2016 (5) TMI 76 - HC - VAT and Sales Tax

Refund of amount paid to get the goods released - truck not stopped at the checkpost - Held that - the powers under section 68 of the Act can be exercised at the time when the truck passes through the check-post. The same does not apply to a truck which has already crossed the check-post and has entered the State. Insofar as a truck which has already entered the State is concerned, it is the provisions of section 69 of the GVAT Act which are applicable. Under subsection (1A) of section 69 of the GVAT Act, it is the liability of the driver or the person in-charge of the vehicle to pay the penalty as may be determined after giving him a reasonable opportunity of being heard. The action taken by the authorities under the GVAT Act of seizing the goods and detaining the truck for breach of the provisions of section 69(1) of the GVAT Act is without any authority of law inasmuch as under the provisions of section 69, the concerned officer has no power of authority to detain such truck. Consequently, the recovery of the tax and penalty from the respondent dealer for release of the goods which had been seized in the purported exercise of powers under sub-section (4) of section 68 of the GVAT Act was without any authority of law. The Tribunal in the impugned order has held that it is the transporter s liability under section 69(1) to obtain a transit pass from the check-post authority at the time of entry of the vehicle in the State and not of the owner and hence, whatever may be the consequences of the lapses on the part of the transporter, the owner of the goods cannot be made answerable. Since the court is in agreement with the final conclusion arrived at by the Tribunal, it is not possible to state that the impugned order gives rise to any question of law, much less, a substantial question of law, warranting interference. - Decided against the revenue.

Summary

Issues Involved:
1. Liability under Section 68/69 of the GVAT Act.
2. Sufficiency of notice to the transporter as notice to the owner.
3. Tax and penalty imposition in the absence of tax incidence in Gujarat.

Issue-wise Detailed Analysis:

1. Liability under Section 68/69 of the GVAT Act:
The appellant-State challenged the Tribunal's decision, arguing that the liability under sections 68 and 69 of the GVAT Act should be placed on the owner, not just the transporter. The Tribunal had held that the liability to obtain a transit pass lies with the transporter and not the owner. The Tribunal's decision was based on the fact that the truck carrying the goods did not stop at the Songadh Check-post and was later intercepted by the Anti Corruption Bureau. The Commercial Tax Officer issued memos and seized the goods, which the respondent dealer had to release by paying tax and penalty. The Tribunal found that the liability could not be transferred to the dealer under section 69, which is meant for the transporter.

2. Sufficiency of notice to the transporter as notice to the owner:
The Tribunal held that notice to the transporter is not sufficient notice to the owner. The Commercial Tax Officer's order was challenged on the grounds that it was passed without proper demand notice and an order confirming the demand. The Tribunal observed that the authorities had improperly used section 68 to enforce compliance with section 69, which does not provide for the seizure of goods or detention of vehicles. The court noted that the seizure of goods and detention of vehicles is a drastic measure and should be backed by statutory power. The authorities' actions were deemed without legal backing, as section 69 does not empower them to seize goods or detain vehicles.

3. Tax and penalty imposition in the absence of tax incidence in Gujarat:
The Tribunal concluded that no tax and penalty could be levied as no tax incidence arose in Gujarat. The goods were in transit, and the respondent dealer was forced to pay the tax and penalty to release the seized goods. The court found that the authorities had improperly seized the goods and detained the vehicles to coerce the dealer into paying the tax and penalty. The court emphasized that the authorities' actions were not supported by the GVAT Act and were beyond their jurisdiction. The Tribunal's decision to refund the amount paid by the respondent was upheld.

Conclusion:
The court dismissed the appeals, agreeing with the Tribunal's conclusion that the liability under section 69 lies with the transporter, not the owner, and that the authorities' actions were without legal authority. The court did not find any substantial question of law warranting interference with the Tribunal's decision. The appeals were dismissed, and the Tribunal's order was upheld.