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CASE NO.: Appeal (civil)  2768 of 2000

PETITIONER: M/s A.B.C. (India) Ltd.                                     

RESPONDENT: State of Assam & Anr.                                         

DATE OF JUDGMENT: 04/08/2005

BENCH: S.N. Variava & Dr. AR. Lakshmanan

JUDGMENT: J U D G M E N T With Writ Petition (Civil) No. 622 of 2000  Dr. AR. Lakshmanan, J.

       In Civil Appeal No. 2768 of 2000  

This is an appeal filed against the judgment and order dated 4.1.2000 passed by  the Gauhati High Court in Writ Appeal No. 197 of 1996.  The Division Bench while  allowing the appeal filed by the State of Assam held that the controversy raised in the  matter was covered by the decision of this Court in the case of Tripura Goods  Transport Association & Anr. Vs. Commissioner of Taxes & Ors. , (1999) 2 SCC  253 and not in the case of State of  Haryana & Ors. vs. Sant Lal & Anr.  (1993) 4  SCC 380.    The respondents filed a writ petition in the High Court challenging the seizure of  books of accounts and documents made by the authorities at the offices and godowns  of the respondents under the provisions of the Assam General Sales Tax Act, 1993  (hereinafter referred to as "the Act").  The respondents have also prayed for a  declaration that Sections 42 and 44 of the Act, as ultra vires.  The short facts for the purpose of disposal of this civil appeal are as follows: The respondent is a company registered under the Companies Act engaged in  the business of transportation of goods on behalf of the customers throughout the  country.  A Bill, namely, Assam General Sales Tax Bill, 1993 was passed in the Assam  Legislative Assembly and the Bill received the assent of the Governor on 14.5.1993 and  became an Act (Assam Act No. XII of 1993), for short "the Act,1993".  This Act has  repealed all the earlier four Sales Tax Acts. Sections 42 and 44 of the Assam General Sales Tax Act, 1993 read as  under: "Section 42 :  Furnishing of information by clearing and  forwarding agent etc. \026

(1)     Every clearing, booking or forwarding agent or  any other person transporting goods who during the  course of his business handles documents of title to  goods for or on behalf of any dalal or a person holding  certificate under Section 14 shall furnish to the  prescribed authority true and complete particulars and  information and shall maintain true and complete  accounts, registers and documents in respect thereof,  and if the prescribed authority considers that such  accounts, registers and documents are not sufficiently  clear and intelligible the said authority may direct any  clearing, booking or forwarding agent or dealer or the  persons transporting goods to produce and maintain  accounts in such manner as may be required.

(2)     Such accounts shall, on demand, be produced  before the prescribed authority who may take or  cause to be taken such extracts as he may  consider necessary.

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(3)     A person transporting goods shall carry a  declaration in such form as may be prescribed,  supported by either a cash memo, a bill or a  challan, in case the movement is otherwise a  result of sale, in respect of goods which is being  transported on a goods carrier, or a vessel and  shall produce such challan, cash memo or bill  along with the aforesaid declaration on demand  before the prescribed authority.

(4)     If any clearing, booking or forwarding agent or  dalal or person transporting goods contravenes  the provisions of sub-section (1) of Section 3 in a  manner which is likely to lead to evasion of any tax  payable under this Act, the prescribed authority  may, without prejudice to any action under  Sections 61 and 62 of this Act on the charge of  abatement, after giving the person concerned an  opportunity of being heard, direct him to pay by  way of penalty, an amount which shall be equal to  three times the amount of tax calculated on the  value of goods in respect of which no particulars or  information or correct particulars or information  has been furnished under sub-section (1) or no  cash memo or bill or challan has been produced  before the prescribed authority under sub-section  (3) or rupees one thousand whichever is greater:  

Provided that notwithstanding anything contained in this sub- section where the circumstances of the case or the checking   the goods carrier or vessels demands any action relating to  inspection, search and seizure of the goods loaded on the  goods carrier or vessel, by the prescribed authority, the  provisions of sub-sections (3), (5), (6) and (7) of Section 44  shall mutatis mutandis apply.

Explanation : -   For the purpose of this sub-section

(i)     "Dalal" shall include a person who renders his  services for booking of or taking delivery of  consignment of goods at a Railway Station,  booking agency, goods transport company  office, or any place of loading or unloading of  goods or contrives, makes and concludes  bargains and contracts for or on behalf of any  dealer for a fee, reward, commission,  remuneration or other valuable consideration or  otherwise.

(ii)    ’person transporting goods’ shall, besides the  owner, include the manager, agent, driver,  employee of the owner, or person in charge of a  place of loading or unloading of goods other  than a rail head or a post office, or of a goods  carrier carrying such goods, or a person who  accepts consignments of such goods for  dispatch to other places or gives delivery of any  consignment of such goods to the consignee.

          Section 44 -  Production, inspection and seizure of  accounts documents and goods and search of premises \026

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(1) Subject to such Rules as may be made by the State  Government under this Act, any authority, appointed under  sub-section (1) of Section 3, may, either before or after  assessment, require any dealer to produce before it or him  any accounts, registers or documents or to furnish any  information relating to the financial transactions of the dealer,  the profit derived from such transactions and the stock of  goods produced, raised, processed, manufactured, bought,  sold or delivered by such dealer and the dealer shall comply  with such requirement.

(2)     Subject as aforesaid, all accounts registers and  documents relating to the financial transactions of a dealer,  the profit derived from such transactions and all goods kept in  any place of business or any dealer shall at all reasonable  times, be open for inspection by any authority appointed under  sub-section (1) of Section 3 and the dealer shall render all  possible assistance to such authority in carrying out the  inspection.

Explanation \026 Such authority may take or cause to be taken  such copies of, or extracts from the accounts, registers or  documents as such authority may consider necessary.

(3)     If any authority appointed under sub-section (1) of the  section 3 has reason to suspect that any dealer is to evade  the payment of any tax or any clearing or forwarding agent  or a person transporting goods or any owner of a  warehouse or a godown is keeping or has kept his  accounting such a manner as is likely to cause evasion of  tax payable under this Act, such authority may for reasons  to be recorded in writing, seize such accounts, registers or  documents of the dealer or the clearing or forwarding agent  or the person transporting goods or the owner of a  warehouse or godown as may be necessary and shall  grant a receipt for the same, such seized accounts,  registers or documents shall be retained for so long as may  be reasonably necessary for examination thereof or for a  prosecution for any offence punishable under this Act  and  shall thereafter be returned to the person concerned in the  prescribed manner:

Provided that if the seized accounts, registers or documents  are retained by any authority other than the Commissioner for  more than one hundred and twenty days, the reasons for so  doing shall be recorded in writing and the approval of the  Commissioner shall be obtained by the authority so retaining  them.

(4)     For the purpose of sub-section (2) or sub-section (3) any  authority appointed under sub-section (1) of section (3)  may enter and search any place of business of any dealer.

(5)(a)  Any authority referred to in sub-section (1) shall have  the power to enter into and search any office, shop, godown or  any other place of business or any building or any place of the  dealer, or of a dalal or of an owner of a warehouse, or of a  clearing, booking or forwarding agent, or of a person  transporting goods or vessels or goods carrier and seize any  goods which are found therein but not accounted for by the  dealer or the dalal, or the owner of the warehouse, or the  clearing, booking or forwarding agent, or the person  transporting goods in his books, accounts, registers and other  documents:

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               Provided that a list of all the goods seized under  this sub-section shall be prepared by such officers and be  signed by the officer, the dealer or the person in-charge of  goods or the person in charge of the premises and not less  than two witnesses.

(b)      The authority referred to in clause (a) shall, in a case where the  dealer or the person in charge of goods as mentioned in clause  (a), fails to produce any evidence or satisfy the said authority  regarding the proper accounting of goods, impose a penalty,  after giving an opportunity of being heard  to the dealer or such  person which shall be equal to three times the amount to tax  calculated on the value of such goods shall be released as soon  as the penalty is paid.

(c)     If the dealer or the person in charge of goods as mentioned in  clause (a) demands time for production of necessary documents  in support of proper accounting, the authority referred to in  clause (a) shall release the goods on the condition that the  dealer or such a person deposits a security equivalent to three  times the amount of tax calculated on the value of the goods in  the form of a Demand Draft or a call deposit drawn on a  scheduled Bank.   

(d)     If penalty imposed under clause (b) is not paid forthwith or no  security is furnished as provided in clause (c) or the goods are  not claimed by any person, the authority referred to in clause (a)  shall arrange for the safe custody of the goods.

(e)     In case the penalty imposed under clause (b) is not paid forthwith  or the goods remain unclaimed for a period of fifteen days from  the date of seizure, the goods so seized shall be sold by auction  in the prescribed manner and the sale proceeds shall be  appropriated towards the amount of penalty imposed under  clause (b); the balance of the sale proceeds if any, shall be  deposited in the Government Treasury and shall be refunded to  the lawful claimant in the prescribed manner.

(f)     In a case where the goods have been released on the deposit of  a security as mentioned in clause (c) and evidence regarding  proper accounting of goods to the satisfaction of the authority  referred to in said clause (a) is not produced within fifteen days  from the date on which security is deposited, the amount of  security shall stand forfeited to the State Government.  If,  however, evidence or document to the satisfaction of the  authority mentioned in clause (a) regarding the proper  accounting of goods is produced  within the said period of fifteen  days, the security shall be released and the amount shall be  refunded with the approval of the next higher authority.

(6)(i)       The power conferred by sub-sections (4) and (5)  shall include the power to break open the lock of  any box or receptacle or any other place or  premises where any accounts, registers or other  documents or goods may be kept or are  reasonably suspected to be kept;

(ii)    The power conferred by sub-clause (i) shall also  include the power to seal any box or receptacle,  godown or building where any accounts,  registers or other documents or goods may be  kept or are reasonably suspected to be kept;

(7)  an authority appointed under Section 3 may require the

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assistance of any public servant or police officer in making  search and seizure or for safe custody of goods seized under  the Section and such public servant or police officer shall  render necessary assistance in the matter."     Section 38 of the Haryana General Sales Tax Act, 1973 reads as under:   "Section 38 \026 Furnishing of information by clearing and  forwarding agents etc. \026 (1)  every clearing or forwarding  agent, Dalal or any other person transporting goods, within the  State, who, during the course of his business, handles  documents of title to goods for or on behalf of any dealer, shall  furnish to the assessing authority the particulars and  information in respect  of the transactions of the goods in such  form and manner, as may be prescribed.

(2)     No clearing or forwarding agent, Dalal or any  other person transporting goods within the State shall carry on  his business unless he obtains from the assessing authority,  on payment of a fee not exceeding fifty rupees, a license in  the form and manner and subject to such conditions as may  be prescribed.

(3)     If any clearing or forwarding agent or Dalal or  person transporting goods within the State contravenes the  provisions of sub-section (1) or sub-section (2), the  Commissioner or any person appointed to assist him under  sub-section (1) of Section 3 may, after giving the person  concerned a reasonable opportunity of being heard direct him  to pay by way of penalty, an amount equivalent to twenty per  centum of the value of goods in respect of which no particulars  and information has been furnished under sub-section (1).

Explanation -  For the purpose of this section \026 (i)     ’Dalal’ shall include a person who renders his services  for booking or, or taking delivery of, consignments of goods at  a Railway Station, booking agency, goods transport company  office, or any place of loading or unloading of goods or  contrives, makes and concludes bargains and contracts for or  on behalf of any dealer for a fee, reward, commission,  remuneration or other valuable consideration or otherwise;

(ii)    ’person transporting goods’ shall, besides the owner,  include the manager, agent, driver, employee of the owner or  person incharge of a place of loading or unloading of goods or  of a Railway out-agency, city booking office or city booking  agency, when run by a private person under a contract with  the Railways but excluding a rail head or a post office, or of a  goods carrier carrying such goods, or a person who accepts  consignments of such goods for dispatch to other places or  gives delivery of any consignment of such goods to the  consignee."   Under Section 42 of the Act, it is an obligation on every clearing, booking or  forwarding agent or any other person transporting goods who during the course of his  business handles documents of title to goods for or on behalf of any dalal or a person  holding certificate under Section 14 to furnish to the prescribed authority true and  complete particulars and information and to maintain true and complete accounts,  registers, documents etc.  The said section also provides for levy of penalty at the rate  of three times of tax calculated on the value of the goods in respect of which no  particulars or information have been furnished under sub-section (1) of Section 42 of  the Act or no cash memo or bill or challan has been produced before the prescribed  authority under sub-section (3) or  rupees one thousand whichever is greater. Section 44 of the Act empowers any authority appointed under Section 3(1) of  the Act that if he has reason to suspect that any dealer is attempting to evade tax or  that any person transporting goods or any other person has kept his accounts in such a

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manner as is likely to cause evasion of tax payable under the Act, such authority may  for reasons to be recorded in writing, seize such accounts and  registers or documents.   Power has also given to the authority appointed under Section 3(1) of the Act to enter  into and search any place of business of any dealer.  The said section empowers the  authority under clause (b) of sub-section (5) of Section 44 of the Act to impose a  penalty equal to three times the amount of tax calculated on the value of such goods  and to release the goods as soon as the penalty is paid in case the dealer or the person  in-charge of the goods fails to produce any evidence or satisfy the said authority  regarding the proper accounting of the goods. In the instant case, the officers of the Sales Tax Department made a surprise  visit to the premises and godowns of the respondent-Company and searched the  premises and godowns.  On September 2, 1993, notices were issued to the  appellant- Company  to produce the documents to satisfy the authority about the proper  accounting of the goods seized.  The appellant challenged the legality of one of such  notices before the learned single Judge of the High Court by way of filing a Writ  Application (Civil Rule No. 2486 of 1983).  The writ application was opposed by the  State of Assam.  The learned single Judge allowed the writ application following the  decision of this Court in State of Haryana vs. Sant Lal  (supra).  The learned single  Judge was of the opinion that the provisions contained in Sections 42 and 44 of the Act  are prospective in nature and, therefore, on the basis thereof the authority appointed  under the Act had no jurisdiction to demand books of accounts prior to July 1,1993.   Aggrieved by the said order, the State of Assam preferred Writ Appeal No. 197  of 1996 before the Gauhati High Court and submitted that since the tax is levied under  the aforesaid Act and whatever is ancillary or subsidiary provision necessary for  achieving the object of such legislation would be covered by Entry 54 of List II of the  Seventh Schedule to the Constitution of India.  It was further submitted that the entries  in the Legislative List should not be read in a narrow or pedantic sense, but must be  given their fullest meaning and widest amplitude and be held to be extending to all  ancillary and subsidiary matters which can fairly and reasonably be said to be  comprehended in them.  The judgment  in the case of Tripura Goods Transport  Association & Anr. Vs. Commissioner of Taxes & Ors. (supra) was also cited before  the learned Judges of the Division Bench.  According to the learned counsel appearing  for the State of Assam, the said judgment squarely covers the controversy raised in the  present case.  The learned Judges of the Division Bench, after perusing the relevant  provisions of the Act and two judgments namely, Tripura Goods Transport  Association & Anr. Vs. Commissioner of Taxes & Ors. (supra) and State of  Haryana & Ors. vs. Sant Lal & Anr. (supra), was of the opinion that the case on hand  would be covered by the decision of this Court in the case of Tripura Goods Transport  Association & Anr. Vs. Commissioner of Taxes & Ors. (supra) in which case the  earlier decision of this Court rendered in the case of State of Haryana & Ors. vs. Sant  Lal & Anr. (supra)   was duly considered. In the result, the appeal filed by the State of Assam was allowed and the order  passed by the learned single Judge declaring Sections 42 and 44 of the Act as ultra  vires was set aside and the said provisions were held to be intra vires of the  Constitution of India.   The respondents,  being aggrieved, preferred  this appeal by way of special  leave petition. We heard Mr. M.L. Lahoty, learned counsel appearing for the appellant and Mr.  Krishna Sarma, learned counsel appearing for the respondent-State. Mr. M.L. Lahoty, learned counsel appearing for the appellant submitted that the  judgment in the case of State of Haryana & Ors. vs. Sant Lal & Anr. (supra) has  clearly laid down that in a valid State Legislation on sales tax, the scope/ambit of Entry  54, List II in the Seventh Schedule cannot be stretched to cover the persons who are  neither "dealer" nor have any nexus with the transaction of sale of goods.  The  transporter/carrier being stranger to the transaction of sale or purchase, they cannot be  governed or regulated by a Sales Tax Legislation.  He further submitted that the  Division Bench of the High Court, however, failed to appreciate that the facts and  circumstances as also the provisions of the Tripura Sales Tax Act and the Rules framed  thereunder were totally distinct and different and, therefore, despite affirming the ratio o f  State of Haryana & Ors. vs. Sant Lal & Anr.,(supra) this Court came to  a different  conclusion while upholding the validity of the provisions of the Tripura Sales Tax Act  and Rules framed thereunder. It was further submitted that this Court in the case of Tripura Goods Transport  Association & Anr., vs. Commissioner of Taxes &  Ors. (supra) upheld the validity of

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the impugned provisions of the Tripura Sales Tax Act and the Rules framed thereunder  in spite of the judgment of this Court in State of Haryana & Ors. vs. Sant Lal &  Anr.(supra) inasmuch as Section 38 of the Haryana General Sales Tax Act which was  the subject matter of the examination before this Court in State of Haryana’s case had  expressly excluded transporters/carriers from the definition of the persons transporting  goods.  The Division Bench erred in holding that the case of the State is covered by the  decision in Tripura Goods Transport Association & Anr. Vs. Commissioner of  Taxes & Ors. (supra) and thereby upholding the validity of Sections 42 and 44 of the  Assam General Sales Tax Act. It was further submitted that the learned Judges of the Division Bench failed to  precisely compare the provisions of the Assam General Sales Tax, 1993, more  particularly, the definition of "dealer" under Section 2(10) and Section 42 of the Act as to   the obligations arising therefrom for furnishing documents and maintaining books of  accounts with the area expressly curved out by the Explanation II appended to Section  42 so far as the same relate to the transporter/carrier of goods as also the provisions of  Section 44 authorising the authority under Section 3(1) for carrying out the search and  seizure and thereafter levying penalty vide Section 44(5)(b) equal to three times the  amount of tax calculated on the value of the goods.    It was further argued that Explanation II appended to Section 38 of the Haryana  General Sales Tax Act is similarly worded and almost pari materia to Explanation II  appended to Section 42 of the Assam General Sales Tax Act and as such the ratio of  State of Haryana & Ors. vs. Sant Lal & Anr. (supra) mutatis mutandis applies to the  present case. Concluding his arguments, Mr. M.L. Lahoty submitted that the transporters like  the appellant-Company  were not involved in any sale or purchase of any goods.  They  only performed the job of transportation of goods in and outside the State of Assam  and, therefore, the State Legislature had no authority and jurisdiction to enact any law  in exercise of its powers conferred under Entry 54 of List II of Seventh Schedule to the  Constitution of India.    As such, the provisions contained in Section 42 of the Act  imposing obligations on the transporters to furnish particulars and information and to  maintain accounts etc. were ultra vires.  Arguing further, learned counsel submitted that  the Legislature also had no power to levy penalty on them.  The transporters carrying  goods on behalf of dealers had no nexus with the sale of goods and that the appellant- Company not being a dealer as per the provisions of the Act and the object of the Act  being to deal with taxes in respect of sales or purchases of goods in the State of  Assam, the provisions contained in Section 42 so far as the transporters were  concerned were contrary to the object and the restrictions imposed under the provisions  of Sections 42 of the Act so far as the transporters were concerned were unreasonable.   Learned counsel appearing for the respondent-State supported the impugned  action of the respondents and submitted that the transportation being a part of the  business, can be termed as ancillary to the business and in that view of the matter, the  authority had jurisdiction to issue the notices \026 Annexure II. On the above pleadings of the learned counsel appearing for the respective  parties, the following questions require consideration: 1)      Whether the provisions of  Assam General Sales Tax, 1993 are  similar to the provisions of the  Haryana General Sales Tax, 1973 or  they are similar to the provisions of Tripura Sales Tax Act, 1976? 2)        Whether the provisions contained in Section 42 requiring the  transporters to furnish to the prescribed authority true and complete  particulars and information and to maintain true and complete  accounts, registers and documents in respect thereof and provisions  contained in Section 44 empowering the appointed authority to search  any office, godown etc. of transporters and seize any goods found  therein can sustain in law. 3)      If so, whether the authority can direct a transporter to comply with the  requirements of Section 42 for period prior to the enactment coming  into force. We have given our thoughtful consideration for the submissions made by the  respective parties.  We entirely agree with the judgment of the learned Judges of the  Division Bench of the Assam High Court for the conclusion arrived at by them and  reasons recorded in the judgment.   In the present case, the appellant  has challenged  the validity of Sections 42  and 44 of the Assam General Sales Tax Act, 1993 along with the impugned  assessment contending that the transporters are not "dealers" within the meaning of the

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Assam General Sales Tax Act, 1993 and hence any obligation to maintain the  documents such as registers, cash memos, challans etc. as required under Section 44  of the Act could not be imposed upon them nor any provision imposing penalty and  punishment for non-compliance of the same could be made and the same is beyond  legislative competence.  In our view, under Section 42 of the Act, it is an obligation on  every clearing, booking or forwarding agent or any other person transporting goods who  during the course of its business handles documents of titles to the goods for or on  behalf of any dealer or person holding certificates under Section 14 of the said Act to  furnish to the prescribed authority true and complete accounts, register, documents etc.   The said Section also provides for levy of penalty at the rate of three times of tax  calculated on the value of the goods in respect of which no particulars or information  have been furnished under Section 42(1) of the Act or no cash memo or challan has  been produced before the competent authority under Section 42(3) or Rs.1000/-  whichever is greater.  The said Section empowers the appointed authority to enter and  search any place of business of any dealer if he has reason to believe that any dealer is  attempting to evade tax for that any person transporting goods for any other person  who has kept in accounts in such a manner as is likely to cause evasion of tax.  As per  the accepted norms of taxation the jurisdiction whatever is ancillary or subsidiary  provision necessary for achieving the object of a tax statute is covered by Entry 54 of  List II of the Seventh Schedule to the Constitution of India.  The  Entries in the  Legislative List  have a very wide meaning and scope and should have a broad  interpretation so as to make provisions in the Act workable and in the interest of the  revenue.  The obligation imposed upon the transporters under Sections 42 and 44 of  the Act is also a part of such preventive measures against any evasion of taxes and the  same should not be read in a narrow sense.   In our view, the transporters are not strangers to the sale or purchase of goods,  to the contrary are parts and parcels and are directly involved in storing the goods  purchased or sold by, and in many cases such, transactions are fictitiously carried on in  false name and address besides false classifications vis-‘-vis transportation of such  goods in and outside  of the State making themselves party to the episode of such  fictitious transactions for the sole purpose of evasion of tax by the dealers purchasing  and selling such goods.   The judgment of this Court in Tripura Goods Transport Association & anr.  Vs. Commissioner of Taxes &  Ors. (supra) was cited before us.  In that judgment,  this court has specifically held such agents transporting goods to be reasonably and  proximately connected to the sale transaction and hence occasionally liable under the  Sales Tax Laws.  It is pertinent to mention that this Court while considering the Tripura’s  case had taken into consideration the judgment by this Court in the case of State of  Haryana & Ors. vs. Sant Lal & Anr. (supra).  The present case, in our view, is fully  covered by the judgment rendered by this Court in Tripura’s case. In our opinion, there cannot be any irregularity to call for books of accounts,  documents, evidence etc. as the same is necessary for the tax authorities to make  proper verification and scrutiny of the genuineness of the transactions.  Issuance of  notice for verification of a transaction is a formal step and the same is required for  proper verification and  scrutiny of the genuineness of the transaction to safeguard the  interest of the State revenue.   We have carefully perused both the judgments.  Both the judgment uphold the  legality of the charging and penal provisions in issue.  But this Court struck down the  relevant provisions of the Haryana General Sales Tax Act, 1973 because of apparent  ambiguity inherent therein.  However, in course of considering the analogous provision  viz Section 36 A and Section 38 B of the Tripura Sales Tax Act, 1976, this Court in the  case of  Tripura goods Association & anr. Vs. Commissioner of Taxes & Ors  .(supra)  held that maintenance of accounts by the transporters is only to help the taxing  authority to trace the dealer, fix the goods transported co-relating with the dealers  transporting such goods for fixing tax liability in this regard.  This Court further held as   follows: "If a clearing or forwarding agent or "dalal" or person  transporting goods is indeed reasonably and proximately connected  with the sale occasioning the liability to the sales tax, it is legitimate to  license himself under the Act and maintain and furnish such  information and particulars to the assessing authority thereunder as  he would in the course of his business come to possess, it is  legitimate then to make him liable for such escapement of tax as has  resulted from the breach by him of such obligation and to a

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reasonable penalty."

Thus it is seen that Sections 42 and 44 of the Act do not impose any liability  upon the transporter, carriers etc.  to pay any sales tax under the Act.  The said sections  are basically meant to check the tax evasion.  Thus the requirement of maintenance of  document and the certificate of registration by a transporter or any such agent is only for  similar purpose as incorporated under Sections 36 A and 38 B of the Tripura Sales Tax  Act, 1976 which has been held to be a valid piece of legislation by this Court in the case  of Tripura Goods Transport Association & Anr. Vs. Commissioner of Taxes & Ors.  (supra).    In our view, the present case is fully covered by the said judgment of this  Court. The judgment of this Court in the case of State of Haryana & Ors. vs. Sant Lal  & Anr. (supra)  has dealt in regard to Section 38 of the Haryana General Sales Tax Act,  1973 which required the clearing or forwarding agent or any other person transporting  goods including manager, agent, driver or employee who within the State during the  course of his business, handles "documents of title to goods" for or on behalf of the  dealers to furnish the assessing authority the particulars and information in respect of  transaction of goods and further required to obtain a licence from the assessing  authority in breach whereof penalty was provided for.  But this Court struck down  Section 38 of the Haryana General Sales Tax Act, 1973 primarily due to the reason that  the meaning of the words "document of title to goods"  was held to be not clearly defined  and so it was found that provisions of the Act cannot have any application to those  persons who do not handle documents of title.   In our view, the Assam Act is completely distinguishable from the Haryana Act. There is a marked difference between the provisions of Haryana and Tripura  Laws inasmuch as Section 38 of the Haryana General Sales Tax Act, 1973 do not  clearly define the person dealing with "documents of title of goods".  Further, this Court  declared the provisions of Section 38 of the Haryana General Sales Act to be ultra vires  primarily on the ground that the transporters/carriers were specifically excluded from the  definition of "person transporting goods" in the explanation appended to Section 38 of  the Act.  For this ambiguity alone, this Court has struck down Section 38 of the Haryana  General Sales Tax Act.  In the case of Tripura goods Transport Association & Anr.  Vs. Commissioner of Taxes & Ors. (supra), this Court upheld the analogous  provisions contained under Section 36A and 38B of the Tripura Sales Tax Act as the  said provisions clearly defined the expression  "dealer" and "documents of title to goods"  have been clearly defined and in that view, this Court upheld the legality of Section 36A  and Section  38B of the Tripura Sales Tax Act.   It is further seen that Explanation II to  Section 42 of the Act excludes only  person in-charge of a rail head or a post office from the definition of "person transporting   goods".  This Explanation clearly states that person in charge of a goods carrier carrying  such goods would be included in the definition of "person transporting goods".  It is only  due to the reason, this Court was inclined to declare Sections 36 A and 38B of the  Haryana General Sales Tax Act as ultra vires and illegal. The Assam Act, in all its spirit and content is analogous to the Tripura Sales Tax  Act and not similar to the Haryana General Sales Tax Act inasmuch as the Assam Act  clearly defines the expressions "document of title to goods" and there is no disparity  amongst such agents dealing with documents of title to goods.  The argument of  learned counsel appearing for the appellant that Explanation II to Section 42 of the Act  was misinterpreted by the High Court holding the transporters to be dealers under the  Assam Act has no merits.  The contention of the appellant’s counsel is based on  misconception that the expression "goods carrier" in the Assam Act is qualified by the  expression "other than" which qualifies the expression "a rail head or a post office".  The  preposition of appearing before the expression "a goods carrier carrying such goods"   clearly shows that this expression is directly related to the words "person in-charge"  giving the meaning that person in-charge of a goods carrier carrying such goods is  included in the definition of "person transporting goods".  Section 38 of the Haryana General Sales Tax Act, 1973 required clearing or  forwarding agent, Dalal or any other person transporting goods (manager, agent, driver  or employee) within the State, who during the course of his business handles  documents of title to goods for or on behalf of any dealer to furnish to the assessing  authority the particulars and information in respect of the transactions of the goods and  further required to obtain licence from the assessing authority in breach whereof  heavy  penalty was provided for, were held to be ultra vires and no proximate connection was

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found to be existing between the transaction of sale and the clearing or forwarding  agent, dalal or other transporter.  The penalty as provided was also held to be  disproportionate to the quantum of escaped assessment.  It was also observed in the  case of State of Harayana  & Ors. vs. Sant Lal & Anr. (Supra) that the legislative  entries have to be read in a wider sense so as to include all subsidiary and ancillary  matters.  Provisions by which evasion of tax could be prevented and further providing  machinery for the purpose would be within the ambit of the legislative entry.  It was  further observed that if a clearing or forwarding agent or dalal or a person transporting  the goods is indeed reasonably and proximately connected with the sale occasioning  the liability to the sales tax, it would be a legitimate requirement for such person to  obtain licence and maintain and furnish such information and particulars to the  assessing authority as in the course of his business he may come to possess.  But  while commenting on sub-section (1) of Section 38 of the Haryana General Sales Tax  Act it was observed that it was not every clearing or forwarding agent or dalal or person  transporting goods who comes into possession of the particulars and information  required to be furnished.  It was further observed that it is only such clearing or  forwarding agents or other persons transporting the goods who can be required to  obtain licence and would be liable to penalty for breach of such provisions.  The  meaning of the words "documents of title to goods" was also held to be not clearly  defined.  So it was found that provisions of the Act cannot have any application to those  persons who do not handle documents of title.  Thus provisions of the Act cannot have  any application to all and the State Legislature will have no power to legislate in respect  of such persons.  The matters which are not ancillary or subsidiary to the legislative  entry cannot be legislated upon under the entry.         The Division Bench of the Gauhati High Court while considering the impugned  judgment had taken into consideration both the judgments of this Court as cited above  and held that Sections 29, 36A and 38B of the Tripura Sales Tax Act are in substance  similar to Sections 42 and 44 of the Assam Sales Tax Act and uphold the provisions of  the Assam Act in consonance to the judgment of this Court in the case of Tripura  goods Tranport Association & Anr. Vs. Commissioner of Taxes & Ors. (supra).  In  our opinion, there is no exclusion of any transporter/carrier from the definition of person  dealing in "documents of title to goods". In view of the facts and circumstances of the case, the civil appeal deserves to  be dismissed.  The Civil Appeal is, accordingly, dismissed.  However, there shall be no  order as to costs. In  Writ Petition No. 622 of 2000 As already noticed, the writ petition filed by M/s A.B.C. (India) Ltd. Was allowed  by the learned single Judge of the Gauhati High Court on 20.2.1996 following the ratio  laid down by this Court in the Case of State of Haryana & Ors. vs. Sant Lal & Anr.  (supra) and declared Sections 42 and 44 of the Act to be ultra vires so far as they  related to the obligations of the transporters to furnish information and the power of  search and seizure in connection with the goods transported by the transporters.  Writ  Appeal filed by the State of Assam was allowed.  S.L.P.(C) No. 5937 of 2000 was  preferred before this Court challenging the said judgment.  Leave was granted by this  court.  The State of Assam, by taking advantage of the decision of the Division Bench  dated 4.1.2000, inserted Section 46A in the Act of 1993 by Assam Act XX of 1999  giving it the effect from 2.2.2000 and thereby made it statutory obligation of every  transporter, carrier or transporting agent engaged in transport business relating to  taxable goods in Assam to obtain a Certificate of Registration.  The said Section 46A  reads as under: "46A.  For carrying out the purposes of Section 46 every  transporter, carrier or transporting agent, operating its transport  business relating to taxable goods in Assam, shall be required to  obtain a Certificate of Registration in the prescribed manner from the  Commissioner or any officer appointed under Section 3 to assist him,  on payment of such fees as may be prescribed."

By exercising power under Section 72(1) of the Act, consequential amendments  were also made in the Assam General Sales Tax Rules, 1993 by issuing the Notification  on 11.9.2000.  A new Rule 21A was inserted stipulating that every transporter, carrier or  transporting agent liable for registration under Section 46A within 60 days of  commencement of the amending Rules was to submit application for registration.  Yet  another new Rule i.e. Rule 39A was inserted providing for an appeal to the Assam  Board of Revenue.  Rules 42  and 43 were also inserted to provide  for setting up of  check post and for the service of notice.  The above writ petition was filed by the Assam

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Chamber of Inter-State Carriers  challenging both the Amending Acts that is, Assam Act  XX of 1999 by which Section 46A was inserted as also the Amendment Rules 2000 as  the same are repugnant to Articles 14, 19(1)(g), 21 and 300 A of the Constitution of  India as the State of Assam lacks legislative competency to legislate the said provisions  of law.    It was submitted by the petitioners that the transporters/carriers are neither  dealers under the Assam General Sales Tax Act nor they in any way even remotely  concerned/associated with the transaction of sale/purchase of any taxable goods.   Furthermore, it does not handle the documents of title of goods and accordingly no  liability arising out of the Assam General Sales Tax Act and the Rules framed  thereunder can be fastened on any of the transporters, carriers which are members of  the writ petitioners’ Association.  It was submitted that as the entire controversy arising  out of the judgment of the Division Bench of the Gauhati High Court dated 4.1.2000 was  under consideration by this Court, the petitioners sought to file the above writ petition  under Article 32 of the Constitution of India challenging the validity of the Act and the  Rules framed thereunder. This Court issued Rule Nisi and tag this petition along with Civil appeal No. 2760  of 2000 @ S.L.P.(C) No. 5937 of 2000.   A counter affidavit was  filed by the State of Assam  contending that Section 46  A of the Act requires that every transporter/carrier or a transporting agent operating its  transport business relating to taxable goods in Assam is to obtain a certificate of  registration from the Commissioner or any Officer appointed under Section 3 of the Act  to assist him, on payment of a prescribed fee. We have perused Section 46 A which, in our view, has been inserted only for  achieving the objective of sealing loopholes of avoidance and evasion of sales tax by  the fictitious dealers with the help of transport companies.  Normally the transporters are  not liable to pay tax but liability of the transport arises only if the transporter or carri er  does not disclose the particulars required under Section 46A of the said Act read with  Rule 21A of the Rules thereunder.   The newly inserted Section 46 A of the Act, in our  view, is legally sound and analogous to Section 38 B of the Tripura Sales Tax Act, 1976.   It is also pertinent to mention that Section 38 B of the Tripura Sales Tax Act, 1976 has  been upheld by this Court in the case of Tripura Goods Transport Association & anr. Vs.  Commissioner of Taxes & Ors. (supra).   In our view, the obligation imposed upon the transporters under Sections 42 and  44 and 46A of the Assam Act is also a part of such preventive measures against any  evasion of taxes and the same should not be read in a narrow sense. Section 46 A and  Rule 21 A of the Assam Act and the Rules framed thereunder respectively are valid and  piece of legislation for the purpose of checking evasion of taxes by making the  transporters/carriers accountable for the part they play in the transaction of sale and  purchase of goods.   Thus we hold that the  insertion of Section 46A and Rule 21A have in no way  infringed the fundamental rights of the petitioners as the  inserted  provisions are  analogous to those of Section 38 B of the Tripura Sales Tax Act, 1976  which have  since been upheld by this Court.  The State Legislature has the jurisdiction and  competence under Entry 53 of List II of the VII Schedule to the Constitution of India to  legislate such provisions as contained in Section 46 A of the Act, 1993.  In view of the facts and circumstances mentioned above, the writ petition  deserved to be dismissed.    The writ petition is accordingly dismissed.  No costs.