2016 (4) TMI 879 - HC - VAT and Sales Tax

Seeking release of vehicle - Detained on the allegation of evasion of VAT under section 68 of the VAT Act - Registration of the dealer whose name was found in the documents had been cancelled - Held that - as the petitioner showed willingness to deposit the entire possible tax amount with maximum possible penalty at the rate of 150% of the basic tax, by imposing condition of petitioner depositing the entire possible tax with maximum possible penalty, the truck and the goods may be released. Under section 68(5) of the Value Added Tax Act, the Deputy Commissioner has the power to release such goods pending assessment on such conditions of depositing tax and penalty or furnishing security as may be found fit. Therefore, subject to final assessment and adjustment of deposited amount towards the duty and penalty liability, the truck and the goods be released. - Petition disposed of

Summary

Issues: Detention of truck carrying scrap for alleged evasion of value added tax.

In this judgment by the Gujarat High Court, the petitioner, a transporter, had their truck detained at a mobile checkpost on suspicion of evading value added tax. The respondent authorities detained the truck due to serious discrepancies in the documents carried by the driver, including the cancellation of the dealer's registration mentioned in the documents. The authorities estimated the value of the goods at approximately &8377; 3,18,163/. The petitioner, through their counsel, expressed willingness to deposit the entire possible tax amount along with a maximum penalty of 150% of the basic tax for the release of the truck and goods.

The Court, considering the circumstances, imposed a condition on the petitioner to deposit the entire possible tax amount with the maximum penalty. The Court referred to section 68(5) of the Value Added Tax Act, granting the Deputy Commissioner the power to release detained goods pending assessment upon the condition of depositing tax and penalty or providing suitable security. The Court calculated a possible tax liability of approximately &8377; 16,000/ at 5% and a maximum penalty of approximately &8377; 24,000/ at 1 and 1/2 times the duty, totaling &8377; 39,000/. The petitioner was directed to deposit this sum before the authorities for the release of the truck and goods, subject to final assessment and adjustment of the deposited amount towards the duty and penalty liability.

Ultimately, the petition was disposed of in accordance with the conditions set by the Court for the release of the truck and goods detained at the checkpost.