2015 (8) TMI 395 - HC - VAT and Sales Tax

Detention of goods - Learned counsel for the State submitted that the bank guarantee having been furnished, the vehicles and the goods detained shall be released immediately - Held that - In terms of undertaking given by learned counsel for the State that the vehicles and goods in question shall be released to the petitioner forthwith. However, considering the fact that there is no justification available for detention of goods from 26.5.2015 onwards after the petitioner had furnished the bank guarantees to the tune of 30% of the value of the goods shown in the invoices in terms of Section 51(6) of the Punjab VAT Act 2005, the petitioner shall be entitled to costs - Decided in favour of assessee.

Summary

Issues:
Detention of goods by respondent, Bank guarantees furnished by petitioner, Justification for detention, Entitlement to costs.

Detention of Goods:
The petitioner filed a petition seeking the release of goods detained by respondent no. 2. The goods were purchased from M/s Satguru Enterprises and were being transported to Delhi. The drivers had all necessary documents, and part of the sale consideration was paid through RTGS bank transaction before the goods were purchased. Despite furnishing two bank guarantees totaling 30% of the goods' value, the goods were not released.

Bank Guarantees Furnished:
The petitioner provided two bank guarantees amounting to &8377; 6,13,839, which was 30% of the value of the goods. The State's counsel confirmed that upon furnishing the bank guarantees, the vehicles and goods would be released immediately. The court noted that there was no justification for detaining the goods after the bank guarantees were provided.

Justification for Detention:
The State's counsel acknowledged that there was no justification for detaining the goods after the bank guarantees were furnished. The court, in line with Section 51(6) of the Punjab VAT Act 2005, ordered the immediate release of the vehicles and goods to the petitioner. Additionally, the petitioner was awarded costs amounting to &8377; 25,000 due to the lack of justification for the continued detention of goods after the bank guarantees were submitted.

Entitlement to Costs:
The court directed the State to pay the costs of &8377; 25,000 to the petitioner within one month via a bank draft. However, the State was granted the right to recover the costs from the responsible officer(s) for the unwarranted detention of goods. The judgment concluded by disposing of the petition based on the undertaking given by the State's counsel for the immediate release of the vehicles and goods to the petitioner.