2017 (2) TMI 179 - HC - VAT and Sales Tax

Release of detained goods and truck - detention on the ground that the goods being carried were excess and undeclared and different goods - furnishing of bank guarantee - Held that - In view of the nature of allegations, interest of both the parties for the present will have to be balanced and therefore, ends of justice would meet if the respondents are directed to release the goods along with truck of the petitioner on his furnishing bank guarantee for 50% of the value of the goods along with two solvent sureties of local registered traders for remaining 50% acceptable to the authorised officer, as per provisions of Rule 77 of the RVAT Rules forthwith - matter on remand.

Summary

Issues: Non-release of truck and goods, Detention under RVAT Act, Impleadment application, Furnishing of security, Bank guarantee requirement, Tax evasion allegations, Show cause notice, Release of goods with conditions, Assessing authority's role

Non-release of truck and goods:
The petitioner, a registered firm under Delhi Value Added Tax, filed a writ petition aggrieved by the non-release of his truck and goods detained by Respondent No. 2, an Assistant Commercial Taxes Officer, under Section 76(5) of the RVAT Act, 2003. The detention was due to the officer's claim of excess and undeclared goods. The petitioner's requests for release were unanswered, leading to the writ petition.

Detention under RVAT Act:
The petitioner argued that the detention of the truck and goods beyond seven days violated his fundamental rights under the Constitution of India. Citing previous judgments, the petitioner sought release by furnishing security as per RVAT Rules. The respondent department insisted on a bank guarantee due to concerns about tax recovery from a non-Rajasthan-based petitioner.

Impleadment application:
The petitioner sought impleadment under Section 76(7) of the RVAT Act but received no contrary report from Respondent No. 2, leading to the writ petition for relief.

Furnishing of security and Bank guarantee requirement:
The respondent department required a bank guarantee for release, citing difficulties in tax recovery from a non-Rajasthan-based petitioner. The petitioner offered local sureties, emphasizing the goods were not intended for unloading in Rajasthan.

Tax evasion allegations and Show cause notice:
The respondent department alleged tax evasion due to higher tax slabs in Rajasthan compared to neighboring states, suspecting a deliberate avoidance of tax liability. The petitioner was issued a show cause notice and asked to appear before the assessing authority.

Release of goods with conditions:
Considering the arguments and judgments, the Court directed the release of goods and truck upon the petitioner furnishing a bank guarantee for 50% of the goods' value and two solvent sureties for the remaining 50%, as per Rule 77 of the RVAT Rules.

Assessing authority's role:
The petitioner was directed to appear before the assessing authority to file a reply, with the authority instructed to pass a final order within ten days from the reply's submission. The writ petition was disposed of accordingly, along with the stay application.