2015 (12) TMI 426 - HC - VAT and Sales Tax

Seizure of truck together with goods - truck did not possess trip sheet or the log book, as required under section 68 of the Act - Held that - A perusal of the order impugned seizure memo dated 19.10.2015, issued under sections 68 and 69 of the Gujarat Value Added Tax, 2003 reveals that according to the second respondent the tax liability of the petitioner is required to be examined under the provisions of the Act as the petitioner has an office at Ahmedabad and engages employees for fitting the designs and providing material to fulfill the contract. From the facts as emerging from the record it appears that no condition of any penalty has been imposed upon the petitioner for release of the goods. It appears that the respondents only want to verify the actual facts of the case in view of the discrepancy of the truck number and also to examine the tax liability of the petitioner under the Act. In the opinion of this Court, the respondents are not in any manner prohibited from carrying out such verification in accordance with law, however, for that purpose, it is not necessary to detain the truck along with the goods in question. Under the circumstances, the petition deserves to be allowed with liberty to the respondents to examine the tax liability of the petitioner, if any, under the provisions of the Act. - Decided in favour of assessee.

Summary

Issues:
Challenge to order under sections 68 and 69 of the Gujarat Value Added Tax, 2003 regarding seizure of goods and truck.

Analysis:
The petitioner challenged an order seizing goods and a truck under sections 68 and 69 of the Gujarat Value Added Tax, 2003. The petitioner, a supplier of designer windows and doors, sold goods to an individual in Ahmedabad and dispatched them from Bhiwandi. The truck carrying the goods was detained at the Commercial Tax Check Post, Shamlaji by the second respondent. The petitioner sought release of the goods, contending that the transaction was an inter-state sale and that the detention was without legal authority. The petitioner was willing to comply with tax procedures to avoid evasion. The respondents argued that the truck was detained due to missing trip sheet and discrepancies in vehicle numbers. They sought permission to verify the truck transporting similar construction material. The Court noted that no penalty was imposed on the petitioner and that the respondents only wanted to verify facts and examine tax liability. The Court held that while the verification was permissible, detaining the truck was unnecessary. The petition was allowed, directing the immediate release of the truck and goods, with liberty for respondents to examine tax liability under the Act.

This judgment highlights the importance of following legal procedures in tax matters and the need for authorities to act within the bounds of the law when detaining goods. It emphasizes that verification of tax liability can be conducted without unnecessarily detaining goods, ensuring a fair balance between tax enforcement and individual rights.