JUDGMENT
Kanakaraj, J.
1. The appellant herein filed the Writ Petition No. 7208 of 1993 for the issue of a Writ of Prohibition to prohibit the respondents herein from extending the provisions of the Tamil Nadu General Sales Tax Act, 1959, hereinafter referred to as ‘TNGST Act’, in respect of the sales and disposal of the confiscated goods by the appellant/petitioner. In the affidavit filed in support of the writ petition the statutory duties entrusted to the appellant by the Central Excise Act and the Customs Act are narrated. The contention is that the Central Excise and Customs Departments are entrusted with the collection of revenue for the Central exchequer by levying import and export duties and the duties on manufactured goods as laid down in the various enactments. It is also pointed out that the Department is authorised to dispose of the goods confiscated under the relevant provisions of the statute. In short, it is pointed out that there is absolutely no profit motive in the dealings of the appellant and the main aim in only to recover the excise duty involved in the goods under confiscation and to safeguard the economy of the country.
2. Reference is then made to the TNGST Act and various provisions contained therein. With reference to the definition of the words ‘sale’, ‘trader’ and ‘business’ in the TNGST Act it is contended that the appellant cannot be considered to be a dealer within the meaning of the TNGST Act. It is, therefore, contended that levy of sales tax on the sale of such confiscated goods is illegal and improper. It is under the above circumstances that the prayer to which we have made a reference is asked for.
3. The learned Judge, Bakthavatsalam, J., dismissed the writ petition in limine because a Writ of Prohibition cannot lie on such vague allegations and apprehensions. One sentence of the learned Judge which has come in for criticism by the learned Counsel for the appellant is as follows :
“No single instance of any payment or assessment proceedings has been brought to the notice of this Court by the petitioner”.
The learned Judge also felt that the appellant should have thought twice before filing the Writ Petition against a department of the State Government. Against the said order of the learned Judge dismissing the Writ Petition the present appeal has been filed.
4. Mr. T. Srinivasamoorthi, learned Central Government Standing Counsel has referred to the averments in the affidavit and also points out that the respondents had been issuing notices on and off necessitating the filing of the Writ Petition. He has taken us through the definitions of the various words in the TNGST Act and points out that the appellant can never be deemed to be a dealer and the sales effected by the appellant can never be taxed under the TNGST Act. In the writ appeal the respondents have filed a counter-affidavit. In the counter-affidavit it is clearly admitted that the Commercial Tax Officer, Palakkarai had issued a notice requesting the Superintendent of Customs and Central Excise, Tiruchi to submit necessary returns for all the quarters for the assessment years 1991-92 and 1992-93. It is interesting to note that the Superintendent of Customs and Central Excise had sent a reply enclosing the collections made by them by way of sales tax during the quarters ending 30-6-1991 and 31-3-1992 to the tune of Rs. 66,179/-. Similarly a further sum of Rs. 25,601/- was also sent as being the sale-tax collection up to June, 1992. It is also pointed out that for the subsequent years also notices were sent and the appellant had been called upon to produce their accounts for verification by the Sales-tax Department. These goods were, of course, not available to the learned Single Judge because he had dismissed the writ petition at the stage of admission. The respondents also refer to Rule 18B of the TNGST Rules requiring every department of the Government to submit a return. One other significant provision of law, which is relied on by the respondents is Explanation (ii) to Section 2(g) of the TNGST Act. That Explanation is as follows :-
“Where the excess amount has been collected wilfully and knowing that it was not due to be collected, one hundred and fifty per cent of the amount collected.
Provided that no proceedings under this sub-section shall be commenced after a period of five years from the expiry of the year in which the amount has been collected :
Provided further that no prosecution for an Offence under sub-section (1A) of Section 45 shall be instituted in respect of the same facts on which a penalty has been imposed this sub-section”.
Therefore, the respondents contend that it is the duty of the appellant to file returns and submit their accounts like any other dealer. The counter-affidavit then proceeds to cite a number of decisions in their favour. We will deal with the decisions at a later stage.
5. We would, however, extract one other passage in the counter-affidavit because it has got considerable relevance to the argument of the appellant and the prayer sought for in the writ petition. The said sentence is as follows :-
“I submit that the appellants have collected sales tax on the sales of seized goods and retail shop. Such collections and remittance to the Sales Tax Department is as follows :
Year Amount
(April to March) Rs.
1990-91 1,39,663.60
1991-92 80,364.40
1992-93 61,356.00
1993-94 (up to August, 1993) 11,548.00
The Collections are made on the sales of seized goods. Since there is a collection of Sales tax and remittances of such tax to the Department the appellants have been called upon to file A10 form as per Rule 18B of the TNGST Rules. Since the appellants have not complied with or responded to the notices issued by the respondent, Form XII have been issued to produce the accounts for the relevant periods”.
6. We have extracted the above passage only to indicate that it will be improper for the appellant to ask for a blanket writ of prohibition, preventing the respondents from applying the TNGST Act to the appellant/Department. It cannot be disputed that when the appellant collects sales tax in respect of the sales of the confiscated goods, they are bound to account for the same and pay it over to the Sales Tax Authorities. At least to this extent, the appellants cannot avoid the applicability of the TNGST Act. We are only pointing out these circumstances to show that the applicability of the Act will ultimately depend upon the facts of each case and the transactions between the parties. It will, therefore, be advisable to allow the law to take its own course and permit the appellant to seek the statutory remedies available under the TNGST Act. The above passage also makes things clear that the appellant themselves had known that the sales made by them are liable to be taxed under the TNGST Act, as otherwise they would not have collected the same from the buyers. Having said so much on the facts of the case, we are of the opinion that it is not necessary to discuss the case law elaborately. Further, the effect of the decisions have got to be analysed on the basis of the availability of the said Explanation (ii) which we have already quoted. This Explanation had been brought into force on 1-4-1962. Therefore, the decisions rendered prior to the said date have no significance.
7. Mr. T. Srinivasamoorthi, learned Additional Central Government Standing Counsel appearing for the appellant has very fairly cited before us all the Judgments on the point both in favour of the appellant and against the respondents. We propose to cite a very few decisions, which in our opinion clearly suggest that the matter has to be gone into in each case by the appropriate Authorities to decide whether the sales made by the Customs Department are taxable. For instance, in some cases, a dispute arose whether the sales are first or second sales. These and all other matters can only be decided, after initiating proceedings under the Act.
8. In Member, Board of Revenue v. Collector of Stores (74 STC 5), the Supreme Court of India held on facts that the South Eastern Railway was a carrier of goods and its activity of selling goods, which remained unclaimed was adjunctive to its principal activity of carriage of goods. The South Eastern Railway was therefore held to be a ‘dealer’ for the purpose of the Bengal Finance (Sales Tax) Act, 1941.
9. In U.I. Insurance Co. Ltd. v. Commr. of Comml. Taxes (78 STC 99), the Karnataka High Court held that an insurance company which carried on the business of insuring goods, motor vehicles, machinery etc., was a ‘dealer’, when it incidentally embarked upon the sale of plastic goods rejected by the insurance company because they were damaged in transit.
10. In Collector of Customs, Cochin v. State of Kerala [1993 (66) E.L.T. 351], the very question was discussed viz., whether the Collector of Customs, Cochin was a ‘dealer’ within the meaning of Kerala General Sales Tax Act, 1963. The Explanation which we have already referred to was referred to and relied upon to hold that the fiction has dispensed with the business element in the activity of buying, selling, supplying etc., indulged in by the Central or State Government. Consequently, the Collector of Customs, Cochin was deemed to be a ‘dealer’. Certain other questions on the constitutional validity of the assessments made against the Collector of Customs were also decided in favour of the State Government.
11. Lastly, in U.O.I. v. State of A.P. [(1996) 103 STC 34] a Full Bench of Andhra Pradesh High Court interpreted Article 185 of the Constitution of India and held that the prohibition on taxation of union property related to direct tax and there was no prohibition on the levy of sales tax with reference to the union property.
12. On a consideration of all the above decisions, we are of the opinion that a Writ of prohibition, as sought for cannot be issued. In each case, the appellant has to satisfy the Authorities that the transactions are taxable or not. The remedies available under the Act are sufficient enough to safeguard the interest of the appellant. In this view of the matter, the Judgment of the learned Single Judge is upheld and the Writ Appeal is dismissed.