2016 (12) TMI 1300 - HC - VAT and Sales Tax

Seizure of goods with an option to pay penalty - Section 48(7) of the U.P. VAT Act, 2008 - Form-21 - Held that - I find that the Tribunal has acted in a most arbitrary manner and has completely failed to discharge the statutory obligation under Rule 63(4) of the U.P. VAT Rules, 2008 - impugned order to be stayed.

Summary

Issues: Challenge to order under U.P. VAT Act, 2008 - Seizure of goods for tax evasion, Appeal to Tribunal, Grounds for seizure, Failure to comply with statutory obligations, Stay of Tribunal's order, Questions of law, Compliance with notice.

In this case, a revision was filed challenging the order under Section 48(7) of the U.P. VAT Act, 2008, related to the seizure of goods for alleged tax evasion. The revisionist contested the order passed by the Member, Commercial Tax Tribunal, Gorakhpur Bench, Gorakhpur, regarding the interception of trucks carrying 'Sariya' from Bihar. The goods were seized due to non-compliance with tax rules, specifically the absence of Form-21, a mandatory requirement for transportation. The Assistant Commissioner issued a show cause notice, leading to the seizure of goods and a subsequent application under Section 48(7) of the Act, which was rejected by the Joint Commissioner. The Tribunal, however, allowed the appeal, directing the release of goods without security, citing lack of opportunity for cross-examination as the main reason, despite overlooking other crucial findings. The High Court noted the Tribunal's failure to address the grounds raised in the seizure order and the Joint Commissioner's findings, emphasizing the arbitrary nature of the Tribunal's decision and its failure to fulfill statutory obligations under Rule 63(4) of the U.P. VAT Rules, 2008.

The High Court, finding the Tribunal's actions arbitrary, stayed the operation of the impugned order until the next hearing. The Court also admitted the case on the questions of law raised in the revision memorandum. An affidavit of service was filed, confirming the notice served on the respondent's authorized representative. The Court scheduled the matter for final disposal, instructing the revisionist to inform the respondent of the order and submit an affidavit of compliance before the next hearing date. The judgment highlighted the importance of complying with statutory requirements and ensuring fair procedures in tax matters, emphasizing the need for thorough consideration of all relevant grounds and findings in such cases.