2010 (5) TMI 707 - HC - VAT and Sales Tax

Detention of goods - the dealer on acquiring knowledge of the detention of the goods has submitted his written explanation that the goods were being transported against Form C - Held that - delay was on account of SCN being pasted in the vehicle itself, in absence of driver - The revisionist as such could not get timely information which led to the delay in submission of the explanation. The revisionist had produced the bills as well as Form 38 which are not disputed. It is not even the case that the Form 38 so produced by the revisionist was fake or fictitious. Revisionist is not claiming ownership or release of the goods found in excess of the quantity mentioned in form 38. The finding that Form 38 was possibly being re-used is based on presumption and there is no material or finding that the goods so entered in Form 38 had earlier been transported and as such it was being re-used. The past conduct of the driver was not at all relevant for detaining the goods of the revisionist which were being transported against a valid Form 38 - the seizure of the goods to the extent mentioned in form 38 is not legal and valid - revision allowed - decided in favor of assessee.

Summary

Issues:
Seizure of goods under Section 50 of the U.P. Value Added Tax Act based on discrepancies in the quantity of goods mentioned in Form 38 during transportation.

Analysis:
The revisionist, a registered dealer, purchased timber from Delhi and faced a seizure order under Section 50 of the U.P. Value Added Tax Act while transporting the goods to NOIDA in U.P. The revisionist's counsel argued that the goods were being transported against valid documentation including Form C, bills, and Form 38, all of which were not disputed. The revisionist disclaimed ownership of any extra material found in the vehicle beyond what was mentioned in Form 38, asserting that the seizure was unjustified.

The Standing Counsel contended that the seizure was valid as extra material was discovered during physical verification, suggesting possible misuse of Form 38. However, the court noted that the revisionist had submitted written explanations and supporting affidavits to establish that the vehicle had broken down, leading to a delay in responding to the seizure. The bills and Form 38 produced were genuine and not disputed. The court found no evidence that the goods mentioned in Form 38 had been previously transported, rejecting the presumption of misuse based on past conduct of the driver.

Ultimately, the court held that the seizure of goods to the extent mentioned in Form 38 was not legal and valid. Consequently, the revision was allowed, and the seizure order along with subsequent affirming orders were set aside specifically concerning the goods transported against Form 38. The revisionist was granted entitlement for the release of goods mentioned in Form 38 without the requirement of furnishing any security.