2011 (9) TMI 908 - HC - VAT and Sales Tax

Summary

Issues:
Challenging the legality of seizure orders under Trade Tax Tribunal's common order based on requirement of form XXI for consignment of iron and steel, interpretation of circular dated January 7, 2011 exempting consignments up to nine metric tonnes, and justification of Tribunal's findings.

Analysis:
The judgment by the Allahabad High Court, delivered by Arun Tandon J., pertains to trade tax revisions challenging a common order by the Trade Tax Tribunal. The case involved two instances where the assessee, a registered dealer, had consignments of iron and steel seized by the authorities for not accompanying form XXI. The first seizure involved two vehicles carrying a total of 17.61 metric tonnes, and the second seizure was of a vehicle carrying nine metric tonnes. The assessee argued that the circular dated January 7, 2011 exempted consignments up to nine metric tonnes from the form XXI requirement, making the seizures illegal.

In response to the assessee's contentions, the Trade Tax Tribunal had relied on an earlier circular dated January 1, 2011, and held that the value of the consignment in the first seizure being over Rs. 50,000 necessitated form XXI, regardless of the subsequent circular. The Tribunal also noted a deliberate attempt by the assessee to avoid the form XXI requirement due to the total weight of the goods transported in two vehicles. Similarly, for the second seizure, the Tribunal found the form XXI mandatory for consignments of nine metric tonnes.

Upon reviewing the circular dated January 7, 2011, the High Court found that for consignments up to nine metric tonnes of iron and steel, the requirement of form XXI was indeed dispensed with. The court observed that the seized consignments were each under nine metric tonnes and transported under separate tax invoices by different vehicles, falling within the exemption clause of the circular. The Court emphasized that the assessee had the right to transport goods in a manner exempting the need for form XXI as per the circular, and the Tribunal's findings were deemed legally unjustifiable.

Consequently, the High Court directed the release of the seized goods upon furnishing security other than cash or bank guarantee for the tax value, clarifying that this decision would not impact any penalty proceedings. The trade tax revisions were disposed of accordingly, favoring the assessee's position based on the interpretation of the circular and the legality of the seizures.