2016 (7) TMI 1466 - HC - VAT and Sales Tax

Detention of goods with vehicle - power to detain the vehicle - Section 59 of the Act - detention on the ground that the vehicle did not stop at the check post - Compounding fee under Section 61(1)(iii) of the A.P.Value Added Tax Act 2005 - Held that - Section 61(1)(iii)(aa) enables transporters who commit an offence under Section 59 of the Act to compound the offence on payment of a sum not exceeding 1, 00, 000/-. Compounding of an offence is on the volition of the person who has committed the offence and no person can be forced to compound any offence under Section 61 of the Act. Refusal to compound the offence would only enable the competent authority to launch prosecution against the person concerned under Section 59 of the Act. The writ petition is disposed of directing the respondents to release the vehicle and the goods forthwith.

Issues:
Detention of goods and vehicle for failure to stop at check post, legality and arbitrariness of detention, power of authorities to detain goods and vehicle, requirement of documents in the vehicle, compounding of offense under Section 61(1)(iii) of the A.P. Value Added Tax Act, 2005, prosecution under Section 59 of the Act.

Detention of Goods and Vehicle:
The judgment questions the detention of goods and the vehicle by the respondents based on the vehicle not stopping at the check post, deeming the action as potentially illegal and arbitrary. The petitioner was asked to pay a compounding fee under Section 61(1)(iii) of the A.P. Value Added Tax Act, 2005, for the offense punishable under Section 59 of the Act. The amended Section 59 of the Act specifies penalties for obstructing authorities or failing to stop the vehicle, including imprisonment and fines. However, it does not explicitly grant the authorities the power to detain the vehicle or goods if all required documents are present in the vehicle.

Power of Authorities to Detain Goods and Vehicle:
The judgment highlights that the authorities can only detain goods if all the necessary documents are not carried in the vehicle. Once it is confirmed that all required documents are present, the authorities' power is limited to launching a prosecution under Section 59 of the Act against the driver. Section 61(1)(iii)(aa) allows transporters to compound offenses under Section 59 by paying a specified amount voluntarily. Refusal to compound the offense may lead to prosecution under Section 59. The judgment emphasizes that detention for violations should be based on the powers conferred by the Act and the Rules.

Requirement of Documents in the Vehicle:
The case involves a situation where the driver failed to stop the vehicle at the check post to verify the documents, leading to the detention of the goods and vehicle. The authorities confirmed that all documents were indeed present in the vehicle but were not stamped at the check post. This failure to stop and verify documents at the check post resulted in the subsequent interception and detention of the vehicle after it had crossed the check post.

Compounding of Offense under Section 61(1)(iii) of the Act:
Section 61(1)(iii)(aa) allows for the compounding of offenses under Section 59 by transporters upon payment of a specified sum. The decision to compound an offense is voluntary, and individuals cannot be compelled to do so. Refusal to compound an offense may lead to prosecution under Section 59 of the Act. The judgment clarifies the voluntary nature of compounding offenses and the consequences of refusal.

Prosecution under Section 59 of the Act:
The judgment concludes by directing the respondents to release the vehicle and goods immediately, leaving open the option to initiate proceedings under Section 59 of the Act. The writ petition is disposed of without costs, emphasizing the need for authorities to act within the powers conferred by the Act and ensuring that detention is based on valid legal grounds.

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