1999 INSC 0960
                                        SUPREME COURT OF INDIA

                                      Commissioner of Sales Tax and Anr.

                                                         Versus

                                              P.T. Enterprises and Anr.

                          (S.P. Bharucha, D.P. Wadhwa and N. Santosh Hedge, JJ)

                                          Civil Appeal No. 8921 of 1994

                                                      08.12.1999

JUDGMENT

S.P. Bharucha, J.--

These appeals raise a common question pertaining to the power conferred by Section 29-A of the
Madhya Pradesh Sales Tax Act, 1958.

    2. The facts that we narrate relate to the first appeal (Civil Appeal No. 8921 of 1994)

                  3. A truck carrying 120 bags of "supari" belonging to the respondent was
                  chcked by the Sales Tax Authorities on 10.1.1994 near Bijalpur when it crossed the
                  barrier into Madhya Pradesh. It was found by thee authorities that he value of the
                  "Supari", as shown in the declaration form, was less than what it should really have
                  been. Accordingly, the authorities issued to the respondent a notice under Section 29-
                  A(11) of the said Act. The notice required the respondent to show cause why it
                  should not be held that the truck was carrying the goods without paying sales tax
                  with the intention of evading sales and why penalty in the sum of Rs. 31,472 should
                  not be imposed. The respondent filed a writ petition in the High Court of Madhya
                  Pradesh to quash the notice. By the order under challenge, the writ petition was
                  allowed. The High Court held that the provisions of Section 29-A did not "authorise
                  the authorities to question the value of the goods as contained in the documents with
                  reference to market value... ".

                  4. Section 29-A empowers the State Government or the Commissioner of Salex
                  Tax to set up checkposts or barriers "with a view to prevent or check evasion of
                  tax...." Under sub-section (4) thereof, every person transporting goods notified by
                  the State Government must carry with him an invoice, bill or challan or any other
                  documents, by whatever name called, issued by the consignor of the goods giving
                  such particulars as may be prescribed. Under sub-section (6) the transporter is
                  obliged to stop his vehicle at every checkpost or barrier and keep it stationary for as
                  long as may be reasonably necessary to allow checkpost officer to verify and check
                  the declarations and documents mentioned above, to search the vehicle and inspect
the goods and al documents relating thereto which are in the possession of the
transporter. Sub-Section (8), so far as is relevant here, states:

"(8) If the checkpost officer finds after searchign the vehicle and
verifying the declaration of other documents relating to the goods, that
­

(a) *                             *     *

a. the declaration filed in respect of any goods is false or incorrect,
    either in respect of the kind of goods or the quantity of goods
    transported, or the value thereof, or

                                     *     *  *

such officer may presume, until the contrary is proved, that an attempt was being
made to facilitate the evasion of tax in respect of such goods and he may, after
recording his reason therefor in writing a copy of which shall be forthwith supplied
to the transporter seize such goods in such manner as may be prescribed."

                                              (emphasis supplied)

5. Sub-section (11) reads thus :

"(11) If the checkpost officer is not so satisfied, he shall record his
findings accordingly giving reasons therefor and he shall serve on the
transporter a notice in writing requiring him to show cause, ordinarily
within fifteen days of the service of the notice, why a penalty as
specified in the notice, which shall be equal to three times the amount
of tax which would have been payable if the goods were sold within
the State on the date of such seizure, should not be imposed upon him
for the attempt made to facilitate the evasion of tax on such goods".

6. It is, therefore, clear that every person who transports goods of the kind notified by the State
    Government, and it is not disputed that "supari" is notified, must carry with him an invoice,
    bill or challan or any other documents issued by the consignor of the goods that gives
    particulars relative to the goods. The transporter is obliged to stop the vehicle carrying the
    goods when required to do so to allow the Sales Tax Authority to verify and check the
    declarations and documents aforestated and to search the vehicle and inspect the goods. If
    such search ad verification shows that the declaration that has been filed in respect of the
    goods is false or incorrect in respect of, interalia, the value thereof, the authority may
    presume until the contrary is proved that an attempt is being made to evade sales tax. He
    must then record his reasons in this behalf and supply a copy thereof to the transporter. If
    after considering the transporter's explanation, the authority remains unsatisfied, he is
    required so to record and to serve on the transporter a notice to show cause why a penalty
    should not be imposed upon him. In the premises, the High Court was plainly in error when
    it held that the aforesaid provision does not authorise the authorities to question the value of
    the goods as contained in the documents with reference to market value. The provision
    clearly does.

7. The civil appeals are allowed. The orders under appeal are set aside.
8. No order as to costs.