2001 (5) TMI 932 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of the seizure of goods on December 25, 2000.
2. Verification of documents and compliance with statutory provisions.
3. Validity of the grounds for seizure, including the non-registration of the consignor and the vehicle's passage through checkposts.

Detailed Analysis:

1. Legality of the Seizure of Goods on December 25, 2000:
The primary issue for consideration was whether the seizure of goods on December 25, 2000, was lawful. The court noted that the detention order was issued on December 23, 2000, and the goods were kept in the custody of the driver on his verbal request. The seizure report, dated December 25, 2000, was signed by the petitioner on January 1, 2001. The court found contradictions in the respondent's claim that the driver was absent between December 23, 2000, and December 31, 2000. The court held that the procedural aspects of the seizure were complied with according to the law, and the seizure was made based on prima facie enquiries.

2. Verification of Documents and Compliance with Statutory Provisions:
The court examined whether the transportation of goods was done in contravention of statutory provisions. It was noted that the documents presented at the Chichira checkpost were found to be in order. The respondent's claim that the vehicle did not pass through Jamsolghat checkpost and that the consignor was not a registered dealer under the Orissa Sales Tax Act were key points. However, the court found that there was no physical verification of the goods by the respondent and that the information gathered over the phone did not provide a sufficient basis for forming a "reasonable belief" as required under section 70(1) of the Act.

3. Validity of the Grounds for Seizure:
The main grounds for seizure were the non-registration of the consignor and the vehicle's alleged failure to pass through the Jamsolghat checkpost. The court held that the non-registration of the consignor under the Orissa Sales Tax Act could not render the entire document false. The court also found that there was no corroborating evidence for the respondent's claim about the vehicle's passage through the checkpost. The court concluded that the grounds for forming the reasonable belief for seizure lacked legal basis.

Conclusion:
The court held that the seizure of goods on December 25, 2000, was illegal and quashed the seizure order. The seized goods, which had already been ordered to be released on furnishing security, were to have the security released forthwith. The order also covered RN11 of 2001 and RN12 of 2001. The application was allowed, and the parties were to bear their respective costs.