2006 (7) TMI 664 - HC - VAT and Sales Tax

Summary

Issues Involved:
The judgment addresses the detention and seizure of goods by the trade tax department during transportation through the State of Uttar Pradesh, based on the provisions of Section 28-B and Rule 87 of the U.P. Trade Tax Act, 1948 and U.P. Trade Tax Rules, 1948.

Details of the Judgment:

Issue 1: Compliance with Trade Tax Rules
The petitioner transport company had obtained a transit pass at the entry check post and surrendered it at the exit check post, complying with Section 28-B read with Rule 87 of the U.P. Trade Tax Act, 1948 and U.P. Trade Tax Rules, 1948. The respondent department did not dispute that the vehicle crossed the territory of Uttar Pradesh within the transit time limit, nor that the goods were unloaded within the state. The goods found at the exit check post matched the specifications of the goods that entered from the entry check post.

Issue 2: Interpretation of Rule 87(3)
Rule 87(3) of the U.P. Trade Tax Rules, 1948, focuses on ensuring that consignments leaving the state match the trip sheet, without concern for the origin or destination beyond Uttar Pradesh when goods are passing through the state. Citing precedents like Madhya Bharat Transport Corner v. Commissioner, Trade Tax and Commissioner, Trade Tax v. S/s. Shagun Khan, the judgment clarifies that the trade tax department's role is limited to verifying the consistency of goods being transported out of the state.

Issue 3: Detention of Goods
The officers of the respondent department detained the petitioner's goods on irrelevant grounds related to the source, origin, consigner, and consignee details. The judgment criticizes the over-enthusiastic approach of the officers and acknowledges that the petitioner was unjustly harassed without valid reasons, warranting immediate relief.

Conclusion:
The High Court quashes the detention/seizure order and directs the respondent to release the seized goods to the petitioner promptly. The writ petition is allowed with costs, providing relief to the petitioner from the unwarranted detention of goods during transit through Uttar Pradesh.