2011 (9) TMI 522 - HC - VAT and Sales Tax

Confiscation - detention of a consignment of steel tubes transported - undue hardship and needless loss - Held That - Goods need not be adjudicated till adjudication is over. Detained goods can be directed to be released on furnishing sufficient security.

Summary

Issues: Challenge of detention of goods under the Kerala Value Added Tax Act, 2003 due to suspected tax evasion, justification for detention based on lack of proper documents, request for release of goods, requirement of security for release, expeditious completion of adjudication proceedings.

Analysis:
1. The petitioner, a registered dealer under the Kerala Value Added Tax Act, challenged the detention of steel tubes being transported from Vyttila to Kollam by the Respondent on suspicion of tax evasion. The petitioner argued that the continued detention of the goods was causing unnecessary loss and hardship. Hence, he sought appropriate orders for the release of the goods.

2. The Respondent, represented by the learned Government Pleader, justified the detention of the vehicle due to the absence of proper accompanying documents required for transporting such goods. It was contended that the lack of documentation led to the presumption of tax evasion. The Respondent maintained that the detention order (Exh. P3) was valid and necessary. Even if the goods were to be released, it was insisted that the petitioner must provide sufficient security.

3. The Court acknowledged that the truth of the arguments presented by both sides could only be determined through adjudication. However, it was deemed unnecessary to keep the goods and the vehicle detained until the adjudication process was completed. To safeguard the Revenue's interests, the Court directed the petitioner to furnish security for the detained goods. Consequently, the Court ordered the release of the goods to the petitioner upon the provision of adequate security, in compliance with the law.

4. The writ petition was disposed of with the direction for the Respondent to release the detained goods, as per the Exh. P3 proceedings, to the petitioner upon executing a bond without sureties satisfactory to the Respondent for the suspected amount of tax evasion. Additionally, the Respondent was instructed to expedite the adjudication proceedings, ensuring completion within three months from the date of receipt of the judgment copy.