2009 (10) TMI 865 - HC - VAT and Sales Tax

Release of vehicles and goods detained by respondent No. 2 on the intervening night of 3/4 September, 2009 demanded as the petitioners have already furnished the bank guarantees and cash securities as demanded by respondent No. 2, Excise and Taxation Officer (Mobile Wing), Chandigarh and who has passed the release orders also. Held that - The present petition lacks merit and deserves to be dismissed. No doubt, the petitioners have furnished the requisite bank guarantee and cash securities under the provisions of the VAT Act. However, in view of registration of an FIR No. 363 dated September 8, 2009 (annexure P/4) against the petitioners, before the release of the goods detained under the provisions of the VAT Act, the release order dated September 8, 2009 (annexure P/3) passed by respondent No. 2 will only facilitate the petitioners to get their vehicles released under the provisions of VAT Act but will not help the petitioners to get their vehicles released for committing alleged offences under sections 420/465/467/468/471 and 120B IPC as that is a separate cause of action and the only remedy available to the petitioners is to get their vehicles released under the provisions of section 451 of the Cr. P.C. Since the vehicles and the goods are case property in the aforesaid FIR, the appropriate remedy for the petitioners would be to move an application before the appropriate court to seek release of the vehicles/goods on superdari and it would not be appropriate for this court to order release of the goods in the present petition filed under articles 226/227 of the Constitution.

Summary

Issues:
1. Detention of vehicles and goods under the Punjab Value Added Tax Act, 2005.
2. Registration of FIR against petitioners under sections 420/465/467/468/471 and 120B IPC.
3. Dispute over the release of detained goods and vehicles.

Issue 1: Detention of vehicles and goods under the Punjab Value Added Tax Act, 2005.

The petitioners, engaged in steel production and sale in Punjab, had their 14 trucks carrying iron scrap detained by respondent No. 2 for alleged VAT Act violations. Despite furnishing bank guarantees and cash securities as demanded, the goods were detained. Respondent No. 2 later passed a release order for the goods, but they were not released by respondent No. 3, leading to an FIR against the petitioners and their employees. Respondent No. 3 refused to release the goods citing the FIR, insisting the petitioners seek release under section 451 of the Cr. P.C.

Issue 2: Registration of FIR against petitioners under sections 420/465/467/468/471 and 120B IPC.

An FIR was registered against the petitioners and their employees by respondent No. 3 for alleged cheating and forgery related to false bills to evade sales tax. Respondent No. 3 justified the continued detention of goods due to the criminal case, stating the only remedy for the petitioners was to apply for release under section 451 of the Cr. P.C.

Issue 3: Dispute over the release of detained goods and vehicles.

The court found that despite the petitioners fulfilling VAT Act requirements and obtaining a release order, the FIR against them necessitated a separate legal process for the release of goods. The court concluded that the release order facilitated the release under the VAT Act but did not address the criminal charges. The appropriate remedy for the petitioners was deemed to be seeking release through the court under section 451 of the Cr. P.C. Consequently, the writ petition was dismissed.

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