2011 (4) TMI 1258 - HC - VAT and Sales Tax

Whether the Tribunal was legally justified in directing for release of the goods without any security? Held that - No question of law arises in the present revision. There is no illegality or jurisdiction error on the part of the Tribunal in passing the order impugned for release of goods without security. Appeal dismissed.

Summary

Issues:
1. Legality of directing release of seized goods without security under the U.P. Value Added Tax Act, 2008.

Analysis:
The judgment by the Allahabad High Court dealt with a revision filed by the Revenue against the Commercial Tax Tribunal's order directing the release of seized goods without any security. The key issue raised was whether the Tribunal was legally justified in ordering the release of goods without requiring any security. The goods in question, TMT bars weighing 40 tons, were detained while in transit from Durgapur to Betul. The seizure was based on doubts regarding the buyer and seller's existence and registration status, as well as concerns about the possibility of the goods being sold in Uttar Pradesh (U.P.).

The petitioner's representation under section 48(7) of the U.P. Value Added Tax Act, 2008 was rejected, leading to an appeal before the Tribunal. The Revenue argued that the TIN mentioned on the invoice belonged to a dealer in Ghaziabad, not the buying dealer in Madhya Pradesh, suggesting the goods were not in transit through U.P. The cancellation of the Madhya Pradesh dealer's registration and the absence of the West Bengal seller further supported the Revenue's presumption behind the seizure order.

However, the Tribunal found that the Madhya Pradesh dealer was genuine and traceable, with a registration that was canceled but pending restoration. The TIN error on the invoice was deemed a common mistake, not indicative of fraudulent intent. The Tribunal also noted that the detention occurred before the stipulated exit time in the transit declaration form, indicating the goods were still in transit. Referring to a previous case, the court emphasized that goods should not be seized for minor technical defects.

Ultimately, the High Court found no legal question arising from the revision. It concluded that the Tribunal did not err in ordering the release of goods without security, given the factual and legal circumstances. The judgment dismissed the revision for lacking merit, affirming the Tribunal's decision to release the seized goods without requiring any security.