2015 (11) TMI 1223 - HC - VAT and Sales Tax

Seizure of trucks along with goods - several details on the transit Form 405 did not match with the details on the sales invoice of the goods that the truck was carrying - Held that - goods have been detained on the Ahmedabad-Baroda Express Highway and not at any check-post or barrier, as contemplated under sub-section (1) of section 68 of the Act. It is the case of the respondent that the Additional Commissioner of Enforcement has directed the Deputy Commissioner of Enforcement to position mobile check-posts. However, on a plain reading of sub-section (1) of section 68 of the Act, it is evident that the check-post or barrier as contemplated for the purposes of section 68 is a check-post directed to be set up or a barrier directed to be erected by the State by notification in that regard in the Official Gazette. The Additional Commissioner of Enforcement is not empowered under subsection (1) of section 68 of the Act to direct setting up of the check-posts or erect barriers. Under the circumstances, the mobile check posts set up by the second respondent pursuant to the directions issued by the Additional Commissioner, Enforcement cannot be any stretch of imagination be said to be a check-post or barrier as envisaged under section 68 of the Act. Clearly, therefore, the second respondent was not empowered to take any action under section 68(4) of the Act. Under the circumstances, the detention of the truck in question together with the goods by the second respondent in exercise of the powers under sub-section (4) of section 68 of the Act is clearly without any authority of law. A perusal of the impugned seizure memo shows that the truck had not been detained by reason of any of the eventualities contemplated under sub-section (4) of section 68, but for the purpose of verification of the tax liability. Under the circumstances, the entire action of the second respondent in detaining the truck in question together with the goods is on all counts, without any authority of law. Consequently, the impugned seizure memo being without any authority of law cannot be sustained. - Decided in favour of assessee.

Summary

Issues:
Challenge against seizure memo under sections 68 and 69 of the Gujarat Value Added Tax Act, 2003.

Analysis:
1. The petitioner challenged a seizure memo issued by the second respondent under sections 68 and 69 of the Gujarat Value Added Tax Act, 2003. The petitioner, engaged in transportation, carried goods from one location to another with proper documentation. However, the truck was detained by the second respondent while passing through a highway, not at a designated check-post or barrier as required by the Act.

2. The petitioner argued that the seizure memo lacked any deficiency in the documents carried by the truck driver. The detention was solely for verifying the tax liability of the goods' owner. The petitioner contended that the second respondent had no legal authority to detain the truck and goods at a location other than a check-post or barrier as specified in the Act.

3. In response, the Assistant Government Pleader defended the second respondent's actions, stating that they were empowered under the Act to verify the contents of the transit pass and goods in the vehicle. It was revealed that discrepancies were found between the details on the transit pass and the sales invoice of the goods. The respondent had suspicions regarding multiple transactions and tax benefits acquired through Transit Form 405.

4. The court analyzed the relevant statutory provisions, specifically section 68 and subsection (2) of section 69 of the Act. It was observed that the seizure occurred on a highway, not at a designated check-post or barrier, as required by section 68. The court noted that the Additional Commissioner's directions did not empower the second respondent to set up mobile check-posts. Therefore, the detention of the truck and goods was deemed unauthorized.

5. The court further explained that the provisions of subsection (2) of section 69 did not apply as the truck was stopped within the State of Gujarat, not at the place of exit. The seizure memo did not cite any violations under section 68(4) but was for verifying tax liability, which was deemed unauthorized. Consequently, the court allowed the petition, quashed the seizure memo, and directed the immediate release of the truck and goods. No costs were awarded, and direct service was permitted.