificate of registration would be
B incapable of compliance. The authorised officer has to immediately allow
movement of the vehicle on he being satisfied that such goods are being
transported by a person who is not a casual trader liable to pay tax under that
section; he is empowered to detain such vehicle for a period not exceeding
twenty four hours for the purposes of sub-section (7) and (8) of that section,
C only if it appears to him that the goods are being transported by a casual
trader or by some other person on his behalf.

A careful reading of sub-section (7) makes it clear that the Commissioner
or any person appointed under sub-section (I) of Section 3 to assist him, on
being satisfied that a casual trader may become liable to pay tax under sub-
D section( I) thereof in respect of any goods, may with a view to secure payment
of tax that may become due upon determination under sub-section (3) and for
reasons to be recorded in writing, demand from such casual trader an amount
in advance equivalant to the amount of tax that may become due from him
after determination, or security for an equivalent amount after taking into
E consideration the saleable value of such goods. It does not postulate payment
of advance tax. What it aims is an amount in advance equivalent to the
amount of tax that may become due from a casual trader or security for an
equivalent amount depending upon the saleable value of the goods in question.
There is thus a clear nexus between the amount in advance or security and
the levy of impost on the casual trader. The provision is meant to ensure
F collection of tax. Sub-section (8) provides for payment of the amount in
advance or the security, if any, referred to in sub-section (7) by a casual
trader on demand under sub-section (4) at the time of bringing any goods,
except those specified in Schedules I and IV or those notified under Section
I 0(2) of the Act, for being adjusted with the amount of tax due from him and
for refund after due adjustment in the prescribed manner.
G
It is, thus, clear that sub-sections (3), (4), (5), (6), (7) and (8) are part
of the same scheme aimed at prevention of evasion of tax payable under the
Act. sub-sections (I 0) and ( 12) are consequential provisions. Sub-section
(IO) empowers the Commissioner or the authorised officer to seize the goods
with containers or other packing materials, if any, when he has reason to
H believe contravention of the restrictions and conditisfls provided in sub-sections
I
.{

STA TE v. E.I.T.A. INDIA LTD. [SYED SHAH MOHAMMED QUADRI, J.]685

(4) and (5) or non-compliance of sub-section (6) and (8). In the case of A
seizure of goods under sun-section (I 0), imposition of penalty is authorised
under sub-section (I I). Sale of the seized goods in open auction on failure
to pay the penalty is dealt with in sub-section ( 12). It is a common ground
that these sub-sections stand or fall along with sub-section (5), (7) and (8).
We have indicated above that the impugned sub-sections of Section 11 are B

-·· enacted to prevent evasion of tax payable under the Act. The main challenge
against those provisions is on the ground of legislative competence.

On the issue of legislative competence, we shall refer to Entry 54 of
List II of the Seventh Schedule to the Constitution which is the field of State
legislation for imposing taxes on the sale or purchases of goods, other than C
newspaper. This Entry is subject to the provisions of Entry 92-A of List I of
the Seventh Schedule to the Constitution. It is well-settled that the State
Legislature, while providing for levy of impost, has power to provide for
1' incidental matters, including measures for prevention of evasion of tax.

In Mis. Nand Lal Raj Kishan v. Commissioner of Sales Tax Delhi and
Anr., [1962] 1 SCR 283, the validity of Section 8-A of the Bengal Finance D
(Sales Tax) (Delhi Amendment) Act, 1956 was assailed :n a writ petition
field under Article 32 of the Constitution. That provision enables the
Commissioner
. of Sales Tax to demand security from dealers for. payment of
tax. The contention of the petitioner was that the section conferred undefined,
unlimited and unrestricted power to the Commissioner and that there was no E
limit fixed for the amount of security. It was also urged that no enquiry was
contemplated before fixing the amount of security. The validity of Section 8-
A was upheld on the view that it did not give any unlimited or unrestricted
power to the Commissioner and that it was subject to the condition that it
must appear to him to be necessary to demand security for the proper
realisation of: tax. It was observed that the power to levy tax included the F
power to impose reasonable safeguards for collecting it and, therefore,
demanding security for the proper payment of tax was neither an arbitrary
- condition nor an unreasonable restriction. In our view, this judgment does
not help the respondents for reasons more than one. Firstly, Section 8-A of
that Act, as it stood at that time was upheld by the Constitution Bench as G
valid and secondly, in the instant case, the impugned provisions embody
ample safeguards for a transporter of goods as also for an owner or lessee of
a warehouse, enquiry is contemplated for determination of the amount in
advance or security authorised to be demanded which, in any event, cannot
be more than the amount of tax that could be levied in respect of the goods
in question on such a person. It supports the case of the appellant. H
686 SUPREME COURT REPORTS [2003] 2 S.C.R.

A In Balaji v. Income-tax Officer, Special Investigation Cric/e, [ 1962) 2
SCR 983, the petitioner challenged the provisions of Section 16(3)(a)(i) of
the Income Tax Act, 1922 in this Court under Article 32 of the Constitution
of India. The petitioner and his wife started a business in partnership and
admitted their minor sons to it. While computing the total income of the
petitioner for the purpose of assessment to income tax, the Income Tax Officer
B included the share of the income of the wife and the minor sons under the
said provision. It was held that Entries in the legislative lists were not powers
but fidds of legislation and that the widest possible, import and significance
-
should be attached to them. So interpreting, it was observed that the relevant
Entry must cover such legislation- as the impugned provision intended to
C prevent the evasion of tax; it is a settled proposition that in matters of taxation,
the power to legislate includes the incidental power to legislate for evasion
of tax for which the Entry provides.

In Khyerbari Tea Co. Ltd and Anr. v. The State of Assam, [I964] 5
SCR 975, the question before the Constitution Bench was, whether the Assam
r
,I
(
D Taxation (on Goods carried by Road or on Inland Water-ways) Act [Assam
Act X of 196 I) was constitutionally valid. It was held that the entries in the
three ijsts in the Seventh Schedule must be given the widest possible
interpretation and that the power conferred on the Legislature to levy tax
mus\ be widely construed so as to include the power to select the taxable
articles to fix the rates, to prescribe the machinery for recovery, to prevent
E evasion and to prescribe the procedure for determining the amount payable
by any individual. It was added that Entry 56 of List II in giving the Legislature
the power to enact the impugned Act, required that the tax must be levied
only against the owner of the goods that were carried or against persons who
carried them. If the tax was really levied on goods carried, the Legislature
p was free to prescribe the machinery for its recovery. In that view of the
matter, it was held that sub-sections (I) and (2) of Section 3 of that impugned
Act, which imposed the tax and made the producer liable to pay the same
could not, therefore, be impugned on the ground of legislative imcompetence.

In Tripura Goods Transport Association and Anr. v. Commissioner of
G Taxes and Ors., [1999] 2 sec 253, Sections 29, 30, 32, 36-A, 38-B and 2(b)
of the Tripura Sales Tax Act 1976 [98 of 1976] were assailed on the ground
of lack of legislative competence. Those provisions required the appellants
therein to obtain a certificate of registration and to comply with various other
formalities prescribed under the Act and the Rules made thereunder. A learned
Single Judge of the Gauhati High Court had dismissed the writ petition. That
H order was upheld by the Division Bench of the High Court in appeal. On
STATE v. E.J.T.A. INDIA LTD. [SYED SHAH MOHAMMED QUADRI, J.]687

further appeal to this Court, it was contended that being transporters, they A
were not trading in sale or purchase of any goods and therefore they could
not be held to be dealers within the meaning of the Act and as such the
impugned provisions which laid certain obligation on them were beyond the
legislative competence of the State Legislature under Entry 54 of List II of
the Seventh Schedule to the Constitution. Negativing the contention it was B
held that if the Legislature makes any ancillary or subsidiary provisions
which incidentally transgresses over its jurisdiction for achieving the object
of such legislation, it would be a valid piece of legislation. The entries in a
legislative list should not be read in a narrow or pedantic sense but must be
given their fullest meaning, the widest amplitude and be held to extend to all

- ancillary and subsidiary matters which can fairly and reasonably be
comprehended. Thus, the provision incorporating mechanism to seal all
loopholes of escape and casting obligation on someone to perform certain
acts to achieve this objective was held to be a valid provision.
C

In State of Rajasthan and Anr. v. DP Metals. [2002] I SCC 279, the
provisions of the Rajasthan Sales Tax Act, 1994 [22 of 1995] for levy of D
penalty on person in charge of goods for non-compliance with certain statutory
provisions or for submission of false or forged documents or declaration
were questioned as being beyond the legislative competence of the State.
Rejecting the contention, it was laid down that Entry 54 of List II of the
Seventh Schedule to the Constitution has to be construed liberally. It has E
been observed that the settled position in law is that provisions to check
evasion of tax are within the legislative competence of the States under Entry
54 of List II, therefore provisions which made the imposition of tax efficacious
or to prevent evasion of tax are within the legislative competence of the
State.

From the above discussion it follows that the afore-mentioned impugned
F
provisions which are intended to prevent the evasion of tax payable under the

- Act are within the legislative competence of the State and are intra vires
Entry 54 of List II of the Seventh Schedule to the Constitution.

Insofar as sub-sections (10) and (I I) are concerned, it has already been G
noted above that they stand or fall along with sub-sections (7) and (8) of the
said section. We have held above that sub-sections (7) and (8) are valid and
therefore, consequentially, no illegality can be attributed to sub-sections (IO)
and (11). They have to be upheld as constitutionally valid provisions.

The' provision of the Act which remains to be considered is sub-section H
)

688 SUPREME COURT REPORTS [2003] 2 S.C.R.

A (4) of Section 14. Whereas Section 11 deals with levy to tax on sales by
casual trader ,Section 14 is a charging section in respect of purchases made
by a casual trader. It directs that, notwithstanding anything contained elsewhere
in the Act, a casual trader shall be liable to pay tax on every purchase of
goods, other than those specified in Schedule IV in West Bengal. This liability
is subject to the provisions of sub-section (3) of Section 14. The purchases
B which are exempted are specified under the proviso to sub-section (!). Sub-
section (2) speaks of rate of tax. Sub-section (3) deals with a situation where
a casual trader makes regular purchases. Sub-section (4) which is impugned
.-----
reads as under:

"Every person transporting in a road vehicle goods, other than those
c specified in Scheduled I or Schedule IV, purchased by him in West
Bengal on his own account or on behalf of any other person shall, on
interception by any person appointed under sub-section (I) of Section
3 and authorized by the Commissioner in this behalf (hereinafter
referred to in this section as the authorised officer), stop the road
D vehicle and produce on demand, before such authorized officer,
invoice, challan, transport receipt or consignment note or c.ocument
of like nature in respect of such goods and shall also furnish the
name, address and number of certificate of registration of consignor
or consignee, if registered, and thereafter,--

E (a) if the authorized officer is satisfied that the person transporting
the goods is not liable to pay tax under sub-section (!), he shall
immediately allow movement of tlie road vehicle, or

(b) if the authorized officer is satisfied that the goods are being
transported by a casual trader or a person on behalf of a casual
F trader, he may detain the road vehicle for a period ordinarily not
exceeding twenty four hours for the purposes of sub-section (6)."

A perusal of sub-section (4) shows that every person who is transporting
in a road vehicle goods, other than the excluded goods, purchased by him in
West Bengal on his own account or on behalf of any other person is required,
G on interception by any person appointed under sub-section (l) of Section 3
and authorised by the Commissioner in that behalf, (referred to as the
authorised officer in this section) to stop the vehicle and produce, on demand,
before such authorised officer invoice, challan, transport receipt or consignment
note or document of like nature in respect of such goods; further, he is also
obliged to furnish the name, address and number of certificate of registration
H of the consignor or the consignee, if registered. But if the consignor or the
STA TE v. E.I.T i\. INDIA LTD. [SYED SHAH MOHAMMED QUADRI, J.)689

consignee is not registered, the question of furnishing number of certificate A
of registration does not arise. In such an event, two courses are open to the
authorised officer. The first is that if the authorised officer is satisfied that the
person transporting the goods is not liable to pay tax under sub-section (I),
he has to allow the movement of the vehicle immediately. And the second is
that, if he is satisfied that the goods are being transported by a casual trader B
or a person on behalf of a casual trader he has the power to detain the

- vehicle for a period not exceeding twenty four hours for the purposes of sub-
section (6) which provides for determination and collection of tax in the
manner prescribed. It requires the casual trader to pay the tax in the prescribed
form. Therefore, it follows that sub-section (4) is concerned with the detention
of the vehicle for purposes of assessment and recovery of tax. This provision C
-·- is also an anti-evasion of tax provision and over-rides Section 46. For the
reasons above-mentioned, we do not find any illegality in sub-section (4) of
Section 14 of the Act.

We may add that the impugned provisions of sub-section (5,) (7), (8)
of Section 11 and sub-section (4) of Section 14 are broadly akin to the D
provisions in the Bengal Finance (Sales Tax) Act, 1941, the validity of which
was upheld by us in Civil Appeal No. 8180 of 1995 by order dated February
25, 2003.

No separate arguments were addressed in regard to the invalidity of the
Rules. In the view we have taken in upholding the provisions of the Act, the E
impugned Rules, namely Rules 172, 173, 174 and 188 and Forms 28 and 31
are also to be upheld and they are, accordingly, upheld. The orders under
challenge in regard to the declaration of the Rules as invalid are, therefore,
set aside.

For all these reasons, we are unable to sustain the orders of the Tribunal F
under challenge and they are, accordingly, set aside.

The Civil Appeals are, accordingly, allowed.

No order as to costs.

Civil Appeal Nos.8182/1995 and 11649-11650/1995: G
In view of the order passed by this Court in Civil Appeal No.8180 of
1995 on February 25, 2003, these appeals are also allowed.

No order as to costs.

K.K.T. Appeals allowed. H