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2012 (12) TMI 402 - HC - VAT and Sales TaxDetention of goods - Imposition of tax and penalty under the OVAT Act and OET Act Held that - Consignment was covered with all valid required documents - party No. 3 without assigning any reason forcefully took the vehicle to Talasara Police Station without any notice or show-cause to the person in-charge of the vehicle At the time of interception of the vehicle in question, the person-in-charge of the vehicle has tendered all the documents to the officer who intercepted the vehicle - it is nobody s case that the goods carried in the vehicle was not covered by valid documents or that the person-in-charge of the vehicle has furnished false/forged way-bill/document - Sales Tax Officer have acted illegally and the orders passed imposing tax and penalty under the OVAT Act and OET Act and the order passed by opposite-party No. 2 under annexure 1 maintaining imposition of penalty made by opposite-party No. 4 are not legally sustainable - writ petition is allowed
Issues Involved:
1. Justification of actions under Section 74(5) of the OVAT Act and Section 25 of the OET Act by the Sales Tax Officer (Vigilance), Sambalpur. 2. Validity of the revisional authority's order sustaining the imposition of penalty under Section 74(5) of the OVAT Act and Section 25 of the OET Act. Issue-Wise Detailed Analysis: 1. Justification of Actions under Section 74(5) of the OVAT Act and Section 25 of the OET Act by the Sales Tax Officer (Vigilance), Sambalpur: The petitioner argued that the order passed by the Sales Tax Officer (Vigilance) was unjustified and lacked proper legal foundation. The vehicle was intercepted while carrying goods with all valid documents, including an invoice and an e-way bill. Despite this, the vehicle was detained, and penalties were imposed under Section 74(5) of the OVAT Act and Section 25 of the OET Act. The petitioner contended that the imposition of penalties was based on the alleged violation of Section 74(2)(b), (c), (d) of the OVAT Act and Sections 23 and 24 of the OET Act, which were not substantiated by any evidence of false or forged documents. The petitioner relied on the Madhya Pradesh High Court's judgment in Indore-Kolhapur Roadlines v. Assistant Commissioner of Sales Tax, which held that penalties should not be imposed if all required documents are in order, even if a different route is taken. The court analyzed the relevant provisions of Section 74(5) of the OVAT Act, which allows the imposition of penalties only if there is a violation of Section 74(2)(a) or submission of false or forged documents. The court found that the petitioner had complied with Section 74(2)(a) by providing all necessary documents at the time of interception. There was no evidence of false or forged documents. The court concluded that the Sales Tax Officer (Vigilance) acted beyond his jurisdiction by imposing penalties for alleged violations of Section 74(2)(b), (c), (d), which are not grounds for penalties under Section 74(5). 2. Validity of the Revisional Authority's Order Sustaining the Imposition of Penalty: The revisional authority upheld the penalties imposed by the Sales Tax Officer (Vigilance) on the grounds that the vehicle had avoided the check gate, violating the terms of the way-bill. The petitioner argued that there is no legal requirement under the OVAT Act and Rules that mandates passing through a specific check-post if other routes are available. The revisional authority's decision was challenged as being based on suspicion and not on concrete evidence of any statutory violation. The court scrutinized the revisional authority's order and found that it incorrectly upheld the penalties based on the vehicle's route deviation. The court emphasized that the statutory provisions must be interpreted strictly and penalties can only be imposed for clear violations specified in the law. The court reiterated that the petitioner had not violated Section 74(2)(a) or submitted false or forged documents, which are the only grounds for penalties under Section 74(5). The court also referenced the judgments in Singhal Converter (P) Ltd. v. Addl. Commissioner of Sales Tax and Vinayak Agro Industry v. Commissioner of Commercial Taxes, which were cited by the Revenue. These cases involved different factual scenarios where goods were not covered by valid documents or false documents were submitted. The court distinguished these cases from the present one, where all required documents were in order. Conclusion: The court held that the actions of the Sales Tax Officer (Vigilance) and the revisional authority were illegal and not sustainable under the law. The orders imposing tax and penalties under the OVAT Act and OET Act were quashed. The writ petition was allowed without any order as to costs.
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