2012 (5) TMI 567 - HC - VAT and Sales Tax

Detention orders - seizure orders - goods imported into the State of U.P. by road with not accompanied by the prescribed declaration - Held that - A perusal of the transit declaration form reveals that Kanpur was one of the important places through which the vehicle was supposed to pass while in U.P. before its exit from the State. Therefore, if the vehicle was found in Kanpur it cannot be said that it had deviated form the disclosed route. It is not necessary for the driver or the person in-charge of the vehicle or even the dealer to mention in the transit declaration form the exact road from which the vehicle would pass while crossing Kanpur. There is no such column in the transit declaration form. The authorities cannot insist that the vehicle carrying goods should pass through a particular road of the city. In view of the above, the seizure of the goods on the ground that it had taken a different route, other than one disclosed in the transit declaration form is illegal and cannot be sustained. In the absence of any material, simply on the verbal information that the said dealer has disowned the sale, the conclusion drawn that the actual selling dealer is not available cannot be sustained. Thus the seizure of the goods in the case at hand on the ground that the dealers are nonexisting is bad in law. Revision allowed.

Summary

Issues:
Seizure of goods in transit under U.P. Value Added Tax Act, 2008 based on deviation from disclosed route and lack of accompanying documents.

Analysis:
The judgment revolves around the seizure of goods in transit under the U.P. Value Added Tax Act, 2008 due to alleged deviations from the disclosed route and absence of necessary accompanying documents. The assessee, a registered dealer under the Bihar Value Added Tax Act, 2005, purchased goods from Haryana for business in Bihar, passing through U.P. during transit. The goods were seized on the grounds of alleged route deviation and lack of proper documentation, including fake documents and missing import declaration form D-XI from Bihar.

The legal framework under sections 48, 50, and 52 of the Act provides the basis for seizure and detention of goods in transit, emphasizing the importance of accurate documentation and compliance. Section 52 specifically addresses the presumption of goods being meant for sale within U.P. if not accompanied by prescribed documents. However, the judgment clarifies that the power of seizure is not provided under section 52, but rather under section 48, which focuses on specific conditions for seizure, including unaccounted goods, undervaluation, lack of traceability to genuine dealers, and incorrect accompanying documents.

The judgment scrutinizes the transit declaration form and the alleged deviation of vehicles carrying goods to Kanpur. It highlights that the presence of vehicles in Kanpur, a disclosed transit point, does not constitute a deviation from the route specified in the declaration form. The absence of a specific road requirement in the form and practical considerations for vehicle routes are emphasized, negating the presumption of goods intended for sale in U.P. based on the Kanpur stop.

Moreover, the judgment delves into the genuineness of the purchasing and selling dealers, emphasizing the need for proper investigation and evidence before drawing conclusions. The court critiques the lack of findings on the import declaration form D-IX from Bihar and insufficient evidence regarding the disownment of sale by the selling dealer. Precedents are cited to support the argument that the genuineness of dealers is not a valid ground for seizure under the Act.

Ultimately, the court rules in favor of the assessee, deeming the seizure unjustified and ordering the release of goods without any security. The impugned orders by the Commercial Tax Tribunal and other authorities are set aside, emphasizing the importance of legal compliance, proper documentation, and thorough investigation in matters of goods seizure during transit under tax laws.