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2011 (5) TMI 877 - HC - VAT and Sales TaxWhether it will be open to the writ court, on the facts as contained in this petition, to award damages as claimed by the petitioner, based on the valuation of the goods seized by the respondents at the time the show-cause notices were issued to the petitioner? Held that - The seizure was pursuant to a power conferred on the respondents under the Act. The power to levy tax or collect tax is normally a part of the sovereign function of the State. The Act has conferred power on various authorities who are bound to discharge their statutory functions. There is no material on record to show that the exercise of that power was mala fide. Even otherwise, it would not be possible for this court, considering the disputed questions of fact involved, to quantify the compensation and, as such, in our opinion, this would not be a fit case to exercise our extraordinary jurisdiction. Appeal dismissed.
Issues Involved:
1. Entitlement to compensation for the value of seized goods. 2. Legality of the seizure and detention of goods. 3. Jurisdiction of the writ court to award damages. Detailed Analysis: 1. Entitlement to Compensation for the Value of Seized Goods: The petitioner sought a writ of mandamus directing the respondents to pay the value of the goods seized, which had become waste and unfit for human consumption due to the respondents' negligence. The petitioner argued that the value of the goods was determined by the Trade Tax Department at the time of detention and seizure, and therefore, the petitioner should be compensated for the goods that had deteriorated. The court, however, found that there was no material evidence presented to show the state of the goods at the time of detention or to establish that the goods had indeed deteriorated due to the respondents' actions. Moreover, the court noted that the goods were detained pursuant to a quasi-judicial order and the petitioner had not demonstrated any mala fide action by the respondents. 2. Legality of the Seizure and Detention of Goods: The seizure of the goods was conducted by the Assistant Commissioner, Trade Tax, under the Uttar Pradesh Trade Tax Act, 1948, due to the absence of requisite forms (XXXI and XXXII) accompanying the consignment. The petitioner contested the seizure through various judicial forums, but the goods remained detained. The court observed that the seizure was executed under statutory authority and confirmed by quasi-judicial and judicial bodies. There was no evidence of mala fide intent or negligence on the part of the respondents that would justify awarding compensation. The court emphasized that the petitioner had the opportunity to get the goods released by furnishing the required security but did not do so. 3. Jurisdiction of the Writ Court to Award Damages: The court examined whether it was appropriate to award damages in its extraordinary jurisdiction under Article 226 of the Constitution of India. The court referred to the Supreme Court's judgment in *Lucknow Development Authority v. M.K. Gupta* [1994] 1 SCC 243, which held that public authorities could be liable for compensation for arbitrary and capricious actions. However, the court distinguished this case by noting that the matter arose from proceedings under the Consumer Protection Act, where a special forum was created to adjudicate such claims. The court also cited other judgments, including *Chairman, Grid Corporation of Orissa Ltd. v. Smt. Sukamani Das* AIR 1999 SC 3412, which reiterated that disputed questions of fact in contractual matters should not be adjudicated in writ jurisdiction. The court concluded that without clear evidence of mala fide action or negligence, it could not quantify compensation or award damages in its writ jurisdiction. Conclusion: The court dismissed the petition, finding no merit in the claims for compensation. The seizure of goods was conducted under statutory authority, and the petitioner failed to provide sufficient evidence to establish negligence or mala fide intent by the respondents. The court also held that it was not appropriate to award damages in its extraordinary jurisdiction due to the disputed questions of fact involved.
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