2024 (9) TMI 762 - HC - VAT / Sales Tax

Legality of demanding security when all the relevant information relating to the said goods was already uploaded on the website of the department and the department had duly acknowledged the receipt of the uploaded information - whether Tribunal without deciding the fact relating to the intention of the dealer was legally justified to upload the demanded security when the said goods were being imported as raw material for the manufacture of Aata, Maida and Suji which are exempted under the VAT Act? HELD THAT - A perusal of the order nowhere shows that with respect to the goods in transit, there is any intension of evasion of tax, and the Assessing Officer has accepted the invoice and weighment slip and has finalized the assessment order. Since the Assessing Officer has accepted all the documents presented before him by the revisionist, the impugned order demanding security of Rs. 2,26,725/- (40% of the value of goods) is liable to be set-aside. The present revision is being allowed, and the order dated 31.05.2014 and the order dated 11.06.2014 are being set-aside. Application disposed off.

Summary

Issues:
1. Legality of demanding security by the Tribunal when relevant information was already uploaded.
2. Justification of demanding security without considering the dealer's intention for exempted goods under the VAT Act.

Analysis:
1. The revisionist, a flour mill owner, imported wheat accompanied by necessary documents. The consignment was seized due to an incomplete Form XVI, leading to a demand of security of Rs. 2,26,725 (40% of the value of goods). The revisionist contended that all information was correctly provided, and any discrepancies were due to the supplier's error. The Appellate Court reduced the demand to 10%, but the Tribunal upheld the initial demand.

2. The revisionist highlighted an assessment order from the same year where all documents were accepted, and goods were released without any security bond. The court noted that there was no evidence of tax evasion or intent to deceive regarding the goods in transit. The Assessing Officer's acceptance of all presented documents led to the setting aside of the security demand.

3. The court allowed the revision, setting aside the orders demanding security. The judgment emphasized the importance of assessing the intention behind security demands and the acceptance of valid documentation by the tax authorities. The decision aimed to rectify any undue financial burden on the revisionist due to the security demand.

4. The judgment concluded by disposing of any pending applications related to the case, ensuring a comprehensive resolution of the matter. The revisionist's compliance with all necessary procedures and the proper documentation played a crucial role in the court's decision to overturn the security demand orders.