2003 (11) TMI 567 - HC - VAT and Sales Tax

Summary

Issues:
1. Demand of tax, surcharge, and penalty by Sales Tax Officer.
2. Compliance with statutory provisions regarding seizure and confiscation of goods.
3. Opportunity of being heard and accounting for goods before confiscation.

Detailed Analysis:
1. The petitioners, including a registered dealer and unregistered dealers, were issued notices demanding tax, surcharge, and penalty for goods being transported without proper documentation. The petitioners contested the excessive penalties imposed, expressing willingness to pay taxes based on goods' valuation but objecting to the penalties. The Sales Tax Officer justified the demand due to lack of proper documentation accompanying the goods.

2. The judgment referred to Section 16-D of the Orissa Sales Tax Act, 1947, which empowers the Commissioner to seize and confiscate goods not accounted for by the transporter. The provision outlines conditions for seizure, including an opportunity for the affected person to be heard and make payments to release the goods. The judgment emphasized the requirement for goods to be unaccounted for in the transporter's records for seizure and confiscation to be valid.

3. The judgment highlighted Rule 94 of the Orissa Sales Tax Rules, 1947, which mandates an opportunity for the owner of detained goods to be heard before confiscation. The ruling concluded that the petitioners, as owners of the goods, should have been given the chance to account for the goods and present their case before the issuance of the impugned notice demanding tax, surcharge, and penalty. As a result, the court quashed the notice and directed the Sales Tax Officer to provide the petitioners with the necessary opportunities for hearing and accounting for the goods in accordance with the statutory provisions.

In conclusion, the court allowed the writ petition, emphasizing the importance of adhering to procedural requirements, providing opportunities for affected parties to be heard, and ensuring compliance with relevant laws before imposing tax, surcharge, or penalty on goods in transit.