# CALCUTTA IRON MERCHANTS v. COMMISSIONER OF COMMERCIAL TAXES AND ANR

- **Citation:** [1996] 2 S.C.R. 1030
- **Court:** Supreme Court of India
- **Decided:** 1996-02-23
- **Case number:** Civil Appeal No. 3858 of 1996
- **Bench:** B.P. Jeevan Reddy, K.S. Paripoornan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/calcutta-iron-merchants-v-commissioner-of-commercial-taxes-and-anr-13821
- **Pages:** 5

## Headnote

Sales tax:
Be;;gal Finance (Sales tax) Act, 1941/Rules.
S.4B/Rule 89A-Dealers purchasing and transp01ting iron and steel--
Obligation on the purchasers/transporters to be in possession of documents
relating to the goods, to be produced whenever demanded by the appropriate
officer-No such obligation on seller/consignor to issue the declaration which
is one of the said document-Tribunal's direction that if the declaration could
D not be produced the purchasers/transporters be allowed' to establish that
despite his demanding, the seller did not issue the same-ff satisfied with this
the approp1iate auth01ity should not seize the goods or impose penalty-Held
in view of the meaning and purp01t of Rule 89(2) the directions becon1es
unnecessary and hence deleted.
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F

## Text

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CALCUTTA IRON MERCHANTS
v.
COMMISSIONER OF COMMERCIAL TAXES AND ANR.
FEBRUARY 23, 1996
[B.P. JEEVAN REDDY AND K.S. PARIPOORNAN, JJ.)
Sales tax:
Be;;gal Finance (Sales tax) Act, 1941/Rules.
S.4B/Rule 89A-Dealers purchasing and transp01ting iron and steel--
Obligation on the purchasers/transporters to be in possession of documents
relating to the goods, to be produced whenever demanded by the appropriate
officer-No such obligation on seller/consignor to issue the declaration which
is one of the said document-Tribunal's direction that if the declaration could
D not be produced the purchasers/transporters be allowed' to establish that
despite his demanding, the seller did not issue the same-ff satisfied with this
the approp1iate auth01ity should not seize the goods or impose penalty-Held
in view of the meaning and purp01t of Rule 89(2) the directions becon1es
unnecessary and hence deleted.
E
F
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3858 of
1996.
From the Judgment and Order dated 17.6.94 of the West Bengal
Taxation Tribunal, Calcutta, in Case No. R.N. 296 (T)/92.
A Subba Rao, for the Appellants.
Santosh Hedge, D.K. Sinha, J.R. Das, for Sinha & Das for the
Respondents.
G
The following Order of the Court was delivered :
Leave granted.
Heard counsel for the parties.
H
Section 4B of the Bengal Finance (Sales Tax) Act, 1941 says :
1030
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--
CALCUTTA IRON MERCHANTSv. COMMR OF COMMERCIAL TAXES 1031
"No person shall transport from any railway station, steamer staA
tion, airport, post office, or any other place whether of similar
nature or otherwise, notified in this behalf by the State Government, any consignment of any notified goods exceeding such quantities and except in accordance with such conditions as may be
prescribed. Such conditions shall be made with a view to ensuring B
that there is no evasion of tax by this Act."
Sub-section (2) empowers the State Government to prescribe the conditions for regulating transport of notified goods from any place, other than
those referred to in sub-section (1) with a view to ensuring that there is no
evasion of tax imposed by this Act.
C
Pursuant to the above provisions, rules have been made by the State
Government. Rule 89A and in particular sub-rule (2) thereof is relevant
for our purpose. It reads:
"(2) Where such consignment is despatched from any place within D
West Bengal and the value whereof exceeds rupees twenty five
thousand --
(a) any person transporting such consignment shall carry with
him a consignment note or delivery note, sale bill or cash
memo or similar document and a written declaration in dupliE
cate duly signed by the consignor or his authorised agent in
the form mentioned in the Schedule appended to this subrule in respect of such consignment, and shall, on demand by
the officer referred to in the proviso to sub-rule (1) of Rule
70A, produce the said documents and declaration and the F
said officer, on being satisfied about the correctness of the
documents and the declaration, shall only allow the movement of such quantity of notified goods mentioned in that
declaration and conforming to the description given therein
and to other documents produced. He shall retain one copy G
of the declaration and return the second copy on which he
shall endorse the date on which the consignment is
transported and shall sign, seal and date such endorsement;
(b) If the declaration referred to in clause (a) in respect of
any consignment has already been submitted to an officer H
1032
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SUPREME COURT REPORTS
[1996] 2 S.C.R.
referred to in the proviso sub-rule (1) of rule 70A any person
transporting such consignment shall, on demand by such
officer at any subsequent place, produce the countersigned
and sealed copy of the aforesaid declaration.
SCHEDULE
Declaration
Declaration No ................. .
Date ................................... .
I/We declare that the following consignment of notified goods
is despatched from a place within West Bengal :
1. Name and address of the consignor
2. (a) Name and address of the consignee.
(b) Registration Certificate/Certificate No. of the consignee (if registered or certified under any of the Sales Tax
Acts).
3. Place of despatch.
4. Destination.
5. Description of consignment
6. Quantity
7. Weight
8. Value
9. Consignor's Bill/Cash Memo/other document (specify) No.
and date.
10. Consignment ot Delivery Note No. and date.
I/We declare that I/We hold/do not hold Registration Certificate/Certificate No ......... under the Bengal Finance (Sales Tax)
H
Act, 1941/West Bengal Sales Tax Act, 1954.
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•.
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CALCUITA IRONMERCHANTSv. COMMR. OF COMMERCIAL TAXES 1033
l(We have/have not manufactured the goods in West BenA
gal/Not transported the goods from outside West Bengal.
The above statements are true to the best of my/our knowledge
and belief.
Status of the declarant B
Signature
N.B. (1)
This declaration should bear a consecutive issue number of the office of the consignor giving the declaration
and a true copy of the same should be retained by him.
(2)
Strike out words or phrase not applicable.
(Inserted by Notification No. 1863 F.T. dated 25.4.1985 w.e.f.
1.5.1985)"
c
According to clause (a) of sub-rule (2), a person transporting goods D
shall carry with him three sets of documents, viz., (i) consignment note or
delivery note (ii) sale bill or cash memo or similar document and (iii) a
written declaration in duplicate duly signed by the consignor or his
authorised agent in the form mentioned in the Schedule to the sub-rule in
respect of such consignment. These documents are required to be E
produced by such transporter on demand by any appropriate officer. The
declaration form contained in the sub-rule says that the declaration has to
be signed by the consignor or his authorised agent and shall contain the
specified particulars. It is this declaration which along with other
prescribed documents, a person transporting such goods has to produce as
and when demanded by the appropriate officer.
F
We are concerned herein with persons who are dealers in iron and
steel. Their case is this: Iron and steel is taxable at the first point of sale.
Iron and steel is manufactured by major manufacturing units. When they
sell the same, they pay tax thereon. The appellants are only purchasers and
they transport goods purchased by them in the course of their business. G
They complain that under the rules, an obligation is placed only upon the
purchasers/transportors to be in possession of the aforementioned three
sets of documents and to produce them whenever demanded by the appropriate officer but no such obligation is placed upon the sellers/consignors. Consequently, the sellers are not issuing the declaration as H
1034
SUPREME COURT REPORTS
[1996] 2 S.C.R.
A
contemplated by Rule 89A(2). The appellants are, therefore, not in a
position to produce the declaration when demanded by the authorities, on
which account they are being to harassment and financial loss.
B
Sri A. Subba Rao, learned counsel for the appellants, reiterates the
grievance that the ·rule which does not place an obligation upon the
seller/consignor of the goods to issue the aforesaid written declaration in
the prescribed form but places an obligation upon the consignee/purchaser
to carry it, is unreasonable and oppressive. We do not think this grievance
is well-founded. The Rule squarely paces an obligation upon the consignor
to issue a written declaration in duplicate in the prescribed form, signed
C by him or by his authorised agent. The rule places a statutory obligation
upon the consignor/vendor to issue and the consignee/purchasers to carry
the declaration form. All this is meant to check and prevent evasion of
Sales Tax and no dealer can make any legitimate grievance against it.
We, therefore, dispose of this appeal with· the above direcD tions/clarifications.
We may also clarify that the direction made by the Tribunal in
Paragraph 16 of its judgment to the effect - "We, however, like to direct
that where a transporter or consignee fails to produce a written declaration
E
as required by rule 89A(2), he should be allowed to establish that he had
demanded such a declaration from the selling dealer or the consignor, but
the latter did not issue or refused to issue the same. If the appropriate
authority is satisfied that th~ transporter or consignee had, in fact, not
negligent in the matter, and the consignor or selling dealer had not issued
or refused to issue the declaration, inspite of request for the same, there
F
should be neither any seizure of Iron and Steel declared goods nor imposition of penalty on the sole ground that the declaration has not been
produced in terms of rule 89A(2)" - is not only impractical but is also likely
· to lead to several complications. In any event, in the light of the clarification
made by us with respect to the meaning and purport of rule 89A(2), the
G above direction becomes unnecessary and is accordingly deleted.
The appeal is disposed of accordingly. No costs.
G.N.
Appeal disposed of.
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