1987 (10) TMI 355 - HC - VAT and Sales Tax

Summary

Issues:
- Whether the plaintiff is entitled to the suit amount or any portion thereof?
- Whether the plaintiff is entitled to the interest claimed and if so, at what rate and for what period?
- Whether the suit is maintainable in law?
- Whether there is a notice under section 80, C.P.C., prior to the suit and if so, it is valid?
- Whether the court erred in holding the action of the Commercial Tax Officer does not come under section 29 of the Act read with rule 33-A of the A.P. General Sales Tax Rules?

Analysis:

The case involves a dispute where the plaintiff, a rice dealer, filed a suit claiming the value of rice seized by the defendants, along with interest, expenses, and damages. The plaintiff sold rice to a dealer in another district, which was detained by a Commercial Tax Officer for lacking certain permits. The plaintiff obtained a clearance from the District Supply Officer stating no restrictions on the movement of rice. The trial court found in favor of the plaintiff, decreeing the suit against the defendants. The defendants appealed, arguing the legality of the detention under the Sales Tax Act.

The central issue in the appeal was whether the Commercial Tax Officer's actions were justified under Section 29 of the A.P. General Sales Tax Act. The Act empowers officers to detain goods vehicles to verify tax liability. However, in this case, the evidence showed the lack of necessity for permits and certificates for rice movement. The Court held that the officer's refusal to release the stock despite clearance exhibited mala fides, as the goods were perishable. The detention was deemed unjustified and mala fide.

The defendants also argued that a superior officer's order to release the goods precluded the court's jurisdiction. However, the order came eight months later and after the suit notice, indicating an attempt to evade liability. The Court referenced Section 29(3)(b) of the Act, emphasizing that detention orders must be promptly executed by the check post officer, not a superior officer after a significant delay.

The Court dismissed the defendants' reliance on Section 36 of the Act, emphasizing that the case did not concern challenging official orders but focused on the officer's mala fide actions. The Court concluded that no substantial legal question warranted overturning the lower courts' judgments. Consequently, the second appeal was dismissed, affirming the lower courts' decisions and awarding costs to the plaintiff.