2015 (10) TMI 2502 - HC - VAT and Sales Tax

Alternative remedy - Seizure of goods alongwith the vehicle and demand of security @ 40% of the value of goods - buyers are not dealers as they are individuals, who are buying the goods for their personal use and hence are consumers - Petitioner contended that petitioner firm is a courier service and has nothing to do with the sale or purchase of goods and is registered under the service tax and paid the service tax for the transaction and as such making it liable to pay VAT in the State of Uttarakhand is absolutely illegal and against the provisions of the Act. Held that - both the writ petitions stands disposed of, on the ground of alternative remedy, with the direction that the State Government shall take all appropriate and necessary steps to fill up the vacancy in the Commercial Tax Appellate Tribunal, Uttarakhand so that appeal of the petitioner firm and other affected assessees may be taken up for hearing. During the pendency of the second appeals before the Commercial Tax Appellate Tribunal, Uttarakhand, interim order dated 26.08.2015, passed by this Court, shall continue to operate. - Appeals disposed of

Summary

Issues:
Challenge to seizure order and demand for security under Uttarakhand VAT Act, 2005; Interpretation of Sections 48 and 53 of the Act; Availability of alternative remedy through appeal to Commercial Tax Appellate Tribunal; Non-functioning of Tribunal leading to filing of writ petitions under Article 226 of the Constitution of India.

Analysis:
The petitioners sought a writ to quash a seizure order dated 30.07.2015 by the Assistant Commissioner of Commercial Tax, Vikas Nagar, Dehradun, confirmed by the Joint Commissioner of Garhwal Region, Haridwar. The petitioner firm, engaged in courier services, challenged the legality of the seizure and security demand of Rs. 7,85,879 at 40% of the goods' value under the Uttarakhand VAT Act, 2005. They argued that as a courier service, they are not involved in the sale or purchase of goods and have service tax registration. The goods transported were for personal use by individuals, not for business purposes, hence VAT liability in Uttarakhand was deemed illegal.

The petitioners contended that Section 48 of the Act regarding import of goods into the state against a declaration did not apply to them as they were not purchasing goods for business purposes. They highlighted the mandatory nature of obtaining a declaration form under Section 48(1) and the irrelevance of this provision to personal buyers. The petitioners emphasized their role as a courier service, separate from the sale or purchase of goods, registered under service tax, making them exempt from VAT liability in Uttarakhand.

Section 53(1) of the Uttarakhand VAT Act, 2005, provided for appeals to the Appellate Tribunal against orders passed under specified sections. However, due to the non-functioning of the Tribunal and the unavailability of a division bench in Uttarakhand, the petitioners resorted to filing writ petitions under Article 226 of the Constitution of India. The Court acknowledged the absence of an alternative remedy and directed the State Government to fill the vacancy in the Commercial Tax Appellate Tribunal to facilitate the hearing of appeals, including those of the petitioner firm, within three months of filing.

In conclusion, the Court disposed of both writ petitions on the basis of the availability of an alternative remedy through appeal to the Commercial Tax Appellate Tribunal. It directed the State Government to address the non-functioning of the Tribunal and ensure timely resolution of appeals, maintaining the interim order passed during the pendency of the appeals. Copies of the order were to be sent to relevant authorities for information and necessary action.