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Judgment
A.S. Bhate, J.—Petitioner is a firm carrying on business in Madras. On 4-1-1988 the Vigilance Authority of A.P. got information that the petitioner-firm was indulging in business in groundnut oil in the State of A.P. against the provisions of the law and transporting the said groundnut oil to Maharastra State clandestinely. Lorry bearing registration No. AEE 1269 which was allegedly transporting the said material was intercepted at Adilabad town which is the end-district of Andhra Pradesh. It was found carrying 95 quintals of groundnut oil. One person named Venkatanarsimham, who was a clerk serving in petitioner-firm, was found travelling with the lorry. He produced the Way Bill No. 221165 and credit bill No. 452 of 2-1-1988. The authorities detained the said lorry since it was suspected that the groundnut oil was not loaded at Madras as was alleged and, that the groundnut oil business was being done within Andhra Pradesh. As a result, further enquiry was caused by a visit to Madras and the books of account and stock registers maintained by the petitioner-firm were gone into. They did not reflect any transaction of sale of 95 quintals of groundnut oil which was allegedly covered by the way bill and credit bill produced by the clerk at Adilabad. The quadruplicate way bill was found kept blank and triplicate credit bill was issued in respect of "Bajra" and was not for groundnut oil. Further enquiries were made and it was found that the vehicle in question had not passed through the last checkpost of State of Tamil Nadu or the first checkpost of A.P. either on 2nd or on 3rd January, 1988. As a result, a case was booked against the petitioner-firm u/s 7 of the Essential Commodities Act, 1955 (hereinafter referred to as the ''Act'') and a report u/s 6-A of the Act was filed before the Collector, Adilabad. After necessary enquiry, the Collector by his proceedings No. CS6/57/88 dated 10-5-1988 ordered confiscation of the entire seized stock 20 of 95 quintals of groundnut oil to the Government on the ground of contravention of Clause 3 of A.P. Scheduled Commodities Dealers (L&D) Order, 1982. An appeal was preferred against the said order u/s 6(C) of the Act to the Additional Commissioner of Civil Supplies, Hyderabad. The appeal was dismissed by affirming the order of the Collector by G.O.Ms.No. 467, Pood and Agriculture, Civil Supplies (IV) Department, dated 22-12-1993.
Aggrieved by the order in the appeal referred above, the present writ petition has been filed. It is contended by the learned Counsel for the petitioner that there was no application of mind by the authorities concerned in passing the impugned order of confiscation. It is further stated that the petitioner has never done business in the State of Andhra Pradesh and the conclusion reached to that effect is without any basis. The lorry carrying the petitioner''s goods was detained on 2-1-1988 in Tamil Nadu by the Assistant Commercial Tax Officer at Madhavaram Check Post. Detention notice was available and was produced before the Collector in the enquiry u/s 6A of the Act. But the same was rejected without any good grounds. The order of confiscation is based on statements which were recorded behind the back of the petitioner and therefore, the said enquiry is vitiated.
The learned Government Pleader has supported the orders passed by filing a counter.
On going through the record and the orders passed by respondent Nos. 2 and 1 respectively, we are satisfied that this is not a case where we should interfere by exercising powers under Article 226 of the Constitution of India. The consignment of 95 quintals of groundnut oil was admittedly found being transported through the district of Adilabad in the lorry. The petitioner''s clerk was accompanying the said consignment. Prima facie, it was thus clear that the petitioner was carrying the groundnut oil for purpose of business within the State of A.P. The explanation given by the petitioner was that the goods were loaded at Madras and were being transported to Nagpur, beyond the State of Andhra Pradesh and that there was no business being done within the State of Andhra Pradesh. If really this explanation had some semblance of truth, then, the petitioner ought to have produced the material to justify the same. However, the enquiry has revealed that the stock registers maintained by the petitioner itself at Madras did not support such contention. There was no entry about the loading of 95 quintals of groundnut oil. On the other hand, the opening balance of the petitioner-firm on 31-12-1987 was 92.94 quintals of groundnut oil and no transaction whatsoever of either sale or purchase was noted in the said book till 6-1-1988. Thus the opening balance on 6-1-1988 continued to be 92.94 quintals of groundnut oil. This fully destroyed the petitioner-firm''s claim that the seized groundnut oil was despatched from Madras from the petitioner''s-firm''s office.
The contention that the said lorry was detained at the last checkpost of Tamil Nadu and was carrying on groundnut oil in it is also not substantiated at all. The only material produced is the so called detention notice alleged to have been issued by the Commercial Tax Officer, Madhavaram. There is absolutely nothing to show that the payment was really made as is alleged, at the said checkpost. It is also noticeable that the clerk accompanying the lorry did not produce any material before the Inspector of Police (V.C) at Adilabad checkpost to show that any tax was paid at Madhavaram Checkpost in Tamil Nadu. No receipt has been produced even till now. The copy of the detention notice does not bear any seal nor any stamp. It may be pointed out that the learned Counsel for the petitioner, while arguing the matter before us, specifically asked for time to produce the documents to show the payment at the checkpost. In spite of granting time, no document, not even number of the cheque by which the payment is alleged to have been made, could be produced. We are therefore, satisfied that the authorities below were justified in holding that there was no material to show that the lorry had passed the last checkpost of Tamil Nadu or had entered the first checkpost of Andhra Pradesh, meaning thereby that the lorry had picked up the groundnut oil within the State of Andhra Pradesh itself.
It is also worth noticing that the credit Bill which was shown by the clerk at the time of detention of the lorry at Adilabad was found to be unworthy of any reliance because in the office of the petitioner-firm, the triplicate copy of the credit bill showed the transaction of sale of 101 bags of Bajra. There was no transaction of groundnut oil at all in the credit bill. Similarly the copies of the Way Bill were blank. This clearly justified the inference drawn by the respondents 1 and 2.
The contention that in there was no application of mind by the authorities below is totally meritless. The orders show sound reasoning adopted by both the authorities. In particular, the order passed by the appellate authority, which is one under challenge, shows total application of mind and sound reasoning.
It was lastly contended that the statements of persons were recorded behind the back of the petitioner and therefore, they could not be relied at the time of enquiry. This contention is also meritless because we have found from the show cause notice issued to the petitioner-firm there is a reference to the statements recorded. The petitioner was thus given full opportunity to meet those statements in its explanation to the show-cause notice.
Taking over all view of all the material, we are inclined to think that the petitioner-firm was rightly found to be carrying on the business of groundnut oil within the State of Andhra Pradesh and that the groundnut oil was not at all brought from Tamil Nadu to Andhra Pradesh for onward transport to Maharastra.
It was lastly contended that the confiscation of the total quantity of groundnut oil is very harsh. For contending so, the petitioner points out that there is no Control Order prohibiting movement of the groundnut oil or, price control order in respect of groundnut oil. We find that there is some substance in this contention. There is no restriction on movement of groundnut oil. There is also no price control order in respect of groundnut oil. However, the petitioner-firm was bound to obtain a licence for doing business in groundnut oil and was also required to maintain accounts under the A.P.Scheduled Commodities Dealers (L&D) Order, 1982. It has not complied with these requirements. We think that in this back drop, though the authorities were justified, on material before them, to order confiscation of the seized stock, the confiscation of the whole of the stock appears to be harsh and unreasonable. We modify the said order and direct that only two third (2/3rd) of the stock seized shall be confiscated. The authorities would be entitled to invoke the Bank guarantee for carrying out the confiscation of two thirds (2/3rds) of the seized stock. In view of this modification, the writ petition is allowed to that extent only. In the circumstances, no order as to costs.