1996 (7) TMI 547 - HC - VAT and Sales Tax

Summary

Issues:
Seizure of truck carrying lottery tickets and imposition of penalty under section 31(3) of the Bihar Finance Act, 1981.

Analysis:
The judgment by the High Court of Patna involved two similar writ petitions concerning the seizure of trucks carrying lottery tickets and the imposition of penalties under section 31(3) of the Bihar Finance Act, 1981. The first writ petition involved a truck with registration number WB-37-1107, seized on June 17, 1992, with an imposed penalty of Rs. 15,13,712.10. The second writ petition was about a truck with registration number DDL-3675, seized on the same day with a penalty of Rs. 10,93,686 imposed. The petitioners challenged the penalty orders based on various grounds, including the liability to pay sales tax on lottery tickets and the computation of the tax value. However, the court found it unnecessary to delve into these issues due to a previous Bench decision in O.C. Corporation v. State of Bihar [1996] 102 STC 33; (1996) 1 PLJR 547, which clarified the conditions for seizure and penalty under section 31(3) of the Act.

The court emphasized that for the seizure of goods or vehicles under section 31(3) of the Act, the prescribed authority must be satisfied that the goods in question were sold or purchased in Bihar and were being clandestinely transported to evade taxes. This satisfaction must be based on positive materials, not mere suspicion. The court noted that the impugned orders in both cases lacked consideration and findings on these crucial aspects, which are prerequisites for seizure and penalty imposition under the law. Consequently, the court held the orders unsustainable and quashed them.

In conclusion, the High Court allowed both writ petitions, ruling in favor of the petitioners due to the absence of essential findings required for the seizure and penalty imposition under section 31(3) of the Bihar Finance Act, 1981. The court did not award any costs in this matter.