2016 (5) TMI 171 - HC - VAT and Sales Tax

Validity of seizure memorandum - Truck detained and goods seized - Petitioner contended that the truck and goods could not have been seized for breach of the provisions of section 69 of the GVAT Act - Held that - the sole ground for detention of the truck is that the driver or the person in-charge of the vehicle was not carrying a transit pass in Form 405. The provision for carrying a transit pass in Form 405 is relatable to section 69 of the GVAT Act which bears the heading Transit pass for transit of goods by road through the State . Though the alleged breach is of the provisions of section 69 of the GVAT Act the second respondent has resorted to the powers under subsection (4) of section 68 of the GVAT Act of seizing the goods and detaining the truck. It appears that since under Section 69 of the GVAT Act the authorities under the said Act not empowered to seize the goods and detain the truck the second respondent has resorted to the colourable exercise of powers under Section 68(4) of the GVAT Act by seizing the truck and goods contained therein for the alleged breach of the provisions of section 69 of the GVAT Act. The action of the second respondent of resorting to seizure of the goods and the truck is therefore beyond the bounds of his authority inasmuch as for breach of the provisions of section 69 of the GVAT Act the authorities under the said Act cannot resort to the provisions of Section 68(4) of the GVAT Act. The goods carried in the vehicle can be seized only if the requirements of Section 68(4) of the GVAT Act are not satisfied. However for breach of the provisions of section 69 of the GVAT Act action can only be taken under that section whereby the concerned officer is empowered to levy penalty not exceeding one and one half times the tax as may be determined against the driver or person in-charge of the vehicle. With a view to have the seizure of the goods vehicle can be detained but there is no power to seize the vehicle. The power given to detain the vehicle is to facilitate the seizure of the goods and it cannot be termed as the detention for an indefinite period. The reasonable interpretation would mean that once the goods are found in any vehicle and upon inquiry if it is found unsatisfactory the authority may seize the goods after detaining the vehicle and after the seizure of the goods the goods may be kept by the authority at any place where it is permissible but the vehicle is required to be released thereafter. So in the present case not only have the respondent officers in purported exercise of powers under Section 68(4) of the GVAT Act wrongly seized the truck along with the goods that it was carrying but despite the fact that Section 68(4) of the GVAT Act only permits the officer to detain the truck till date they have not released the truck in clear violation thereof. The action of the respondent authorities therefore is in breach of the provisions of sections 68 and 69 of the GVAT Act. The impugned seizure memorandum therefore cannot be sustained and the respondent is directed to release the truck along with the goods contained therein. - Decided in favour of petitioner

Summary

Issues:
Challenge to seizure memorandum dated 31.3.2016 by Commercial Tax Officer under Article 226 of the Constitution of India.

Analysis:
1. The petitioner challenged the seizure memorandum issued by the Commercial Tax Officer, alleging the detention of the truck and seizure of goods. The petitioner engaged in trading sopari and ordered goods from a registered dealer in another state. The truck carrying the goods was seized in Gujarat for not having a transit pass, leading to a dispute over the legality of the seizure.

2. The petitioner contended that the seizure was illegal as the truck was stopped at a location not designated as a check-post under the law. The respondents, however, asserted that the seizure was lawful, emphasizing the absence of the required transit pass as the basis for detention. The petitioner argued that the officers lacked the authority to seize the goods under the relevant law.

3. The court analyzed the provisions of the GVAT Act, particularly sections 68 and 69, related to transit passes and seizure powers. It found that while section 69 imposes penalties for not carrying a transit pass, it does not authorize the seizure of goods or detention of vehicles. The court noted that the actions taken by the respondents exceeded the powers granted by the law.

4. Notably, the court highlighted that the detention of the truck was a violation of the law, as the officers were only empowered to detain goods, not the vehicle itself. Citing a previous judgment, the court clarified that the power to detain a vehicle is to facilitate the seizure of goods and does not extend to indefinite detention of the vehicle.

5. Consequently, the court ruled in favor of the petitioner, quashing the seizure memorandum and directing the immediate release of the truck and goods. The court also awarded costs to the petitioner due to the unlawful detention and seizure of the goods without legal authority.

6. In conclusion, the judgment emphasized the importance of adhering to legal procedures and limitations on the powers of authorities under the GVAT Act. The decision underscored the need for lawful actions in cases of seizures and detentions, ensuring compliance with the statutory framework governing such matters.