2013 (10) TMI 916 - HC - VAT and Sales Tax

Seizure of goods - Security demand - Held that - it is desirable that the security as demanded from the assessee for release of the goods may be furnished - security to the extent of 20% of the value of the goods may be furnished incash or through bank draft - for the remaining 20% of the of the value of the goods, security may be furnished by the assessee, which may be other than cash or bank guarantee to the satisfaction of the assessing authority - Decided partly in favour of assessee.

Summary

Issues:
1. Quashing of orders passed by Joint Commissioner and Commercial Tax Tribunal under Section 48(7) of the Value Added Tax Act.
2. Seizure of goods due to non-production of transit pass and demand of security.
3. Contention regarding the legality of seizure and security demand.
4. Interpretation of the requirement of transit pass under the Value Added Tax Act.
5. Comparison with previous judgments and their applicability.
6. Reduction of security demanded for release of goods.

Analysis:
1. The applicant sought to quash the orders passed by the Joint Commissioner and Commercial Tax Tribunal under Section 48(7) of the Value Added Tax Act. The Tribunal upheld the seizure of goods due to the non-production of a transit pass and the subsequent demand of security for release.

2. The interception of goods without a transit pass led to their seizure under Section 52 read with Rule 58 of the Value Added Tax Act. The assessee's application for release was rejected, and security of 40% of the goods' value was demanded for their release.

3. The Tribunal justified the seizure and security demand, emphasizing the mandatory requirement of a transit pass under the Value Added Tax Act. The applicant's argument regarding the untimely production of the transit form after interception was deemed insufficient to invalidate the seizure and security demand.

4. The Court clarified that under the Value Added Tax Act, goods entering Uttar Pradesh for transportation outside the state must be accompanied by a transit pass at the point of entry or available for immediate download from the official website. The delayed generation of the transit pass after goods' entry did not meet the statutory requirement.

5. The applicant cited previous judgments to support their case, but the Court found them distinguishable as they did not address the crucial aspect of the transit pass being generated after the goods' interception within the state. This distinction rendered the previous judgments inapplicable to the present case.

6. The Court modified the security demand, requiring 20% of the goods' value to be furnished in cash or bank draft and the remaining 20% through a non-cash security to the satisfaction of the assessing authority. With this adjustment, the revision was disposed of, affirming the legality of the seizure and security demand in the case.