JUDGMENT A.N. Verma, J.
1. The petitioner assails the validity of the order dated October 29, 1991, passed by the Sales Tax Officer, Special Investigation Branch ("SIB", for short), Allahabad, directing the petitioner to furnish security in the sum of Rs. 1,50,000 towards the release of the chassis of a truck which had earlier been seized by him in the purported exercise of powers under Section 28-A of the U.P. Sales Tax Act, 1948. The ground stated for seizure shortly is that the petitioner had obtained transit pass in form XXXIV on the false representation that the chassis was in transit through the State of Uttar Pradesh and was being taken to his residence at Rewa in Madhya Pradesh whereas on enquiry it was found that the real importers of the chassis were Messrs. Prayag Udyog (Pvt.) Ltd., Allahabad, which was bringing the same for sale within the State without obtaining the declaration forms XXXI and XXXII. Section 28-A of the U.P. Sales Tax Act was thereby clearly breached.
2. The relevant facts may be briefly summarised thus : Messrs. Prayag Udyog (Pvt.) Ltd., Allahabad, is a registered dealer carrying on the business of buying and selling chassis. On September 2, 1991, a chassis No. HR-05A/ 0312-B reached the sales tax check-post at Bhopura district, Ghaziabad on its way from Karnal. The driver, Mahendra Kumar, produced a temporary registration certificate and an invoice along with an application for issue of a transit pass in form XXXIV. Though these papers, prima facie, showed that the chassis was on its way to Rewa, Madhya Pradesh, and the name of the petitioner was shown as the consignee, a little interrogation by the Sales Tax Officer at the check-post revealed that the real truth was being suppressed. The driver gave evasive replies from which the Sales Tax Officer concluded that the story that the chassis was in transit was a pure concoction. The chassis was accordingly detained by the Sales Tax Officer who declined to issue transit pass in form XXXIV. The Sales Tax Officer issued a show cause notice to Messrs. Prayag Udyog (Pvt.) Ltd. why the chassis should not be seized for violation of Section 28-A not having been accompanied by form XXXI prescribed under Section 28-A. As no reply was filed by Messrs. Prayag Udyog (Pvt.) Ltd., the Sales Tax Officer seized the chassis and demanded security for its release.
3. Interestingly, against the seizure, instead of Messrs. Prayag Udyog (Pvt.) Ltd., the petitioner filed a representation before the Assistant Commissioner, Check Post, under Section 13-A(6) of the U.P. Sales Tax Act claiming that the chassis had been purchased by him and was in transit to Rewa (Madhya Pradesh). Taking the apparent state of things emerging from the temporary licence as the real state of facts, the Assistant Commissioner, Check Post, directed the release of the chassis without any security and also directed the Sales Tax Officer, Check Post, to issue transit pass to the petitioner in form XXXIV. However, the Assistant Commissioner directed the Sales Tax Officer, Check Post, to inform the Sales Tax Officer, S.I.B., Allahabad, to make a thorough enquiry into the matter at his end for the purpose of ascertaining whether the real importers of the chassis were Messrs. Prayag Udyog (Pvt.) Ltd. and to take appropriate action against them, if necessary. Pursuant to that direction, the Sales Tax Officer, Bhopura Check Post, made an endorsement on the transit pass issued by him on form XXXIV expressing his doubt as to the genuineness of the documents accompanying the chassis and requesting the Sales Tax Officer, S.I.B., Allahabad, to make an enquiry into the whole affair from Messrs. Prayag Udyog (Pvt.) Ltd., who, according to the form, were the real importers.
4. On receipt of that information from the Sales Tax Officer, Bhopura Check Post, the Sales Tax Officer, S.I.B., Allahabad, made an enquiry from Messrs. Prayag Udyog (Pvt.) Ltd. on September 21, 1991 and recovered from it form XXXIV in respect of the specified chassis from the premises of Messrs. Prayag Udyog (Pvt.) Ltd. The Sales Tax Officer, S.I.B., Allahabad, examined the books of account maintained by Messrs. Prayag Udyog (Pvt.) Ltd. as also the cash receipt alleged to have been issued to the petitioner for the chassis and found that the address given therein was initially noted as "Saini, Allahabad" but was subsequently manipulated as "Civil Lines, Rewa". Similar manipulation was alleged to have been found in the cash book maintained by Messrs. Prayag Udyog (Pvt.) Ltd. The cash receipt and the cash book were accordingly seized from the custody of Messrs. Prayag Udyog (Pvt.) Ltd. On inspection carried out on subsequent dates the Sales Tax Officer, S.I.B., Allahabad, recorded the statement of the petitioner who was also present at the premises of Messrs. Prayag Udyog (Pvt.) Ltd. The petitioner reiterated that he was a resident of Civil Lines, Rewa and produced a photostat copy of the ration card in support of that allegation. The Sales Tax Officer, S.I.B., Allahabad, got an enquiry made from his counterpart at Rewa and found that somebody else was residing at the address given by the petitioner at Rewa and that the ration card produced by him was also fake. The petitioner was also called upon to produce the original cash receipt and other material to support that he was resident of Rewa. Even after seeking several adjournments the petitioner did not furnish any document nor could he substantiate that he was a resident of Rewa.
5. After the Sales Tax Officer, S.I.B., Allahabad, had carried a thorough enquiry he issued a show cause notice on September 26, 1991 fixing October 1, 1991. Despite several adjournments obtained by him on October 1,1991, October 7, 1991, October 10,1991 and October 21,1991, no reply to the show cause notice was given by the petitioner. Instead the petitioner filed a writ petition in this Court on October 22,1991 against the show cause notice which was dismissed summarily on the ground that it was premature and the petitioner had ample remedy under the U.P. Sales Tax Act. The Sales Tax Officer, S.I.B., was, however, directed not to postpone the matter beyond October 29, 1991 which, the court was informed, was already fixed for the disposal of the matter. The Sales Tax Officer thereupon passed the impugned order on October 29, 1991, on the finding that Messrs. Prayag Udyog (Pvt.) Ltd. were the real importers of the chassis and not the petitioner and that as the chassis was being brought by them for sale within the State without a declaration in form XXXI it was liable to be seized. The Sales Tax Officer, S.I.B., however, directed the chassis to be released on the petitioner's furnishing cash security in the sum of Rs. 1,50,000.
6. The impugned action was assailed by Sri Bharatji Agarwal, the learned counsel for the petitioner, principally on the ground that the Sales Tax Officer had no jurisdiction to seize the vehicle even before it reached the check-post as the petitioner had been issued transit pass in form XXXIV under Section 28-B of the U.P. Sales Tax Act. It was urged that once a transit pass in form XXXIV is issued at the entry check-post the sales tax authorities have no power to seize the chassis. The vehicle, it was argued, must be permitted to go outside the State on the strength of the transit pass through the exit check-post and that the only power left with the authorities is to stop the vehicle at the exit check-post and recover the sales tax in respect thereof in case they find any flaw on the presumption contemplated under Section 28-B of the U.P. Sales Tax Act to the effect that the chassis was sold within the State of Uttar Pradesh. It was also submitted that once the goods were released without security under the orders of the Assistant Commissioner, Check Post, under Section 13-A(6), the same could not be seized again subsequently.
7. We start with the first contention canvassed in support of the petition. In our opinion, the submission is far too broadly stated to merit our approval. We cannot agree that mere issuance of transit pass in form XXXIV deprives the authorities of the power to seize the vehicle even if they discover that the transit pass was obtained on a fraudulent misrepresentation that the goods were intended to pass through the State without any transaction of sale taking place therein and even if the authorities discover that the goods were imported, as in the present case, for sale within the State. Section 28-A(1) of the U.P. Sales Tax Act mandates that any person who intends to bring, import or otherwise receive into the State from outside any goods liable to tax under the U.P. Sales Tax Act in connection with business, must obtain the prescribed declaration forms, i.e., forms XXXI and XXXII. Sub-section (6) of Section 28 authorises the assessing authority to detain any goods if he finds upon search or inspection that the person transporting or attempting or abetting to transport any goods without being covered by proper and genuine documents referred to in that section. The officer is also authorised to exercise all such powers as are mentioned in Sub-sections (2), (6) and (8) of Section 13-A of the Act, i.e., the power to seize the stocks and to indicate the amount not exceeding such amount as would be sufficient to cover the penalty likely to be imposed on deposit thereof either in cash or by bank draft, the goods seized may be released.
8. We are clearly of the opinion that the operation of the provisions of Section 28-A does not stand excluded merely because a dealer happens to have obtained a transit pass in form XXXIV at the entry check-post on the pretext that the goods are in transit to a place outside the State when, in truth and reality, the goods are intended to be brought into the State for the purpose of sale therein. Indeed, the acceptance of the petitioner's contention that issuance of form XXXIV arms the dealer with some kind of immunity from action under Section 28-A would lead to serious results and large scale abuse of transit passes, quite apart from wholesale evasion of sales tax.
9. We also cannot agree with the sweeping submission that even if the authorities come to discover that the goods which entered the State on the strength of a false transit pass in form XXXIV for sale within the State, they cannot seize the same until the petitioner choose to take them to the exit check-post. The department's case is that the goods were never intended to be taken beyond the State, having been imported by Messrs. Prayag Udyog (Pvt.) Ltd. for sale within the State.
10. The conclusion we have reached is also supported by Rule 84(3) of the U.P. Sales Tax Rules, 1948 which authorises the concerned officer to order seizure of the goods, if he has reasons to believe that the same are not covered by one or more of the documents under Sub-rule (4) of Rule 83 or that such documents are false, bogus, incorrect, incomplete or invalid. Form XXXIV is also one of the documents mentioned in Sub-rule (4) of Rule 83. The case of the department is that form XXXIV obtained by the petitioner was false inasmuch as the chassis was not intended to be taken outside the State. It will be convenient to have a glance at these provisions.
Rule 83(4) provides :
"4(a) The owner, driver or any other person in-charge of the vehicle or vessel shall, in respect (or referred to in) of such goods carried in the vehicle or vessel as are notified under Sub-section (1) of Section 28-A and as exceed the quantity, measure or value specified in the notification (therein), carry with him the following documents :
(i) declaration in form XXXI, or certificate in form XXXII, or transit pass in form XXXIV (hereinafter in the Rules in this Chapter referred to as 'declaration', 'certificate' or 'pass', respectively), as the case may be, in duplicate ;
(ii) cash memo, bill of sale or challan ;
(iii) a trip sheet in triplicate ;
(b) The owner, driver or any other person in-charge of any vehicle or vessel shall in respect of all other goods carried in such vehicle or vessel carry with him a trip sheet in triplicate."
Rule 84 provides :
"84. Inspection of goods in transit.--(1) At every check-post or hairier or at any other place, when so required by the officer in-charge of the check-post or by an officer empowered under Section 13 or 13-A or under Rule 3-A or 4 the owner, driver or any other person in-charge of the vehicle or vessel, as the case may be, shall stop the vehicle or vessel and keep it stationary for as long as may be required by such officer. He shall also allow such officer to examine the contents of the vehicle or vessel and to inspect all documents and records relating to the goods carried, which may be in his possession or in the possession of any other person in the vehicle or vessel.
(2).........................................
(3) If on such examination the officer finds or has reason to believe that--
(a) any one or more consignments are not covered by one or more of the documents referred to in Sub-rule (4) of Rule 83, or
(b) any such document in respect of any consignment is false, bogus, incorrect, incomplete or invalid, the officer shall immediately issue a notice to the driver or person in-charge of the vehicle or vessel to show cause why the goods should not be seized.
(4) .........................................
(5) If the officer is not satisfied with the explanation furnished by the owner, driver or the person in-charge of the vehicle, he shall order the seizure of the goods and furnish a receipt to the person aforesaid in respect of the goods seized." added)
11. Read together these provisions clearly authorise the seizure of the goods in any of the contingencies contemplated by Clauses (a) and (b) of Sub-rule (3) of Rule 84. The substance of the ground stated for seizure of the chassis in the present case is that the transit pass in form XXXIV as well as the documents produced in respect thereof were false and incorrect.
12. It will thus be seen that there was no lack of power in the Sales Tax Officer to seize the chassis in view of the facts found by him upon enquiry. The seizure of the chassis as well as the demand for cash security was also in the facts and circumstances of the present case fully authorised by law. The submission of the learned counsel that the impugned action was arbitrary or illegal is, therefore, rejected.
13. Reliance was placed by the learned counsel on the decision of this Court in Sri Ram Shanker Mathur's case, [1989] 75 STC 394 (All.) decided by a Bench of this Court by its judgment dated February 21, 1989 a true copy of which is annexed to the petition as annexure 14. It is difficult to see how this case assists the petitioner. There a vehicle registered in another State was being brought by a person for his own use and the same was sought to be seized under Section 13-A for contravention of Section 28-A. The Bench ruled that before these provisions could be attracted it must be shown that the goods brought into the State were liable to tax. And as the vehicle was brought by the petitioner from another State for his own use, the same was not liable to tax. On these facts, the Bench rightly ruled that Sections 13-A and 28-A could not have any application whatsoever. With respect, there can be hardly any dispute about the proposition laid down in that case. The facts in the present case are, however, wholly distinguishable. The department's stand in the present case is that the real importer of the chassis was Messrs. Prayag Udyog (Pvt.) Ltd. and that the same was brought within the State for sale therein. The chassis was, therefore, clearly liable to tax on the facts as have been found by the Sales Tax Officer while seizing the chassis.
14. We also find no merit in the contention that once the Assistant Commissioner, Check Post, directed the issue of form XXXIV and the release of the chassis without security the same could not be seized again. A plain reading of the order passed by the Assistant Commissioner under Section 13-A(6) of the Act goes to show that the order was passed on the basis of the apparent state of things. There was the invoice and the temporary licence produced by the driver at the entry check-post at Bhopura which, prima facie, indicated that the petitioner as purchaser of the chassis was taking it to Rewa (Madhya Pradesh) via Uttar Pradesh. The Assistant Commissioner, therefore, allowed the release of the vehicle and directed the Sales Tax Officer to issue transit pass but postponed the further probe to be undertaken by the Sales Tax Officer, Allahabad, from Messrs. Prayag Udyog (Pvt.) Ltd. with a view to ascertaining whether the real importers were Messrs, Prayag Udyog (Pvt.) Ltd. It is thus obvious that the order of the Assistant Commissioner based only on the apparent state of things could not legally operate as a grant of permanent immunity from the seizure of the chassis at any subsequent point. Indeed the Sales Tax Officer, S.I.B., who has passed the impugned order was expressly left free by the Assistant Commissioner to make the necessary probe and take appropriate action against Messrs. Prayag Udyog (Pvt.) Ltd., if found necessary. The seizure of the vehicle in these circumstances could not, therefore, be assailed on this ground either.
15. Before concluding, however, we may add that the observations made herein are in relation only to the matter of seizure of the chassis and its release on the petitioner's furnishing appropriate security. The same should not, therefore, be construed as precluding an independent adjudication of the issues which may arise for consideration in the regular assessment/penalty proceedings which may be initiated in relation to the chassis in question either against the petitioner or Messrs. Prayag Udyog (Pvt.) Ltd.
16. In the result, the petition fails and is dismissed.