2014 (7) TMI 578 - HC - VAT and Sales Tax

Detention of goods - petitioner prays for issuance of a writ in the nature of mandamus directing the respondents to release its goods and vehicle on furnishing of surety bond - whether the petitioner is entitled to release of goods by furnishing surety bond under section 51(6)(a) of the Act or the respondent can legitimately require the petitioner to furnish bank guarantee under section 51(6)(b) of the Act - Held that - Procedure for furnishing information in respect of inter-State trade or commerce of goods through virtual information collection centre has been incorporated in the above mentioned rule. According to sub-rule (2), such owner or person in-charge after tendering of the aforesaid information is required to furnish electronic receipt bearing unique number allotted to him as a proof for submission of the said information. The aforesaid receipt shall be a necessary document along with the goods receipt, trip sheet or log book bill or cash memo, sale invoice, vehicle s record in which such goods are being transported. It was not disputed that there was no check-post or information collection centre which had been crossed by the transporter while going from Mandi Gobindgarh to Cheema Chowk, Ludhiana, where the documents were checked. The vehicle had been sent to Ludhiana to get cycle parts loaded which were to be loaded on the metal rolls sold by the petitioner. It was thereafter that e-ICC form was to be generated. As urged by learned counsel for the petitioner, in case the e-ICC form had been generated by the transporter earlier, the goods which were to be fetched from Ludhiana could not have been legally taken by the transporter. Thus, the case of the petitioner is covered under section 51(6)(a) and not under section 51(6)(b) of the Act. Further, the petitioner is a registered dealer under the Act and in such a situation, furnishing of surety bond would be legally permissible and the demand of bank guarantee by the respondents was unjustified. respondents are directed to release the goods and vehicle of the petitioner on furnishing of surety bond forth with - Decided in favour of assessee.

Summary

Issues:
Release of detained goods and vehicle on furnishing surety bond under section 51(6)(a) or bank guarantee under section 51(6)(b) of the Act.

Analysis:
The petitioner, a registered dealer under the Punjab Value Added Tax Act, 2005, sold consignments of goods and faced detention of the vehicle by an Excise and Taxation Officer (ETO) at Ludhiana. The ETO detained the vehicle citing reasons related to the absence of e-ICC forms as per rule 64B of the Punjab VAT Rules, 2005. The petitioner argued that the transporter had assured to generate e-ICC forms before the goods left Punjab, and the detention was unjustified. The ETO demanded a 50% penalty or a bank guarantee for the release of goods. The petitioner, after legal advice, prepared a surety bond and submitted it to the ETO, who refused to acknowledge it, leading to the filing of the present petition under article 226/227 of the Constitution of India.

The court examined the relevant sections of the Act, specifically section 51(6)(a) and (b), which deal with the detention of goods. Section 51(6)(a) allows for the release of goods on furnishing security or executing a bond with sureties, while section 51(6)(b) pertains to cases where required documents are not submitted. The court noted that in this case, the petitioner's situation fell under section 51(6)(a) as there was no check-post or information collection center crossed by the transporter before the goods were checked in Ludhiana. The petitioner, being a registered dealer, was entitled to furnish a surety bond, making the demand for a bank guarantee by the respondents unjustified.

Consequently, the court allowed the writ petition, directing the respondents to release the goods and vehicle of the petitioner upon the furnishing of a surety bond. The judgment clarified that the observations made should not be construed as an expression of opinion on the case's merits, and the original record was to be returned to the State Counsel under proper receipt.