1995 (5) TMI 257 - HC - VAT and Sales Tax

Summary

Issues:
Violation of procedure under section 14-B(7) of the Punjab General Sales Tax Act, 1948 by the Assistant Excise and Taxation Commissioner in imposing penalty without proper notice and hearing.

Analysis:
The petitioner alleged that goods were sent on consignment basis to respondent No. 4 but were detained by respondent No. 3. The Assistant Excise and Taxation Officer imposed a penalty on respondent No. 4 without following the prescribed procedure under section 14-B(7) of the Punjab General Sales Tax Act, 1948. The petitioner claimed ownership of the goods and argued that no notice was given to them before the penalty was imposed. The court found that the procedure followed by the Assistant Excise and Taxation Commissioner was irregular and against the principles of natural justice. The court directed the Commissioner to issue notice to the petitioner and respondent No. 4, hear both parties, and pass an appropriate order in accordance with the law to determine the ownership of the goods.

The court acknowledged that the Commissioner may impose a penalty on respondent No. 4 and encash the bank guarantee provided by the petitioner, but emphasized the importance of following due process. If the petitioner can prove that no penalty is applicable under the Punjab General Sales Tax Act, 1948, the encashed bank guarantee should be refunded. The court instructed the Deputy Director, Excise and Taxation Enforcement, Chandigarh to expedite the proceedings and dispose of the matter by a specified date. The petitioner was directed to be present for further directions on a specific date.

In conclusion, the writ petition was disposed of with no order as to costs. The judgment highlighted the significance of adhering to procedural requirements, ensuring natural justice, and determining ownership rights over the detained goods through a fair and lawful process.