1999 (8) TMI 924 - HC - VAT and Sales Tax

Summary

Issues:
1. Seizure of goods for alleged tax evasion due to lack of accompanying documents during transportation.

Detailed Analysis:
The judgment involves a revision petition under section 11 of the U.P. Trade Tax Act against an order passed by the Trade Tax Tribunal regarding the seizure of goods. The case revolves around a consignment of medicines being transported without proper papers from Delhi to Meerut. The goods were detained at a check-post, and a show cause notice was issued. The dealer contended that the lack of accompanying documents was a technical default and not an attempt to evade tax. The Tribunal, however, viewed it as an evasion attempt due to the absence of papers and the use of a document related to exempted goods. The revisionist cited legal precedents emphasizing that seizure should be based on evidence of tax evasion, not just the absence of documents. The Tribunal's decision was challenged based on the argument that there was no intent to evade tax.

The judgment delves into the circumstances surrounding the transportation of goods by M/s. Elder Pharmaceuticals Limited from Bombay to its Meerut branch. The revisionist provided documents like the Airway bill, stock transfer note, and form XXXI to prove the legitimacy of the consignment. It was highlighted that the urgent nature of the delivery led to the oversight of not providing the documents to the driver. The carrier's promptness in producing the papers after the goods were detained indicated that they were genuine and not manipulated post-seizure. The driver's cooperation, lack of suspicious behavior, and the presence of a separate consignment of exempted goods further supported the argument that there was no intent to evade tax. The revisionist's compliance with tax regulations in previous assessments also portrayed them as a law-abiding taxpayer.

Ultimately, the High Court allowed the revision petition, setting aside the Tribunal's order and directing the release of the seized goods to the revisionist. The judgment emphasized that the lack of accompanying documents was a technical error, not indicative of tax evasion. The decision was based on the absence of concrete evidence suggesting an intent to evade tax, highlighting the importance of assessing each case based on substantial grounds rather than procedural lapses.