2011 (12) TMI 528 - HC - VAT and Sales Tax

Summary

Issues involved: The judgment involves a writ petition challenging an order passed by the Value Added Tax Officer (VATO) under the Value Added Tax Act, 2004 regarding the transportation and taxation of goods.

Details of the judgment:

1. Background of the case: The petitioners transported rubber products from Kerala to Bangalore, then to Delhi, with the intention of further transportation to other states without selling in Delhi, questioning the seizure memo issued by the respondents under the Value Added Tax Act, 2004.

2. Order under Section 33: During the pendency of the writ petitions, an order under Section 33 of the Act was passed by the VATO, leading to an application for stay by the petitioners.

3. Direction for inquiry: A Division Bench directed the VATO to conduct an inquiry regarding the destination of the goods and the compliance with tax laws, based on the documents produced, with a sum of Rs. 4 lacs deposited by the petitioners.

4. Order of VATO: The VATO passed an order directing the petitioners to pay a penalty of Rs. 7,04,628, of which Rs. 4 lacs were already deposited, requiring the balance to be paid with interest by a specified date.

5. Legal challenge: The petitioners were aggrieved by the VATO's order and raised concerns about challenging the inquiry report under Section 74 of the Act.

6. Court's decision: The Court considered the timeline of the writ petitions and inquiry proceedings, allowing the petitioners to file objections within the specified period under Section 74(4) of the Act, excluding the time during which the petitions were pending and the inquiry was conducted.

7. Grant of liberty: The Court granted the petitioners liberty to file objections by a specified date, ensuring that objections would not be dismissed on grounds of limitation, and no further recovery would be made until objections were resolved.

8. Disposition: The writ petition was disposed of, allowing the petitioners to file objections within the extended period, with a clarification that the objections would be decided based on the law and the provisions of the Act.

This judgment provides a detailed account of the legal proceedings and the Court's decision regarding the taxation and transportation of goods under the Value Added Tax Act, 2004.