2015 (3) TMI 741 - HC - VAT and Sales Tax

Detention of goods and truck - Held that - Although there are four modes provided in Rule 77 of the RVAT Rules, but there is no reason for the respondent to insist upon the petitioner for furnishing bank guarantee, who according to its own showing is a driver and the respondent in the case of other identical parties has adopted last mode of furnishing of security i.e., executing a bond in Form RVAT-64, with necessary modifications where necessary, with two sureties acceptable to the officer or authority concerned. - Ends of justice therefore would meet if the respondent is directed to release the goods along with truck of the petitioner on furnishing of security for a sum of ₹ 13,55,303/- by way of submitting a bond in RVAT Form 64 along with two sureties, as per his offer, of local parties, acceptable to the authorised officer, as per provisions of Rule 77 of the RVAT Rules within ten days. - Petition disposed of.

Issues:
1. Non-release of truck and goods detained by tax authorities.
2. Interpretation of provisions under the Rajasthan Value Added Tax Act, 2003 regarding security and release of goods.
3. Applicability of provisions to a truck driver as a dealer.
4. Requirement of bank guarantee as security for releasing goods.
5. Discriminatory treatment based on the driver's residence.
6. Justification for insisting on a bank guarantee for security.

Analysis:
1. The petitioner filed a writ petition aggrieved by the non-release of his truck and goods detained by tax authorities. The truck was carrying grocery goods from Delhi to Gujarat when it was checked and detained by the Assistant Commercial Taxes Officer for alleged discrepancies in TIN numbers and goods not matching documents. The matter was transferred to the Assessing Authority, who proposed levy of tax and penalty. The petitioner's appeals to various authorities resulted in partial stay of demand subject to furnishing security. The Tax Board directed release of goods upon furnishing security to the satisfaction of the Assessing Authority within a specified time frame.

2. The petitioner argued that the tax authorities violated his fundamental rights by detaining the goods beyond the statutory period under the RVAT Act. Reference was made to previous court decisions where goods were released upon furnishing security in the form of a bond as per RVAT Rules. The petitioner contended that the provisions under Section 83(7) of the RVAT Act applied only to a dealer and not a driver, emphasizing the need for fair treatment and adherence to legal procedures.

3. The respondent department justified the requirement of a bank guarantee as a mode of security under Rule 77 of the RVAT Rules, citing potential difficulty in recovering tax and penalty from a non-resident driver. The respondent argued that even a driver could be considered a dealer under the law, thus liable for tax obligations. The petitioner offered local sureties for security, challenging any discriminatory treatment based on his residence and asserting the goods were not intended for unloading in Rajasthan.

4. The court observed that while multiple modes of security were available under Rule 77, there was no justification for insisting on a bank guarantee from the petitioner, who was a driver. Considering the merits of the case and previous judgments, the court directed the respondent to release the goods and truck upon submission of a bond in RVAT Form 64 with two local sureties acceptable to the authorized officer, in line with the provisions of the RVAT Rules.

5. The court emphasized that justice would be served by releasing the goods upon the petitioner furnishing security within a specified time frame, aligning with the directives given by the Tax Board. The writ petition was disposed of accordingly, with the order remaining in effect until the appeal was decided by the Deputy Commissioner (Appeal) on the scheduled date for hearing.

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