1992 (1) TMI 332 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Sales Tax Officer to seize the vehicle.
2. Validity of the transit pass in form XXXIV.
3. Authority to seize the vehicle after the Assistant Commissioner's order.
4. Legality of the demand for cash security for the release of the chassis.

Detailed Analysis:

1. Jurisdiction of the Sales Tax Officer to Seize the Vehicle
The petitioner challenged the jurisdiction of the Sales Tax Officer to seize the vehicle, arguing that the issuance of a transit pass in form XXXIV deprived the authorities of the power to seize the vehicle. The court rejected this argument, stating that Section 28-A(1) of the U.P. Sales Tax Act mandates that any person bringing goods into the state must obtain the prescribed declaration forms. The court emphasized that the issuance of a transit pass does not exclude the operation of Section 28-A if the transit pass was obtained through fraudulent misrepresentation. The court clarified that the Sales Tax Officer has the authority to detain goods not covered by genuine documents as per sub-sections (2), (6), and (8) of Section 13-A of the Act.

2. Validity of the Transit Pass in Form XXXIV
The court examined the validity of the transit pass in form XXXIV, which was issued to the petitioner. The Sales Tax Officer had found upon enquiry that the transit pass and accompanying documents were false, as the chassis was intended for sale within the state by Messrs. Prayag Udyog (Pvt.) Ltd., not for transit to Rewa, Madhya Pradesh. The court supported this finding, citing Rule 84(3) of the U.P. Sales Tax Rules, 1948, which authorizes the seizure of goods if the documents are found to be false or incorrect. The court concluded that the transit pass in form XXXIV obtained by the petitioner was false and thus did not protect against seizure.

3. Authority to Seize the Vehicle After the Assistant Commissioner's Order
The petitioner argued that once the Assistant Commissioner, Check Post, directed the release of the chassis without security, it could not be seized again. The court dismissed this argument, noting that the Assistant Commissioner's order was based on the apparent state of things and did not preclude subsequent action. The Assistant Commissioner had explicitly directed the Sales Tax Officer, S.I.B., Allahabad, to conduct a thorough enquiry and take appropriate action if necessary. Therefore, the seizure of the vehicle by the Sales Tax Officer, S.I.B., was valid and within his authority.

4. Legality of the Demand for Cash Security for the Release of the Chassis
The court upheld the legality of the demand for cash security for the release of the chassis. The Sales Tax Officer, S.I.B., Allahabad, had demanded a security sum of Rs. 1,50,000 for the release of the chassis after finding that the petitioner had failed to substantiate his claim of being a resident of Rewa and that the documents produced were manipulated. The court found that the seizure and the demand for cash security were fully authorized by law under the circumstances.

Conclusion
The petition was dismissed, with the court ruling that the Sales Tax Officer had the jurisdiction to seize the vehicle, the transit pass in form XXXIV was obtained through fraudulent means, the Assistant Commissioner's order did not grant immunity from subsequent seizure, and the demand for cash security was legal. The court also clarified that its observations were limited to the matter of seizure and should not preclude independent adjudication in regular assessment or penalty proceedings.