1986 (8) TMI 428 - HC - VAT and Sales Tax

Summary

Issues:
1. Seizure of goods by Sales Tax Officer during transportation.
2. Dismissal of application for release of goods without furnishing security.
3. Discrepancy in the valuation of goods and refusal to accept bank guarantee in place of cash security.
4. Lack of reasoning provided by Assistant Commissioner for rejecting petitioner's requests.
5. Legality of orders dated 17th July, 1986 and 13th August, 1986 by Assistant Commissioner.
6. Relief sought by the petitioner.

Detailed Analysis:
1. The petitioner, a partnership concern dealing in electric goods and cycle parts, had goods transported by a truck which were seized by the Sales Tax Officer at a check post in Ghaziabad. The value of the goods was assessed at Rs. 2,99,130, with the petitioner's portion valued at Rs. 1,42,400, leading to a requirement of 40% cash security for release.

2. The petitioner filed an application before the Assistant Commissioner, Sales Tax, seeking release of goods without providing security. However, the application was dismissed by the Assistant Commissioner, leading to a subsequent application by the petitioner on 12th August, 1986, requesting correction of the goods' value and permission to furnish a bank guarantee instead of cash security.

3. The Assistant Commissioner dismissed the second application without providing reasons for the rejection. The petitioner's counsel argued that the Assistant Commissioner erred in not justifying the refusal to accept the lower valuation of goods and the request for a bank guarantee. The Court found merit in the petitioner's submissions, emphasizing that the Assistant Commissioner should have recorded reasons for denying the petitioner's requests.

4. The Court noted that under section 13-A(6) of the U.P. Sales Tax Act, the Assistant Commissioner has discretionary power regarding security matters. However, if special circumstances are presented by a dealer in support of an alternative security request, the Assistant Commissioner must provide reasons for rejecting the plea. In this case, the Assistant Commissioner failed to justify the rejection of the petitioner's requests.

5. Consequently, the Court held that the orders dated 17th July, 1986, and 13th August, 1986, passed by the Assistant Commissioner could not be sustained. The writ petition was partially allowed, quashing the mentioned orders and directing the Assistant Commissioner to reconsider the petitioner's application, providing reasons for any disagreement with the petitioner's claims and requests.

6. The relief granted to the petitioner was limited to setting aside the previous orders and requiring a fresh decision by the Assistant Commissioner with proper reasoning. No costs were awarded in this case, and certified copies of the order were to be provided to the parties' counsel within three days.