2007 (8) TMI 773 - HC - VAT and Sales Tax

Summary

Issues involved:
The judgment involves the interpretation of Section 13-A(6) of the U.P. Trade Tax Act, specifically regarding the seizure of goods due to non-compliance with Circular No. 5482 dated 31-3-2007. The key issues include the justification of the seizure of goods, the requirement of information through E-Mail before dispatching goods, and the maintenance of proper books of account by the applicant.

Summary:

Seizure of Goods Justification:
The Tribunal justified the seizure of goods based on the applicant's failure to provide information as required by Circular No. 5482 dated 31-3-2007 before dispatching the goods. Additionally, it was noted that the applicant did not maintain manufacturing accounts and stock registers adequately, despite being a significant manufacturer of Iron Steel. The Tribunal's decision to allow the release of goods upon furnishing a bank guarantee of Rs. 1 Lac was based on these grounds.

Interpretation of Section 13-A(1-A):
Section 13-A(1-A) empowers officers to seize goods if there is reason to believe that the goods are not traceable to a bona fide dealer or are not properly accounted for in the dealer's records. In this case, it was argued that there was no evidence to suggest that the goods were not entered in the books of account. The Circular dated 31-3-2007, requiring information before dispatching goods, was deemed regulatory but not sufficient to override the Act's provisions. The seizure of goods should be based on concrete evidence rather than presumption.

Compliance with Circulars:
The applicant contended that their manufacturing unit lacked E-Mail facilities and that the Circular dated 31-3-2007 initially applied only to sales, not stock transfers. They had sought extensions for compliance with the Circular, highlighting the regulatory nature of such directives. The subsequent extension of the Circular to cover stock transfers was noted, emphasizing the need for clear guidelines in regulatory matters.

Conclusion:
After considering the arguments and examining the legal provisions, the Court found that the seizure of goods was not justified in this case. The lack of concrete evidence to support the belief that the goods were not properly recorded in the books of account led to the decision to set aside the Tribunal's order. The authority was directed to release the goods without further delay.