2017 (4) TMI 1115 - HC - VAT and Sales Tax

Release of detained goods - release upon deposit of 15% of its value in the form of cash security/bank guarantee - Held that - the order of Tribunal, dated 27.3.2017, is modified by providing that the transporter shall cooperate in any subsequent proceedings undertaken, as contemplated in law, and the transporter shall also submit an indemnity bond in respect of the balance 25% of the value of goods, as determined by the Tribunal - revision allowed.

Summary

Issues:
- Challenge to Tribunal's order directing release of goods upon deposit of 15% of its value in the form of cash security/bank guarantee.
- Dispute over the valuation of goods transported by the transporter.
- Allegations of incorrect declaration made by the transporter in the transport document.
- Validity of the order of seizure and conditional release of goods.
- Potential initiation of penalty proceedings against the transporter.

Analysis:
The Tribunal's decision allowing the release of goods upon deposit of 15% of the value in the form of cash security/bank guarantee was challenged by the transporter. The transporter contended that the valuation of the goods was wrongly assessed by the Tribunal, citing discrepancies in the description of the product in the transport document. The transporter argued that although there was an error in the transport document, all other accompanying documents correctly identified the product as plastic granules. The Tribunal had reduced the deposit amount from 40% to 15% after the valuation of the goods was revised from ?22,00,000 to ?8,80,000. The court noted that the transporter's own valuation indicated ?40 per Kg, while the Tribunal had considered ?50 per Kg. The court found the Tribunal's valuation to have a basis, especially since the goods were to be unloaded in the State of U.P., which explained the discrepancy in the description provided in the transport document.

The court concluded that the transporter's interests were adequately protected by the Tribunal's order, and there was no legal error or perversity in the valuation of goods or the conditional deposit of security for release. The court dismissed the revision and stated that penalty proceedings could be initiated as per the law. The transporter agreed to cooperate in any penalty proceedings and offered to furnish an indemnity bond to safeguard the revenue's interest. Consequently, the court modified the Tribunal's order, requiring the transporter to cooperate in any subsequent proceedings as per the law and submit an indemnity bond for the remaining 25% of the value of goods determined by the Tribunal. The revision was disposed of with these directions.