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2014 (5) TMI 1040 - HC - VAT and Sales TaxSeizure of goods - non furnishing of the requisite documents - Cancellation of invoice - Held that - even if for noncompliance of any of the provisions of the VAT Act and when the goods were brought into the State of Gujarat and it can be considered to be the local sale, in that case also, the liability under the VAT Act towards tax, interest and penalty would be ₹ 5,69,989/-. Now, when the petitioner who is the original owner of the goods is ready and willing to deposit the aforesaid amount towards tax, penalty and interest, which can be the maximum liability under the VAT Act and when the owner/proprietor of M/s. Saloni Trading Company in the form of affidavit has stated that he has not purchased any goods from the petitioner, meaning thereby M/s. Saloni Trading Company is not the owner of the goods in question, it will be just and proper to direct the respondents to release the goods which is under seizure on payment of the aforesaid amount of ₹ 5,69,989/- as no fruitful purpose would be served to continue the goods in question under seizure. - Decided partly in favour of assessee.
Issues:
Petition under Article 226 of the Constitution of India seeking to quash an impugned memo of seizure and release goods on payment of VAT liability. Analysis: The petitioner, the original owner of seized goods, filed a petition under Article 226 of the Constitution of India to challenge the memo of seizure issued by respondent No.5 on 28.12.2014. The petitioner sought the release of goods in Truck No.RJ141G-4047 upon payment of VAT liability. The petitioner's advocate stated that the transaction with the purchaser had been canceled, and the petitioner had not received any sale consideration. The petitioner expressed readiness to pay the tax, interest, and penalty under the Gujarat Value Added Tax Act, amounting to Rs. 5,69,989. An undertaking was filed by the petitioner's authorized signatory accepting the liability to pay this amount. The petitioner requested the release of goods worth approximately Rs. 44 lakhs upon payment of the VAT liability. The respondent's Assistant Government Pleader initially opposed the petition citing suppression of facts and petitioner's conduct but later agreed that the petitioner should pay the tax, penalty, and interest leviable under the VAT Act. The respondent did not contest the petitioner's readiness to pay the amount. Upon hearing both parties, the Court noted that the goods were seized due to noncompliance with VAT Act provisions, even though they were sold to M/s. Saloni Trading Company. The Court acknowledged the petitioner's willingness to deposit the maximum liability of Rs. 5,69,989 towards tax, penalty, and interest. The affidavit from the owner of M/s. Saloni Trading Company confirmed they did not purchase goods from the petitioner, establishing the petitioner's ownership of the seized goods. Consequently, the Court directed the release of the seized goods upon the petitioner unconditionally depositing Rs. 5,69,989 and proving ownership to the appropriate authority. The Court ruled that keeping the goods under seizure served no purpose once the liability was settled, and thus, the petition succeeded partially. In conclusion, the Court ordered the respondents to release the seized goods upon the petitioner's payment of Rs. 5,69,989 towards tax, penalty, and interest, along with establishing ownership to the appropriate authority. The Court made the rule absolute, permitting direct service for compliance with the order.
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