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2016 (2) TMI 843 - HC - VAT and Sales TaxDetention of goods - DVAT - there were some documents being carried by the transporter which according to the VATO were found to be inadequate. The other strange thing that was sought to be explained to the Court was that W/Bill should be read as without bill . While, the original of the said document was retained by the VATO, the copy thereof given to the Petitioner No. 2 was obviously unsigned. - Held that - the entire matter has to be examined afresh with an opportunity being given to the Petitioner No. 1 to produce all the documents in its possession and to urge all the points urged in the present petition, including questioning the authority of the VATO (Enf) to pass the order of detention and make an assessment. It is directed that, if Petitioner No.1 pays the entire amount of the VAT on the value of the detained goods then the said goods shall be released forthwith to Petitioner No.1 by the VATO (Enf). This is without prejudice to the rights and contentions of either party and subject to the final order that may be passed by the VATO (Enf).
Issues:
1. Detention of imported mobile phones by VATO (Enf) and subsequent assessment/penalty order. 2. Proper authorization of VATO (Enf) for interception of goods under DVAT Act. 3. Combination of assessment and penalty in a single order under DVAT Act. Issue 1: The case involved the detention of imported mobile phones by VATO (Enf) and the subsequent assessment/penalty order issued under the DVAT Act. The petitioner, a registered dealer under the DVAT Act, imported mobile phones and faced detention of goods during transportation. The VATO (Enf) issued an assessment/penalty order against the driver of the tempo carrying the goods, raising a tax demand and penalty. The court found the detention order to be illegal and set it aside due to various irregularities. However, the main issue remained the continued detention of the seized mobile phones. The court ordered a fresh examination of the matter, allowing the petitioner to present all relevant documents and challenge the authority of VATO (Enf) to detain the goods and make an assessment. Issue 2: Another key issue was the proper authorization of VATO (Enf) for intercepting the goods under the DVAT Act. The petitioner raised concerns regarding the authorization process, citing Section 68(2) of the DVAT Act, which requires a specific order from the Commissioner authorizing the Additional Commissioner (Enf) to delegate the power to intercept goods to the VATO (Enf). The court acknowledged these concerns, emphasizing the need for proper authorization and highlighting the importance of following the legal procedures outlined in the DVAT Act. Issue 3: The case also addressed the combination of assessment and penalty in a single order under the DVAT Act. The court noted that distinct proceedings are envisaged for the levy of penalty under the DVAT Act, questioning the validity of combining assessment and penalty in one order. The court found the assessment/penalty order issued by VATO (Enf-II) to be improper and set it aside due to legal irregularities. The court directed VATO (Enf) to pass a final order within two weeks and ordered the release of the detained goods upon payment of VAT by the petitioner, ensuring a fair and lawful resolution to the matter. In conclusion, the judgment addressed the issues of goods detention, proper authorization for interception, and the legality of combining assessment and penalty orders under the DVAT Act. The court emphasized the importance of following legal procedures, set aside the improper orders, and provided directions for a fair re-examination of the case, ensuring justice and adherence to the law.
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