2017 (6) TMI 460 - HC - VAT and Sales Tax

Release of seized goods upon deposit of cash security to the extent of 40% of the estimated value of the goods - case of assessee is that the Tribunal has affirmed the seizure of goods, misinterpreting the ratio of law laid down by this Court in The Commissioner, Commercial Tax U.P. Lucknow Vs. S/s Bihar Carrying Corporation 2017 (1) TMI 1060 - ALLAHABAD HIGH COURT - It is submitted that law has subsequently been clarified by this Court in The Great Punjab Transport Company Delhi Vs. Commissioner of Commercial Tax, U.P. Lucknow 2017 (6) TMI 432 - ALLAHABAD HIGH COURT but the same has not been taken into consideration. Held that - The judgment in Bihar Carrying Corporation had been examined at length in the subsequent judgment in The Great Punjab Transport Company Delhi and it has been clearly held that the existence of consignor and consignee could be examined in case there are other materials to suspect the claim of the revisionist about the goods being transported from out side the State to beyond the State, but where transaction is otherwise explained and declaration/ documents in term of section 52 are available, the issue of consignor and consignee ought not be given unnecessary primacy. Matter remitted to the Tribunal for a fresh consideration in light of the decision in the case of The Great Punjab Transport Company Delhi - revision allowed by way of remand.

Summary

Issues:
1. Interpretation of law regarding seizure of goods during transportation.

Analysis:
The revisionist challenged an order by the Tribunal affirming the seizure of goods and directing release upon deposit of cash security. The revisionist argued that the Tribunal misinterpreted the law laid down by the court in a previous case and failed to consider a subsequent clarification of the law in another judgment. The subsequent judgment emphasized that if the declaration made in the Transport Declaration Form (TDF) is correct and matches the bill/bilty, authorities should not proceed further to investigate the consignor and consignee beyond what is disclosed. The transporter is expected to verify the details specified in the TDF and documents required by the circular. The court noted that if details in the TDF are correct, authorities should not detain or seize goods solely based on alleged errors in consignor and consignee details. However, if declaration/documents are found fraudulent, then investigating consignor and consignee details may be necessary.

The Standing Counsel argued that in the present case, the details of consignor and consignee were relevant, and the authorities were justified in passing the seizure order. The court observed that the Tribunal heavily relied on a previous judgment which was further examined in a subsequent judgment. The subsequent judgment clarified that the existence of consignor and consignee could be examined only if there are other materials to suspect the claim of the revisionist. If the transaction is explained, and necessary declarations/documents are available, the emphasis on consignor and consignee details should not be excessive.

Consequently, the court advised the Tribunal to re-examine the facts and circumstances of the case in light of the clarified legal position. The matter was remitted to the Tribunal for fresh consideration based on the observations made. The revision was disposed of accordingly.