2018 (12) TMI 846 - HC - VAT and Sales Tax

Penalty - initiation of recovery proceedings - Section 55 of the KVAT Act - Held that - There is no valid reason why this Court should entertain this writ petition disregarding the petitioner s alternative remedy, which also seems to be efficacious. Petition disposed off leaving it open for the petitioner to approach the appellate authority.

Summary

Issues Involved:
Detention of goods in transit by the respondent Department based on statutory violations; Entrusting detained goods to the petitioner for safe custody; Issuance of notices under Section 67(1) requiring production of detained goods; Fire in petitioner's godown leading to destruction of goods; Imposition of penalties on the petitioner through Ext.P5 proceedings; Invocation of revenue recovery proceedings by the Department; Validity of the writ petition in light of alternative remedy under Section 55 of the KVAT Act.

Detention of Goods in Transit:
The petitioner, a courier service, faced intermittent detention of goods in transit by the respondent Department due to statutory violations by consignors. Instead of taking possession, the Department entrusted the detained goods to the petitioner for safe custody. Subsequently, the Department initiated proceedings against the consignors under Section 47 and related provisions of the KVAT Act.

Destruction of Goods and Imposition of Penalties:
Following the issuance of notices under Section 67(1) to produce the detained goods, the petitioner's godown suffered a fire incident, resulting in the destruction of the goods. Citing force majeure, the petitioner expressed inability to comply with the notices. In response, the Department penalized the petitioner through Ext.P5 proceedings, leading to the invocation of revenue recovery proceedings for penalty realization.

Validity of Writ Petition and Alternative Remedy:
The petitioner filed a writ petition challenging the penalties imposed. The Government Pleader argued that the petitioner has an alternative efficacious remedy under Section 55 of the KVAT Act against the penalty orders. The judgment emphasized that the Court should not entertain the writ petition when an alternative remedy exists. The Court disposed of the petition, allowing the petitioner to approach the appellate authority within a specified timeline. The authorities were directed to defer coercive steps for a month to enable the petitioner to pursue statutory remedies.

Observations and Directions:
The judgment highlighted the importance of the petitioner pursuing the case diligently and mentioned that any delay in approaching the appellate authority would be condoned if done within two weeks. The Court aimed to ensure that the petitioner avails itself of the statutory remedies available while deferring coercive actions by the authorities for a limited period.

This comprehensive analysis covers the issues of goods detention, penalties imposition, alternative remedies, and the Court's directions, providing a detailed understanding of the judgment's key aspects.